Bruce Norris is a very knowledgeable and experienced player in the real estate arena.
His focus is on the buying and selling of trustee-sale properties around the Inland Empire, but he has other related business ventures, including the financing of trustee-sale purchases, and providing a vehicle for investors to participate in the hard-money returns.
He has his own radio show, provides trainings, and even has a blog! Here’s a link to his homepage:
He recently published a 61-page powerpoint presentation – link below. It’s a remarkable research project regarding the current market conditions with plenty of charts and graphs covering the unintended consequences and false indicators that he is seeing:
There are mountains of data in his presentation, but I’d like to address page 59, where it notes that 60% of the buyers went through the listing agent to make their offer.
On page 61 it notes that only 7% of the sales were over $300,000.
I regularly tell buyers who want to pursue homes in the lower price ranges to go direct to the listing agent – that market is too hot/competitive, and the failure rate of offers is extremely high.
You’ve seen the stories here – when we have sold the cheapie REOs in Oceanside that garner dozens of offers, the buyer agents tell the same story, something like this:
“I have written so many offers with this buyer, please take this one, I’m begging you!”
There aren’t that many agents who are going to work for months and months to earn $2,000 to $3,000 after splits and expenses, so I wasn’t surprised to see that the listing agents are representing most of the buyers too.
The big REO listing agents have plenty of buyers’ agents on duty, and most like to put their for-sale signs out prior to MLS-input, so they should be representing the buyers of lower-end listings.
How about in North SD County Coastal?
A check of the last 117 detached sales from Carlsbad to Carmel Valley revealed that 18, or 15% were marked as round-trippers, where the agent represented both seller and buyer. Only a couple looked like they were a result of quick action in the first few days of the listing. There were eight REOs, and none of those were sold by the listing office.
THOUGHTS ABOUT GOING DIRECT TO THE LISTING AGENT
1. It might make the difference when there are multiple offers – you could win the race, but you’ll probably still have to pay top dollar. I don’t think there are many legitimate, professional listing agents that would burn their sellers, and take their own offer when a better one is on the table.
2. Once the listing is stale, and the seller and listing agent are both fatigued but don’t want to lower the price, there might be an opportunity. But I think in both cases (1&2) you could still get the same deal and have your own representation if your buyer’s agent is really good.
3. If you go direct, don’t be surprised if the listing agent is more loyal to the seller, and acts like you owe them a favor. You’d think the listing agent would be grateful – but if they aren’t, it’s because they are uncomfortable with the situation, especially if they burned somebody else to make the deal. And don’t be surprised if they are resistant to sharing the commission either, they’ll think of it as their reward for getting you the deal.
4. If you were working with a buyer’s agent who was helpful, and for whatever reason you decide to go direct, do a little something for your previous agent. If they provided real assistance in your search, consider hiring them separately to consult on the deal, because you might need help along the way. If you feel uncomfortable telling them, then press yourself to at least buy them lunch or do something nice. If you don’t feel uncomfortable burning them, then they didn’t do much to help you anyway.
This is a touchy subject, agents don’t like to talk about it – and I don’t need commenters to load up please. But if there is more real estate revolution, it’ll probably be in this category – having just one agent facilitating the deal. Realtors will have to provide real value, beyond filling out pre-printed forms, and pointing out which room is the kitchen.