The buyer’s agent is a hard-working agent, especially in an inventory-constrained market. They represent the person bringing the money to the transaction and yet, they are often unappreciated, undervalued, and under-compensated for their efforts. Some would suggest that the buyer’s agent may not survive the next 10 years in our industry, but I am bullish on them remaining a vital contributor to real estate transaction services.
Preparing the Buyer
A buyer’s agent needs to handle the hard work of preparing the buyer for a transaction. Frequently this entails educating the buyer about pre-approvals. Sometimes it’s about selling the home in which they currently reside. Sometimes it’s about arranging temporary housing. Buyer’s agents need to do the heavy lifting of removing all potential convergencies possible in order to make the most aggressive offer. I heard a story this weekend of a property that was listed and went pending in two days with a contingent offer. The buyer offered a 5% premium over list price with a $10,000 non-refundable deposit for a 30-day contingency. This is a lot of work.
One big mistake that buyer’s agents commonly make is the failure to have their client sign a buyer’s representation agreement. Ask for the order before you invest your time!
Buyer’s agents need to be quick responders. In an inventory constrained market, the buyer’s agent needs to pay close attention to listing alerts. Timely attention to new listings and price changes that meet a client’s criteria are vital to being responsive. Nothing is faster than the MLS for this.
In the best case we have seen (Cloud Streams), an alert takes 15 minutes to move from an MLS into a vendor’s database and trigger a listing alert. But the agent gets the alert in the MLS system immediately. Buyer’s agents should definitely be using Cloud Streams if it is available in their market. Every minute matters! Consumers delete listing alerts that come in after the first one. There is no second place when it comes to listing alerts.
Figure 1 Image Credit: Greg Robertson Cloud CMA
One service that MLSs have adopted is showing solutions. ShowingTime and others lift a lot of heavy communication burden off of the buyer’s agent by managing a call center, as well as contacting the listing agent and sometimes the home seller to schedule a showing. In the absence of these MLS services, agents may spend hours each day arranging for a showing. Granted, the lockbox has been a great advancement in real estate, but it does not resolve the scheduling issue fully.
Unlike the listing agent, buyer’s agents are the ones driving customers around from house to house. Personally, I believe that the listing agent should be at every showing, mostly to answer any question that the home buyer’s agent may have about the property.
Figure 2 Image Credit – TourZazz
Door Knocking and Telemarketing
In a constrained market, buyer’s agents had better be prepared to do some door knocking. Sometimes you need to find inventory that does not exist by examining homes that meet a buyer’s criteria but are not listed for sale. Buyer’s agents also call past clients who live in areas where the buyer is looking.
Sidebar – this is the number one reason why there are so many sales that show listed in the MLS for 1 day. An agent makes offers on homes for buyers and winds up representing both parties in the trade.
Pocket listings stand out as one of the hot topics in our industry today. These listings have been a part of the real estate industry forever. To show well, properties often need to manage neglected maintenance via repairs, ensuring the home is free of problems that home inspectors and appraisers could flag. Compass has a program for sellers that pays for all of this and even manages the repair process without any out of pocket cash from the seller. Coming Soon listings regularly populate the pipeline for 30-60 days while contractors, staging, and photography are arranged. Of course, the seller’s agent tells fellow agents about these properties. It’s not a secret. Usually, sharp buyer’s agents relay as much as they can about the property to their buyer so that they can view the property and make an immediate offer when the home is ready.
Coming Soon and pocket listings are generally viewed by MLS and others as a stain of unethical behavior in our industry. I believe that there are some Coming Soon listings and pocket listings that do deserve this condemnation, however I also recognize that more often than not, a hard working buyer’s agent found a person that was not planning to sell; or a listing agent did great pre-MLS marketing of a listing that was being prepared to pass inspections and pull the best possible appraisal. In many cases, Coming Soon and pocket listings are outcomes of the highest service an agent can provide to a client, not some form of shady private transaction.
Many large firms have adopted Buyside. The product is like an MLS, but lists buyer criteria rather than property criteria. This has been an enormous utility to find homes for buyers. Successful companies using Buyside are including buyer profiles in their customer email notifications and newsletters. Today, brokers have far more buyers than they have listings. This emerging trend to advertise buyers has not only served the buyers well, but has driven improvements in listing presentation effectiveness and shortened days on market.
The practice of advertising buyers is an often neglected opportunity for agents and brokers alike. If you were thinking of listing your home for sale, wouldn’t you want to talk to the company that advertises buyers? I would love to see a broker who uses Buyside and Adwerx to combine those two services to do geo-targeted program advertising. If you are doing this today in your business and would be willing to participate in a case study or webinar, please contact firstname.lastname@example.org.
Great buyer’s agents do buyer CMAs to help educate their clients about a home before placing their offer. Most of all, the buyer’s agent needs to have instincts about what is acceptable and what is not. The offer may be super low on a home that the buyers feel is ok, not perfect. The offer may be high if the home is perfect or if they have contingencies attached to the offer.
Until the transfer of title, the buyer’s agent remains connected to their transaction. Today’s real estate transactions have massive checklists and each item needs to be perfectly executed. In this stage, the buyer’s agent and seller’s agent are working together hand in hand. The strength of our industry stems from the true essence of cooperation among competitors: the transaction.
I celebrate the buyer’s agent! May you have a long and prosperous life.