The purchase of Move, Inc. by News Corp could bring more change to how homes are sold in America.
Last summer, I described on camera how our market is moving towards a single-agency format, and have been mumbling about it ever since. By the time the movie comes out, it will probably be a fait accompli.
News Corp already owns the primary real estate website in Australia, where the listing agents pay to advertise their properties on Rupert’s website, and buyers go direct. The commission rates are 2.0% to 2.5%, and according to this article, buyer-agents are involved in only 1 out of 1,000 sales:
Currently we call this ‘dual agency’, where the agent has a fiduciary duty to represent the interests of both parties. Eventually it will erode down to a ‘transactional brokerage’ format, where the agent’s role is reduced.
While sellers will marvel at the perceived savings, they won’t benefit much unless expert salespeople are manning the phones/emails/texts. Listing agents – who now make 5% to 6% when buyers go direct – will reluctantly accept the lower commissions but won’t push for top dollar.
Why? Because eliminating the buyer’s agent has always been the ultimate goal of listing agents, and the reward was double commission. When the extra incentive is gone, it will feel like working for half price, and, as a result, agents will mail it in.
In this format, the most important ingredient when hiring a listing agent will be how they handle the inbound inquiries from the buyers directly. Test them by calling their number – do you get a receptionist? Voice mail? Assistant? Or the actual listing agent?
I answer my own phone, and I’m pushing the product – your home!