Use of agents increasing
Are sellers more likely to use a real estate agent in a down market? Quite a few of you have argued lately that it's easier than ever before to sell a home without the help of an agent, largely thanks to the Internet. But as the pool of buyers has dwindled, it appears that a higher share of sellers are turning to real estate agents.
I compared two sets of data on annual home sales in Massachusetts. The Warren Group includes all sales. The Massachusetts Association of Realtors includes only sales involving a real estate agent. In theory, the share of Warren Group sales reported by MAR should be roughly the share of sales involving an agent.
Here are the numbers over the last decade:
Year---Warren---MAR---Share
1998---64815---50401---77.76%
1999---65716---49338---75.08%
2000---59542---46302---77.76%
2001---56366---44514---78.97%
2002---57192---46770---81.78%
2003---58688---49040---83.56%
2004---64568---50561---78.31%
2005---58627---48922---83.45%
2006---50322---43379---86.20%
2007---45339---41510---91.55%
The local housing boom began in the mid-1990s and peaked in 2005. As you can see, over the last two years -- as the market has fallen from that peak -- the share of sales involving an agent has surged past 90 percent of all sales.
The sales reported by MAR may involve an agent representing the buyer, but no agent representing the seller. But there is no reason to believe those proportions have changed over time, so the overall trend still is worth noting.
(Of course, this data doesn't address whether more sellers are using the various kinds of discount agents that have cropped up in recent years.)
Sellers: Has the state of the market changed your mind about using a real estate agent?
If you have access to skilled experienced agent that you work well with, it is worth every penny. You will get hooked up with the best mortgage rates, the best home inspectors, the best advice on how to stage your home, the best knowledge of where you are moving, and so on. I repeat, it is worth every penny.
Unfortunately, there are a lot of poor agents out there. They are inexperienced, or in real estate because they failed at other career options. The good news is that the weak real estate market of today is weeding out the weak.
I've come across a number of agents as seller and a buyer. Unfortunately, agents are a necessary evil. 9 out of 10 agents only looked out for their bottom line, lie and are just down right unethical. Unfortunately, they deserve the reputation they have. It isn't fair for that very, very small percentage that actually do have your interest in mind. There is only agent I would recommend to anyone. I think there is more need to home buyers and sellers to have an independent site to post comments and rate the agents they have worked with.
To a home buyer who is new to the area, like me, the right buyers agent (not the impostor who also has listings) is very important for the knowledge of local area.
On the sellers side, since I am also selling my place, I can tell you that the only reason I hired one is because I am not in that geographic area, so I can't travel back for showings. 99% of Realtors are basically people who FAILED in every other profession. Realtors and 3rd party recruiters are like a cesspool of failures. Ambulance chasing attorneys have better morals than realtors.
There are enough tools out there to help you sell the place in a timely manner IF you are willing to do the work. Otherwise you have no choice but hire one of those failures, unless you are lucky to find that "1-per center" out there.
As the owner of a Massachusetts 4 sale by owner advertising service, I know how hard it is to compare a lot of the data coming out of the NAR. It is very hard to determine the number of sellers that are successfully selling without agent representation due to a number of factors, including:
1) Sellers who use a flat fee MLS service as part of their other efforts selling 'by owner" are lumped together with listing agent sales. If a home is sold by a yard sign, word of mount, through a regional for sale by owner service, open house or any other means, the MLS - and the NAR still gets the credit.
2) Many private sellers work with buyer brokers and some pay all or part of their commission while still selling 100% "by owner". These figures are reported in the data as well, further muddying the waters.
Ah, I was wondering how you'd come up with an idea for a post that allowed people to chime in (once again) about how real estate agents are horrible people. Congrats!
I don't mean to hog up all the comments space, but regarding MAR's numbers, there may be other reasons for the reported increase. I'm not sure where they pull their data, but if they've been using MLS to collect, then they have probably been under-reporting until just recently.
MLSPIN, which covers a lot of Eastern Massachusetts, has improved dramatically over the past five years. Prior to 2003-2004, for example, no downtown Boston agent would use MLSPIN - we'd all use LINK (Listing Information Network, Inc.) It was either LINK or nothing. At the time, MLSPIN didn't even break down Boston by neighborhood, making it impossible to do any sort of easy search. So, MAR may have been under-reporting agent sales, all along.
They do a great job, now. And, it's quite an "open" system. Just about any buyer or seller can gain access to the database ... and you can put your listings in, as a seller, without agreeing to use an agent. It's called "entry-only". You just need to find an agent willing to do so.
My point is, some of the reported increase in "agent-use" might be due to other reasons. Of course, this wouldn't explain an increase of 14%.
#1 MIDDLE - is correct!
John K,
I appreciate the comments on the improving quality of the MAR data. I suspected something like this was possible, but when I contacted MAR, they insisted there was no reason to believe the data was becoming more complete. As the statistician said to the other statistician, go figure.
Ms. Provo, do you have the means for calculating and publishing a correction factor? For example, do you know which homes advertised via your service have sold and what percentage of those were counted as NAR/MAR sales?
"99% of Realtors are basically people who FAILED in every other profession. Realtors and 3rd party recruiters are like a cesspool of failures. Ambulance chasing attorneys have better morals than realtors."
Thats Hillarious... Cesspool of Failures!!!
HAHAHAHAHA
Awesome
Do you feel sellers have to use an agent because they know their property is not worth what they bought it for? With median prices now around 2003 ranges, I feel sellers will try to find agents who will maximize the property and prevent writing a big check at closing. But we all know how that story ends....
Reply to George:
I wish there was a reliable way to track sales other than anecdotally. The MLS is controlled and the agents involved can provide the data as closing occur. Private sellers are never under any obligation to report their sales, although we can scan local deed transfers and know when a property has closed and we know our advertisers by name and many by face as we have a walk-in office. We ask our sellers to provide us with an exit seller survey and many do report back, although it may be months from their actual sale. Some of our sellers also use a flat fee service but most do not. Many FSBO internet only sites only self-report data and leave listings on for months or years. I've also seen ads that have expired list them as "no longer available, most likely sold" when they have no idea what happened. Most FSBO listing sites operate as lead generators and really don't care if their advertisers get a phone call from a buyer as they are more interested in satisfying their affiliates (mortgage companies, agents, etc.) The only reliable data in my opinion is reported by the Warren Group, as they include all sales not just MLS sales. Hope that helps.
If a home is sold by a yard sign, word of mount, through a regional for sale by owner service, open house or any other means, the MLS - and the NAR still gets the credit.
If true, and MAR/NAR statistics include FSBOs with MLS listings, then the data trend is meaningless. It's basically a graph of rising Internet usage.
Re: the comments regarding the integrity of real estate agents. Real estate agents are not all failures. I have retired from a business I was highly successful at. I turned to real estate because I want something to keep me busy, make some money and have a highly flexible schedule. Personally I have purchased and sold a number of homes as we have moved due to job transfers. We have experienced agents who have worked only for themselves and their best interest and we have experienced agents who have helped us immeasurably in relocating to a new area and we would highly recommend. Just because there are good and bad in every profession, this does not mean I should lump all the good with a few of the bad. Perhaps the negative comments are from people who don't seem to realize that the purchase and/or sale of a home is a decision they are completely responsible for. That includes knowing what you are signing, realizing your financial limitations, living within your means and doing your own due diligence. No one is locked into keeping a bad agent working for you. Ask to speak to the agents manager and be specific with your concerns. Or simply fire the agent and find another one. There are a few out there.
Ummm... I consider real estate my first profession. I could've decided for a career as a full-time officer in the Massachusetts Army National Guard, having graduated Officer Candidate School in 1997. I could've decided to become some sort of financial analyst, consultant or broker with a large company in the Financial District having graduated with a Bachelor of Science in Management and a concentration in Finance. I could've decided to work with my father and become a real estate developer. But I decided in 1998 to become a real estate salesperson that was successful enough to have opened up my own real estate office in 2003. So, I take offense to your suggestion that I am part of the "99% of Realtors." I would also suggest that there are quite a few other real estate brokers out there that share some or all of my qualities.
It's very sad to see someone hide behind anonymity and post on an internet website while belittling not only a profession but the hard-working people behind that profession. Just my two cents. Take care, Jon
This blogger might want to review your comment before posting it.
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