Published 03/27/11
However, what buyers say they want from an agent isn't the same as the benefits they said they received after the sale was completed. This suggests that buyers are often unclear about the extent to which an agent can help, as well as the magnitude to which that contribution can affect their ability to make a good buy and smoothly complete a real estate transaction.
In the 2010 Profile of Home Buyers and Sellers, the National Association of Realtors thoroughly researches a wide variety of information regarding the home-buying process and how both buyers and sellers view the involvement of real estate agents. It provides some interesting insight as to how perceptions or expectations offer differ from reality.
First, let's take a look at what buyers want most from a real estate agent.
WHAT BUYERS WANT MOST FROM REAL ESTATE AGENTS
All buyers First-time buyers Repeat buyers
- Help finding the right home to purchase 51 percent 50 percent 51 percent
- Help negotiating terms of sale 14 percent 14 percent 14 percent
- Help with price negotiations 12 percent 12 percent 12 percent
- Help with paperwork 10 percent 10 percent 10 percent
- Determine what comparable homes sell for 6 percent 5 percent 7 percent
- Determine how much home buyer can afford 3 percent 4 percent 1 percent
- Help find and arrange financing 2 percent 3 percent 2 percent
- Other 3 percent 2 percent 3 percent
As the first chart shows, buyers overwhelmingly believe that the primary purpose of an agent is to help them find the right home to purchase. More than 50 percent say this is what they want from an agent. All other functions fall off significantly, with only 14 percent saying they want help negotiating the terms of the sale, and 12 percent saying they want help with price negotiations.
Interestingly, the responses also do not vary whether you're talking to first-time buyers or repeat buyers.
Those results are fairly consistent with popular misconceptions about what real estate agents do. For some buyers, they see agents as nothing more than a taxi service and a key to the door. Beyond that, many buyers appear to have what may be a false sense of security in their personal ability to negotiate a real estate deal and complete the process without much assistance. However, when buyers are asked to list the actual benefits provided by an agent, it becomes more apparent that agents are delivering a much broader array of services. The second chart shows what those figures look like.
BENEFITS PROVIDED BY A REAL ESTATE AGENT
All buyers First-time buyers Repeat buyers
- Help buyer understand the process 66 percent 80 percent 53 percent
- Identify unnoticed propery features/faults 53 percent 55 percent 50 percent
- Negotiate better sales contract terms 42 percent 43 percent 40 percent
- Improve buyer’s knowledge of search areas 42 percent 41 percent 43 percent
- Provide a better list of service providers 41 percent 41 percent 42 percent
- Negotiate a better price 34 percent 34 percent 34 percent
- Shorten buyer’s home search 31 percent 32 percent 31 percent
- Expand buyer’s search area 22 percent 25 percent 20 percent
- Provide better list of mortgage lenders 21 percent 22 percent 20 percent
- Narrow buyer’s search area 18 percent 17 percent 19 percent
- Other 2 percent 1 percent 2 percent
One number that jumps out here is how 80 percent of first-time buyers say the number one benefit provided by a real estate agent is "helping them understand the process."
On the surface, that might seem predictable, but when asked what they want out of a real estate agent, only 10 to 14 percent of first-time buyers said help with the process (paperwork, negotiations, etc.) was important. Although somewhat less significant, the discrepancy also existed for repeat buyers.
This would suggest that the whole house-buying deal isn't quite as easy as some first suspect. As with most things, we often don't know what we don't know. Making an offer on a house might initially look like nothing more than agreement on a price, the selection of a move-in date and some quibbling over a few inspections or repairs. Ah, if it were only that simple. In today's intensely litigious world, home sale contracts are routinely 50 pages or more, and there are countless places where you can get yourself in trouble if you don't know what you're doing. The benefits buyers attribute to agents in the area of negotiations also increases dramatically when going from a list of "what I want" to a list of "what benefits I got."
Many buyers fancy themselves to be master negotiators. But having the ability to pull an inside straight at a Saturday night poker game or drive a hard bargain at a garage sale doesn't necessarily translate to the talent and experience required to effectively cut a good deal on a piece of property. Plus, the pot you're playing for in a real estate transaction is a whole lot bigger than what's on the table in that card game.
Negotiating a real estate contract of sale is not a time for amateur hour or a place to learn by trial and error. Some buyers think the negotiation is all about the price. But that's just one of a dozen or so considerations that must be properly combined to deliver the best possible deal. Even among agents there is a wide range of skills, ability and tactical finesse when it comes to the art of negotiation.
In sum, buyers frequently think they want certain things from an agent. Then, when they actually get into the process, they rapidly find out that what they need is quite different.
So, if you're a first-time buyer - or one that's been around the block a few times - remember that this process is constantly changing. If you get the guidance of a good agent, you'll substantially your chances of achieving success.
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Bob and Donna McWilliams are practicing real estate agents with more than 20 years of combined experience in the Annapolis area. Their Web site is www.BobDonna.com, and you can email them at McWilliams@BobDonna.com.
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