The Profile of Home Buyers and Sellers published annually by the National Association of REALTORS® reveals what sources buyers use to find their new homes and whose help they seek when making that all-important purchase.
By Bob Hunt
MARINE, REALTOR® AND AUTHOR
We have noted that the 2018 National Association of REALTORS® Profile of Home Buyers and Sellers contains valuable information for sellers and their agents as to how buyers find the homes that they ultimately buy. The profile also contains valuable and interesting information as to how both buyers and sellers find the agents that they ultimately use.
Eighty-seven percent of buyers used an agent in purchasing their home. That number has increased steadily since 2001, when the figure was 69 percent. Six percent of buyers purchased directly from a builder, and 7 percent bought directly from an owner. Of the 87 percent, how did they find their agent?
Not a lot of “agent shopping” takes place among buyers. Sixty-eight percent interviewed only one agent; 18 percent interviewed two. So how do you get to be on the interview list? Referrals are far and away the dominant factor. Forty-one percent of buyers chose to work with an agent who was referred to them by a friend, neighbor, or relative (or with an agent who was a friend, neighbor, or relative). Twelve percent of buyers chose to work with someone with whom they had previously bought or sold a home. Thirteen percent came from websites, either of a specific property, or without reference to a property. The rest of the sources are widely varied—for example, 4 percent of buyers contacted their agent because the agent’s name was on a “for sale” or “open house” sign.
This might seem like discouraging news for new agents, who might wonder, “What chance do I have of connecting with a buyer if I haven’t already built a referral base and a list of past clients?” Here, a new agent wants to remember that “friends, neighbors, or relatives” category. Forty-one percent of buyers found their agent through referrals from them. You may know a lot of people who aren’t about to buy; but some of them know people who are about to buy. Make a list and make sure your contacts know you are in the business. Not just the first month, but throughout your career.
Moreover, there are—just as there always have been—other ways of coming into contact with buyers who may choose to work with you. Some ways work better than others. Five percent of buyers found the agent they used as a result of an open house. Interestingly, only one percent found the agent with whom they worked as a result of walking into or calling an office and meeting the agent who was on duty at the time. In general, “floor time” is not very productive.
Agents who do want to get connected with buyers can prepare themselves so that a contact is more likely to lead to a relationship. Fifty-two percent of buyers said that what they wanted most was “help finding the right home to purchase.” In the 2018 survey, ninety-one percent said that knowledge of the real estate market was a very important quality for an agent to have. That is, buyers want agents who have “product knowledge”—agents who know the market and the inventory. An agent who can impress a buyer with knowledge of the market (not just of company listings or the particular house he or she is holding open) is the one who stands a good chance of establishing a relationship with that buyer who walks into the open house or makes a call to the office.
Sellers are just as likely as buyers to work with an agent. Ninety percent of sellers had their home listed on the Multiple Listing Service (MLS). But sellers, too, don’t do much “agent shopping.” Similar to buyers, 75 percent interviewed only one agent; just 13 percent interviewed two. Again, referrals and past business relationships were the dominant sources of agent contact. Thirty-nine percent used an agent referred by a friend, relative, or neighbor (or an agent who fit one of those categories). Twenty-four percent of sellers employed an agent with whom they had previously bought or sold a home.
Other seller contact sources drop into single digits. Interestingly, compared with buyers at 9 percent, only 4 percent of sellers found their agent through a website. Again, there are venues that agents who lack a referral or past client list might want to think about. Open houses account for 4 percent of the contacts that eventuate into a working relationship with sellers. Newsletters and personal contact together account for 7 percent. There’s still some point to knocking on doors, sending out mailers, and dialing the phone.
Would-be listing agents would do well to note that the most important factor—31 percent—in choosing a seller’s agent was reputation. Sure, it’s nice to have a track record of sales activity, but there are other aspects to reputation as well. Nineteen percent of sellers said that honesty and trustworthiness were the most important factors in considering an agent. Things like attitude and integrity are also components of one’s reputation. Agents who want to build a business should pay attention to such things. Word gets around.
Bob Hunt is a former director of the National Association of REALTORS® and is the author of both Ethics at Work and Real Estate the Ethical Way. A graduate of Princeton with a master’s degree from UCLA in philosophy, Hunt has served as a U.S. Marine, as president of the South Orange County Association of REALTORS® (in 1988), and as a director of the California Association of REALTORS®. His email address is email@example.com.