The 2015 National Association of Realtors Profile of Home Buyers and Sellers has just been released, and we’ve learned that home sellers averaged $40k in equity this year, that the average buyer is a 44 year old married white couple, and the challenges home buyers face.
Now, we’re diving into what home buyers want from their agent, how they hired them, how often they signed agent disclosure agreements, and how agents got paid. Read on for more.
What do home buyers want from agents?
Most buyers (87 percent) used an agent or broker this year, while 8.0 percent bought directly from a builder.
When choosing an agent, 53 percent say that having an agent to help them find the right home was most important, while 23 percent said an agent’s help in negotiating terms of the sale and negotiating the price was most important to them.
The disparity between these two numbers is disconcerting, as the value proposition of a real estate professional could be better expressed by the industry so that consumers know the role is so much more than house hunting.
How did buyers find their agent?
Two in five buyers used an agent referred to them by a friend, neighbor, or relative. Some translate this to mean that marketing is irrelevant, but it remains highly possible that the referral didn’t necessarily come from a past client, rather from someone familiar with an agent, so keep marketing to and networking within your farm area.
It remains true that most (nearly seven in 10) buyers interviewed only one agent during their home search. One. In other words – ask to be interviewed!
Most buyers said that they were looking for an agent who has a good reputation and is honest and trustworthy. This stat will become increasingly important as agent ratings and reviews evolve.
Almost all buyers (88 percent) said they would use their agent again or recommend their agent to others, so if you’re a real estate professional, a wise investment is keeping in touch with past clients over the years.
Getting that disclosure agreement signed
According to the report, 61 percent of recent buyers signed an agent disclosure agreement either at the first meeting, when the contract was written, or at some other time.
How curious… that leaves another 39 percent who never signed an agent disclosure form.
Requirements for disclosure forms vary by location, but it is interesting to note that the most common arrangement was a written agreement at 40 percent, followed by an oral arrangement at 18 percent. Only 29 percent of buyers had no representation arrangement with their agent.
How agents got paid
NAR reports that the most common compensation structure for real estate agents was payment through the seller, which was the case for over half of recent home buyers. This has been true for years.
“Generally real estate agents are compensated through the seller at 56 percent,” notes the report, which adds, “only 21 percent of agents are compensated by the buyer. When the agent was compensated by the buyer, they were most commonly paid a percentage of the sales prices, as opposed to a flat fee.”