Real Estate News — The Death of the Buyer’s Agent
The statistics in this L.A. Loft Blog post will surprise and shock home buyers and real estate agents alike. Realtors who specialize in helping buyers are facing a diminished financial future as buyers are feeling more empowered by the internet to find homes on their own. #buyersagent #homeprices
While using a buyer’s agent is not a legal requirement for purchase of a home in California, nearly 100% of transactions involve getting help from a buyer’s agent, listing agent or attorney. For a good chance of a successful purchase, the offer needs to be written up properly, with sufficient supporting documents so that it can be seriously considered by the seller. Most buyers choose to find and use their own agent who specializes in helping buyers and who can be dedicated to helping the buyer to find the right home, then to negotiate the best price and terms that are in the buyer’s best interest. Because technology is improving, a growing number of buyers are finding their own on real estate websites, and then contacting the listing agent without getting help from a buyer’s agent.
The Los Angeles Times reported on why some buyers are ditching the real estate agent and turning to start-ups and other websites for help instead. In the past, real estate agents had exclusive access to much real estate information that home buyers could not get themselves. But today, property listings, photos, recently sold prices, school ratings and neighborhood information such as crime rates are available free on the internet. For some assertive buyers, that’s an invitation to bypass an agent and, in the process, try to negotiate some of the 2.5% to 3% that is commonly paid to the buyers agent. Why not ask for some of that to be applied to lowering the purchase price if no buyer’s agent is being utilized? There are some new websites that specialize in helping buyers with an online platform. Some, such as Open Listings represent the buyer and then rebate half of the selling agent’s commission to the buyer.
Even with the latest technology to help buyers (92% of buyers use the Internet during their home search according to National Assn. of Realtors), most decide to use a buyer’s agent so that they won’t risk missing out on the perfect home, and they want the most powerful negotiator that comes from a full-service, fully-compensated agent who will creatively overcome the many tricky hurdles that are typical with most California real estate transactions. Most buyer choose to hire good representation because they know that there is not enough inventory in today’s market, often too many buyers who they must compete with who are using the best strategies and tactics to get the best home for the least amount of money. Then, if lucky enough to beat out the other buyers to the best deals, the buyer must then face an adversarial seller who is represented by a clever listing agent employing every strategy in their arsenal to extract as much money from the buyer as possible on the seller’s terms. Most buyers know intuitively that a cut-rate service could be risky, especially in a sophisticated area like Los Angeles, and buyers want the best help possible representation when the difficult rivals, problems and questions present themselves in a real estate transaction.
These questions include: How do I find the listing agent? How do I get just the right properties that match my criteria in my email every day as soon as they come on the market? How do I find the real bargains that are not on the internet? How do I see new homes under construction? How can I put in an offer with an escalation clause? Where can I find the special deals like distressed properties, raw lofts, REO, foreclosures, auctions, bank owned, for sale by owner, expired listings, company owned, estate sales, probate sales, homes falling out of escrow, homes falling out of contract, expired listings, listings on hold, vacant homes, divorce sales, auctions, pre-auctions, pre-foreclosure, off market properties, private listings, unlisted homes for sale, pocket listings, need-to-sell-now homes, unclaimed homes, upcoming new loft conversions and homes for sale by sellers who do not want to pay an agent? Many of these deals are missed by buyers with or without an agent.
Shocking Facts About Buyer’s Agents – Homes Sell Faster Without ‘Em
The reality of today’s real estate market is that the buyer’s agent is slowly diminishing in necessity. Possibly because they are actually slowing down home sales. As a matter of fact, the big real estate news today is that homes now sell faster when the buyer’s agent is offered less commission. Yes, you read that correctly. Homes now sell faster when the seller and listing agent share less money with the buyer’s broker. We could not believe it when some leading real estate coaches and brokers recently told us, so we ran the recent numbers for the local Los Angeles market. Higher CSO shared commission to buyer’s agent of 2.6% or more resulted in an average of 70 days on the market, while a lower CSO of 2.4% or less delivered a sale in just 57 days on average during the same 6-month period based on TheMLS data. Of course, the average home sold for significantly less money with a lower average sold price when the shared commission was lower.
While most prospective home buyers search the internet themselves first, most of them still ultimately prefer to use a buyer’s agent because that way they can feel confident that a trusted professional is on their side exclusively, they can get all of the pros and cons, and the seller pays for it.
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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.