Are buyers and sellers willing to work with new agents?
Day 20 of 30 – Robert Earl’s Prospective Agent Mentorship Guide – Digital Agent Show
As a new real estate agent, you may be worried about whether or not homebuyers and owners and going to be willing to work with you in your local real estate market.
I thought the same thing when I first got into the real estate market, but I quickly realized that being a new agent could actually work to the benefit of the buyers, sellers and investors that I was working with.
Advantages of working with a new real estate agent
The two main advantages that new agent have are time and inexperience.
I’m sure you read that and thought the following. “I can understand about having time, but how is being inexperienced going to help me?”
Let me explain.
When you are a new agent you have more time to:
- Work with a buyer or sellers.
- Find owners that are selling.
- More time to attract buyers to listings.
- More time to research issues.
Your inexperience can assist you in the following ways:
- Not as frustrated with the seller’s market or buyer’s markets.
- More willing to ask questions of your mentors, brokers or partners.
- Willing to do the research required of the market.
- More flexible than experienced agents that say my way or the highway.
NAR Survey of Sellers and Buyers
Each year, the National Association of Realtors publishes the results of a survey of home sellers and buyers. They do this in a Seller’s market alike we experienced in the housing market in 2020-early 2022 and during the buyer’s market of the past.
In the survey they asked, “How likely are you to use the agent that you worked with again in a future?” 89% said that they would.
They asked a follow up question. “Did you work with the same agent you worked with in the past?” Only 27% said that they did.
That means that a large percentage of clients worked with a different agent than they did before. 62% is a large number. This would have been for a variety of reasons. Their previous agent might have quit the business during the seller’s market or buyer’s market because they became frustrated bidding wars of the market. Others might not have followed up after selling a home leaving orphaned buyers or sellers.
When I say experienced, the numbers back it up. The median age of all Realtors is 56 years old with a median of 8 years in business. This age is higher than a lot of other industries.
Or they worked with a new agent that was hungry to earn their business and did the proper lead generation to develop a relationship with those selling and buying.
The results of this portion of the survey shows the value of new agents entering the real estate market.
The time you have available for sellers or buyers
Selling a home is stressful for sellers. They are busy with their lives and need someone to look out for their best interest. The same is true for buyers. While they are working, earning the money to buy their next home, they need a advocate that has the time to pay attention to their needs.
Should I sell my house in this market?
No matter how much the seller or buyer thinks that they know about the housing market, the fact that you are licensed will give you more information about the real estate market to help you work with sellers or buyers. That is, if you put in the time to research and learn. They have questions and are looking for professional guidance and answers to their specific questions.
They want to know what asking price to list their home for and what prices are doing in the current market. Buyers need to know what homes are good deals and if the asking price is fair or if there is room to negotiate.
They don’t have access to the housing inventory trends that you do in the housing market. If a market is a seller’s market, home prices tend to rise. Information reported about the local market in the newspaper or online is usually a few months behind.
Because of your access to the home prices in the market via the multiple listing system, you will be able to inform sellers so that they can set the right price when selling. You will be able to see trends in bidding wars, closing costs paid by sellers, and recent sales in the local area. Experienced agents may be too busy to commit to the research needed to satisfy the needs of the clients.
Being a new agent, you have more time to research all of this information in the real estate market.
Your time will enable buyers that you are working with to purchase real estate at a lower price, especially in a buyer’s market.
Do they know if you are a new agent?
Unless they look up your license information on the state licensing portal, they are not going to know if you are newly licensed or if you have been in the business for years. The only way they will find out is if you either tell them or you actions show that you are new because you haven’t received the proper training and guidance from your real estate brokerage.
They will never know you are a new agent if you understand the following
- local housing market conditions
- housing inventory
- interest rates
- contract and listing procedures
- marketing in a buyer’s market and seller’s market
Partnerships are Key
As a new agent, partnering with a good mortgage lender can help you understand current mortgage rates and there impacts during a buyer’s market, sellers market or a neutral market. Interest rates can change between the time the buyer is under contract until the time of closing. They can help you understand when market conditions dictate that your buyer should lock in their interest rates and when they should let them ride.
Partnering with a professional title or settlement company help you understand closing costs, deal falls through. they work with a number of real estate transaction.
These reasons and more are why I stress working with a mentor and joining the right real estate company in their local area.
Understanding the Current Housing Market conditions in your area
What is the difference between a buyer’s market, a seller’s market, and a balanced market?
The current real estate market in your area may be completely different than the market in other areas of your state of region. Markets are usually measured by the number of homes available for sale on the market at any point in time.
The characteristics of a buyer’s market
In a Buyer’s market, there more than 6 moths of real estate inventory available for sale. This is measured by counting the total number of homes for sale divided by the number of homes that have been selling per month on average over the past few months.
What is a seller’s market?
A Seller’s market would show less than 6 months of real estate inventory available. A sellers market may also include prices rising higher than a normal market and the presence of bidding wars.
How about a neutral market or normal market?
As prices rise, the market may adjust from a Seller’s market to a neutral market.
As a new agent, you may have more time to track the different markets, especially for particular cities and neighborhoods.
New Agents in a Buyer’s market
In a buyer’s market, new agents have the time to work with potential home buyers interested in finding the right home at the right price.
Homes tend to sit on the market longer and are subject to price cuts. Because of the low demand, buyers can get their dream home fairly priced without spending more money. But they are going to want to look at more homes and this is going to take more time. As a newer agent, you may be more willing to spend the time before the buyers purchased in order to earn the commission.
The market can lead to less competition with the buyer getting the property at asking prices or below. They also can ask for seller concessions and have the upper hand in negotiations. As a new agent, all of these factors can make your job easier.
Higher Satisfaction
Customer satisfaction can also be better because of the housing prices. The buyer will end up with better mortgage payment and will have you to thank for years to come. Higher satisfaction can lead to more repeat and referral business, especially when they are thinking of selling in the future.
First Time Buyers
A buyer’s market is also ideal for first time buyers. Being a new agent, you will have the time to assist them and answer their questions. A great answer might be the following: “That is a great question, let me find out and get back to you.”
New Agents in a Seller’s market
When real estate inventory levels are tight, home owners are going to be looking for an agent that is willing to do what it takes to get a home sold and willing to go the extra mile. The market will have more buyers than available inventory, due to population growth or the overall market conditions.
Seller’s markets demands that the agent is very responsive to the current housing market conditions and prepared to created an environment for multiple offers so that bidding war occur. Planning this out takes time as well as dealing with the frenzy of inquiries, showings and offers.
Newer agents tend to be more open to the opinions expressed by the sellers and willing to work with them. Not knowing any better can actually work to your advantage in this case.
Researching the list price that is competitive vs. the available inventory takes time that an experienced agent may not have because they are busy with other clients. They are not able to spend as much time and research available inventory in the area.
The seller’s market allows the owner to tell the buyer that they need to accept properties as is, with little or no inspection repairs or concessions. Sellers love this.
Buyers in a Seller Market
When working with buyers in a market where homes sell quickly, agents need to act fast and be available at a moments notice to show a property and write a contract for them.
They must be willing to advise buyers to offer over the original asking price if needed to beat out other competition and secure the property.
The lower mortgage rates over the past few years in the market showed that the best price for buyers was going in the other direction for sellers. Buyers interested in properties had to be prepared for multiple offers and paying a higher price.
Here is an advantage that new agents had in a seller’s market. They were willing to check back with the listing agents to see if a deal falling apart for other buyers meant that their buyer could take advantage of the situation and become the backup buyer. Experienced agents may not always have the time to do these checks and calls.
New agents in a balanced market.
Neither buyers or sellers have an advantage in this type of market. In a general market where a home search can take a few weeks, agents have to make more time to spend with the buyer or seller. The excitement of the new agent can propel them forward in a regular market, where an experienced agent may under go a feeling of boredom or been there, done that. Clients can tell when this occurs. They want to work with someone that is almost as excited as they are in getting the home sold or finding the home of their dreams.
You can have the upper hand as a new agent
As a new agent, you are looking to work with interested buyers and those looking into selling. It may seem daunting to have to compete with other agents in the current market that have more experience than you do. But you can turn this to your advantage and end up working with more buyers or sellers because you have more time available to work with them and you are not as jaded by the buyer’s market or seller’s market conditions as the experienced agent. You can position yourself correctly with proper mentorship, training and personal confidence of your knowledge in the housing market.
Bottom Line
Bottom line is that homebuyers and owners are looking for the agent that will give them the attention that they feel that they deserve. If a new agent has the time available to make this happen, then they will get the business. In many cases, attitude is just as important as experience. With an aging Realtor population, new agents to the business that are younger and understand the benefits of the latest technology and trends can carve out a distinct advantage for years to come.
