A lot has changed in real estate in the past decade or so; both in terms of technology and in terms of buyer access to listings. This post will explain how things have changed and how those changes benefit today's homebuyers and sellers.In the old days, real estate agents had a lot of power over buyers. Listed homes were hidden behind a wall that only agents had access to, known as the MLS. Acting as a gatekeeper gave agents a great deal of control over which houses were shown to buyers. They could choose to only show their own listings or listings from other agents in their brokerage. Due to a number of real estate industry changes, that's no longer the case.
The Impact on Buyers:
Now buyers can view the MLS inventory in real time without an agent using sites like Redfin and Realtor.com, which pull directly from the MLS. Because of this, agents now have little influence over which homes get viewed.
Here's how a typical home search happens today:
- Almost all buyers start their search online, according to the National Association of Realtors and studies by Google.
- Most buyers use sites like Redfin, Realtor.com, Zillow or Trulia.
- Buyers search by inputting a city name or zip code, price range, bedroom parameters and any additional criteria, like square footage.
- Price and photo appeal help buyers decide if they want to see a home. Effectively, it's a beauty contest with the price also playing a dominant role.
- When a buyer sees a home he or she likes online, the buyer calls a realtor to gain access to the house for the showing. Typically, a buyer will select a group of homes and see them all in the same two-hour time period.
How Seller Commission Comes Into Play:
Through this stage of the process, a modern agent acts more like a door opener than an influencer. That said, agents do have some sway at the showing itself. The buyer may ask the agent, “Well, what did you think?”
If the buyer agent sees that the seller is offering a low commission relative to the other homes viewed, they are incentivized to downplay your home. For this reason, we encourage sellers to offer a standard buyer agent commission. You don't want to miss out on the opportunity to connect with as many potential buyers as possible.
A Shift for Sellers:
With tons of money savings to be had, many sellers are opting not to use a traditional brokerage to list and market their home. In fact, according to the National Association of Realtors, 29% of homes sold in the US last year were sold without a traditional, full-service listing brokerage. Sellers are using services like HomeBay to save tons of money on commission.