By Frank Serio, CRS
The recent settlement between the NAR and the plaintiffs in the lawsuit over agent compensation will change the way how agents are paid. Agents will now have to negotiate their fees with clients, and by the rules of basic economics, setting a price on an item or service means demonstrating its value to the customer.
RRC’s webinar, Articulating Your Value in a Changing Real Estate Market, set out several ways that agents—particularly buyers’ agents—can inform potential clients about the value of their expertise. Part and parcel of that is knowing what your clients want and how you can best meet their needs—both the ones they expect and the unexpected.
The 2023 NAR “Profile of Homebuyers and Sellers” showed that the top thing a buyer is looking for when working with an agent is information on properties for sale. However, in today’s market, they can get that by going to Zillow or any other third-party portal. What the consumer today really wants—and needs—is a good negotiator, someone they can trust and who has knowledge of the market. Most consumers will not be comfortable negotiating by themselves because they’re attached to the outcome. When someone is attached to the outcome, sometimes they aren’t as strong as they should be when negotiating. Having an advocate on their side, whether as a buyer or a seller, is extremely important because while the agent doesn’t make the decision, the agent can guide the client by offering the right questions and advice.
In addition to being a good negotiator on their behalf, there are three key ways that you can demonstrate value to clients: substantive knowledge, process expertise and special influence.
Competitive market analysis: Substantive knowledge encompasses everything you understand about the markets you serve, from schools to zoning to community activities. One tool you can use in this area is competitive market analysis. It’s easy to see the value of this when setting a listing price for a seller, but it is also necessary so that a buyer understands what houses are truly worth in the marketplace. (One of the things that I share with buyers in today’s market is to think about resale before you buy.)
The purchasing process: Your next area of expertise is the purchasing process. Clients may know the big picture of a real estate transaction, but they should rely on an agent who has substantive knowledge of the process and what it takes to bring a deal to fruition. This process expertise includes having the right forms, the proper steps, the time frame, the proper communications among parties and so on.
Your special influence: Another benefit to hiring an agent is your special influence. For example, if there’s a problem just prior to closing, the agent has the special influence to make a phone call to a lender, appraiser or zoning commissioner to resolve that issue. An agent has special influence that the consumer wouldn’t have on their own.
As an agent, you will have to become a good communicator of how your services will benefit a client. Some agents are anxious that many more people will act as their own representatives, but this is not borne out by at least one recent survey. Bright MLS found that 76% of the buyers surveyed said they would definitely use an agent and that it was useful. Ninety-one percent said navigating the homebuying process without a real estate agent or broker would be very stressful. Those are huge numbers. So, while agents are apprehensive about the coming changes, the reality is that the buyer still wants you.
Explore all education offerings from CRS Instructor Frank Serio at www.CRS.com/education/faculty.
Photo: Getty Images/wildpixel
