Want an EFFECTIVE Buyer Agent (or Listing Agent)? Better Shop Around
The same words could apply to homebuyers and sellers according to a new report by the Consumer Federation of America on the Agency Mess in real estate. It’s creating a ripple effect around the country, in part because real estate consumers too often work with the first agent they meet or a friend who may be new to the industry. You can skip all of the broker babble and get quickly to the bottom line by following the money.
Ask anyone — friend or stranger who offers to serve as your buyer agent whether their office offers a zero tolerance conflict of interest policy and what their track record is as a buyer agent. Don’t let anyone trick you into working with a fake buyer agent (aka. Designated Buyer Agents), ask for MLS stats to prove they’ve been an EBA — EFFECTIVE Buyer Agent when it comes to the bottom line.
Our measure of that effectiveness is simple: did your help homebuyer client save money? Here’s a summary of our performance since 1995:
Summary:
1. Sales volume: Approx. $ 50M in sales over 48 MLS sales since 1995 — 23 years ago (excluding non-MLS transactions, eg. Proactive House Hunting).
2. Approx. $ 1.2M in gross commissions over 23 years, most of which has been rebated to buyer clients who pay hourly fees for services as they are rendered. Rebates effectively allow DIY homebuyers to get a return on the time they invest during their house hunt.
3. Bill Wendel, broker at Real Estate Cafe, has saved homebuyer clients $ 6M or 5 times his gross commissions. Rebates are in addition to the $ 6M saved by advocating for homebuyer clients.
2/3 Declare your independence from bloated commissions & MegaBrokers; select rebate from Menu of Savings (seen @WSJ) https://t.co/j8XyZyns94 pic.twitter.com/T5UVH3jXph
— Bill Wendel (@RealEstateCafe) June 30, 2017
Savings:
1. Negotiated $ 2.6M off the last listing price or a median of $ 15,200 in savings (before buyer agency fee rebate). The average amount negotiated off was considerably higher, $ 55K per transaction.
2. When price reductions and negotiated concessions are combined, the savings total nearly $ 6M. That translates to a median total savings of $ 40,700. Once again, the statistical average is three times higher — $ 124,109.
3. 1 in 4 homebuyers represented by Real Estate Cafe saved over $ 100K, when price reductions & negotiated savings are combined.
4. Only 1 in 7 paid over asking price, with a COMBINED total of $ 81,000 or just a median of $ 7,000 over asking price. In contrast, 1 in 4 homes sold for $ 100K over asking price in Cambridge, MA in June 2016.
5. Over nearly 50 transactions, homebuyers have paid an average of 92.4% of the original asking prices. Median sales prices are even lower — 91.5% or a savings of 8.5%.
6. Nearly 1 in 3 homebuyers represented by Real Estate Cafe have saved 10% or more off the original asking price.
7. 1 in 4 has paid LESS than the assessed value of the property (as determined by the local tax assessment office not Zillow or any other automated valuation model).