Americans rate Realtors as one of the least respected professional in the country. Realtors fell not only to the bottom of the list, but even below non-licensed, non-governed professions. Why?
Prior to the mid-1990s, there was no such thing as buyer representation. Old school Realtors were strictly salespeople and worked only for the Seller; they were handsomely rewarded for ruthless sales tactics. After one too many lawsuits, real estate agents became governed by the same body of law that governs attorneys. The Law of Agency states that a Realtor is required by law to put your interests above their own. Buyer Agency was born and there was finally a level playing field for buyers and sellers.
But, let’s be honest. There is another reason people don’t like real estate agents. As an industry, we do obnoxious things to try to gain a competitive edge over the agent in the next office, like putting our photos on business cards, signs, and grocery carts. We brag about “millions sold” and add a bunch of letters to our title that don’t mean anything to anyone except us. Becoming an Exclusive Buyer Agent was one way to distance myself from other Realtors in an industry that I found to be unappetizing. Having said all that, here are some truths about the real estate industry and Realtors in general:
Far less than half of all Realtors are “career agents.”
A career agent earns a full-time living helping people buy or sell homes. They have an established business and systems in place that allow them to work a standard 40-hour week, not the 80-hour week that you hear agents talking about. They aren’t one of 50 agents chasing a listing; their business comes to them. If a potential Seller has unrealistic expectations, they turn down the listing. If a Buyer won’t provide a pre-qualification letter, they won’t work with them. They are pros and they take their business seriously.
Then there are the other agents. Some are hoping to be career agents and are off to a good start; less than half of those will make it past the first year. Some are sick of their 9-5 jobs and thought they’d try to break into real estate part-time with the hope that they’ll be able to quit their job in the future. Others were laid off recently and thought they’d give real estate a shot while they are on unemployment. The rest might be empty nesters, investors who want to save the commission, or people who got their license 30 years ago when it was easier and didn’t want to give it up ‘just in case.”
A good Realtor is worth their weight in gold and will save you lots of time and lots of money. If you just want to be entertained and driven around to look at houses, there are plenty of agents who will agree to do it. For them, real estate is typically their hobby, not their career.
Realtors are not overpaid.
It’s all about risk/reward. The higher the risk, the higher the potential reward, and Realtors assume LOTS of risk. Seller’s agents have to pay to photograph, video tape, and advertise a client’s home for months, sometimes, to sell the house. If the Seller changes their mind, the Realtor doesn’t recoup those expenses. Buyer’s agents typically show 15-30 homes to a buyer before they make a decision. We use our gas and risk our own personal safety by putting strangers in our car and taking them to empty houses. In the end, we’re not guaranteed a paycheck. Our reward is a lifestyle that is in our control. Sometimes we work for dirt, and sometimes we work for diamonds.
Realtors do have high ethical standards.
OK, maybe a few don’t. But even those that don’t are so highly regulated and monitored by the Texas Real Estate Commission and their brokers that it’s hard to get away with taking advantage of a client. Most ethics violations I see involve agents sharing information about their clients that they shouldn’t, and a lot of the time it happens innocently. For example, two agents are in a weekly sales meeting chatting about what and who they are working with, and one lets it slip that his client MUST find a buyer by the end of the month. A few days later, the other agent has a Buyer for the house and has the advantage of knowing that the Seller is motivated. The Seller’s agent has inadvertently cost his client money, and the Buyer now has a competitive edge. As a Buyer, you don’t want your agent to tell all the Seller’s agents how much you can afford to pay or that you must move in two weeks. These innocent slips of the tongue cost you money.
We don’t learn about buying real estate in school.
Most agents, I believe, would say that it took about 10 transactions before they really felt comfortable with what they were doing. New agents have their brokers guide them through it all until they are ready to handle it alone. Still, there are thousands of variables and each transaction is different. Buyers are naïve (read “out of their minds”) if they think they can manage it all because they read Homebuying for Dummies.
Seller’s agents love yard signs.
One of the benefits of working with Sellers is that the Agent can keep their sign in the seller’s yard until closing (or until the seller makes them take it down). Since most closings take 30 days, that’s 30 days of buyer leads generated for the listing agent, who will tell you when you call that the house is sold, but they can show you others. If you’re serious about buying a home, it’s time to hire an Exclusive Buyer’s Agent. Buyers waste hours and hours calling off yard signs and scouring the internet for a home, only to find out that the house is under contract or won’t meet their needs. What’s worse, if they call off a yard sign and the listing agent shows them the house, the buyer has no representation.
Seller’s agents don’t like to show you their listings and learn later that you want buyer representation.
A large internet-based brokerage encourages buyers to have the Seller’s agent show you their listings and then contact an EBA if you want to make an offer. We strongly disagree. In fact, we won’t accept you as a client if you do. We’re not about stealing buyers from listing agents; if they show you the property, they deserve to be compensated in the end. If you haven’t yet hired an EBA and you really want to see a house, call the listing agent and be honest with them. Chances are they will show you the house anyway because it’s in their seller’s best interest. BUT, remember that they don’t work for you and that they are required to pass along to the seller any information you share with them, should you decide to buy the house. Keep your mouth shut. Better still, if you are serious about buying a home, hire an Exclusive Buyer Agent before you start looking at homes.