As data becomes more available to consumers online, and new real estate brokerage models present themselves, the question is arising in the industry: will buyer’s agents will become obsolete? After all, the thinking goes, travel agents are mostly gone and journalists are being replaced by bloggers. It’s possible that this will be the case for buyer’s agents in the future, as there is a trend in thinking that there are no real experts if everyone has access to information.
Recently I heard about a book that takes on this concept regarding expertise and it really resonated with me. The title is “The Death of Expertise: The Campaign against Established Knowledge and Why it Matters“. Confession: I have not yet read it, but want to do so. I did hear it discussed on KGO Radio by Pat Thurston, one of the radio personalities there, and her take on it was that it presents the concept that everyone’s opinion is as good as everyone else’s opinion.
That certainly does happen in real estate, along with the persistent idea among some consumers that buyer’s agents don’t really add any value other than unlocking doors. (I wrote about this idea that “it’s all on the web” so buyer’s agents aren’t perceived to be needed back in 2013.) Even this morning I had someone email to ask me if I would split my commission if they bought a home with me and would “do all the research”. The answer, by the way, is no.
You can have a 20 or 30 year veteran Realtor with oodles of transactions, but a home buyer armed with a real estate app may not always know what he or she doesn’t know. And that’s dangerous. Information does not equal knowledge or skill.
A good buyer’s agent will be able to help with these items (and many more, depending):
- explain the contract and forms (some of which are written with obscure vocabulary and very important nuances)
- give information on what is customary in an area (whether transfer taxes or contractual norms or seller concessions)
- identify red flags in disclosure paperwork (and point out what is hinted at but not said explicitly, where there are gaps or incomplete answers or required but missing information)
- provide guidance on what to look for in a good home or setting (not always intuitively obvious)
- investigate what it will take for your offer to be accepted, when you do decide to write on a property
- understand the significance of the natural hazard disclosures and associated risks, and to raise issues that these don’t contain but will be a concern to consumers if they know about them
- determine if more inspections are warranted or not
- set the buyer up for success with a strategy that includes a strong pre-approval, massaging the relationship with the listing agent, obtaining answers to follow up questions
- educate the buyer on construction issues or strengths
- find the appropriate experts for whatever is needed
- analyze the real estate market for the particular home you want to buy (not just the city or not, not the zip code, but your particular home’s market, whether it’s mostly influenced by a school district, a price point, or any other criteria – this is custom info not found online)
- know that homes of certain vintages may come with particular risks, for example, houses or townhomes of a particular period may have electrical panels that should be replaced for fire safety
- spend significant time crunching the numbers to arrive at the probable buyer’s value or where it is likely to sell
- will go to bat for you should there be a conflict over negotiations, repairs, or any other issue
- address any post-sale problems, questions, or issues
- and so much more – each transaction is different, so the agent will address and improvise as needed on each one
Home buyers may, without good guidance, sign purchase agreements or contracts and not understand the impact of various clauses or paragraphs and assume that because they are boilerplate, they are “fine”. A good buyer’s agent will carefully review everything and explain the ramifications and the “what ifs” that go with them.
A home buyer may read the disclosures and decide that something is normal or OK because it’s common in an area. Just because all of the neighbors have water in the crawl space does not make it a desirable condition. A good buyer’s agent will go over the risks and costs that can come from water intrusion into the crawl space. (In that case, water in the crawl space can lead to cracked foundations, diminished safety in an earthquake, an increase of mold, the attraction of pests, etc. – all of which can be expensive to fix and none of which may be apparent to some buyers.)
Talk with agents who’ve been in the industry for 5 years (85% will drop out before then) and ask what they’ve learned and you’ll get an earful. Ask a Realtor who’s been selling homes for 15 years or more and she or he could write a book on what’s been learned. Ask one who’s sold homes for 40 years and you’ll likely hear “I learn something new with every transaction”.
A good buyer’s agent can make the purchase, escrow, and closing look effortless. Without visible high drama, home buyers may not understand which skills and experience helped to navigate the “easy sale”. Perhaps above all, a buyer’s agent will have his or her client’s best interest at heart. For that Realtor, it’s not a matter of selling you his or her listing, it’s about finding the right home for you and providing you the professional representation you deserve so that you can make an informed decision every step of the way.
If you went to court, you’d want to be represented by your own attorney, someone whose work is geared toward helping you. So too with a buyer’s agent. That person does far more than open doors and get paperwork signed. Perhaps those of us who work with buyers don’t do enough to promote ourselves or make it apparent in the public eye how hard we work to get our clients good information so that they can make the best decisions for themselves. Yes, buyers will also do research and get home alerts as to when listings hit the market. More information and data is better, especially with large purchases as in real estate transactions. That does not undermine what a buyer’s agent does, though, it only makes for a stronger partnership.
Will buyer’s agents become obsolete? I hope not. The clients of mine from other countries where there are only listing agents were wildly enthusiastic about having a Realtor in their corner, helping them to understand their choices and options with the negotiations, inspections, and myriad of other decisions to be made. To them, having a buyer’s agent was a huge upgrade in their home buying experience.