Recent class-action lawsuits have made crystal clear that the real estate industry is in the midst of a paradigm shift, which means brokers and agents need to shift their business practices, experts said Monday at the Small Brokers Committee meeting during NAR NXT, The REALTOR® Experience, in Anaheim, Calif.
It’s imperative for brokers to make sure their agents understand exactly how to communicate their value to their clients, said Lynn Madison, ABR®, broker-owner of Lynn Madison in Schaumburg, Ill., and owner of training company Lynn Madison Seminars. “Brokers need to help agents create and articulate their value proposition to their clients,” she said.
Madison added that while listing agents often communicate their value well to sellers, buyer’s agents need to give their clients a better understanding of what their job entails. “Break it down for your agents in bite-sized pieces,” she said. Here are the talking points she suggested:
- Find a suitable property to show the buyer. Based on the buyer’s wants, needs and budget, the agent is tasked with finding properties that check the right boxes and make sense for the buyer.
- Show the property. Agents are responsible for coordinating dates and times to show the buyer a property. They also need to know important details about the property and be able to communicate the features of the home to the buyer.
- Analyze the market. When it comes time to make an offer, buyer’s agents are responsible for analyzing the market to help their clients decide on an appropriate offer amount. Agents need to know the current state of the market on the macro scale and what’s happening in individual communities and neighborhoods. This information helps them assist buyers in coming up with a sound offer.
- Write the offer. Once a buyer settles on the amount of the offer, it’s the agent’s job to write up the offer and submit it to the listing agent or the seller. To do this effectively, agents need to understand what makes a sound and attractive offer.
- Negotiate on the buyer’s behalf. When it’s time to negotiate a deal, it’s the agent who acts as liaison. The agent ensures that the deal is negotiated in the best interest of the buyer. The agent often counsels the buyer and presents counteroffers to the listing agent or seller when needed. In many cases, the buyer relies on the agent to provide them the soundest information and advice in what is oftentimes their single most important investment.
- Get the transaction to the closing table. From insurance to mortgage loans, the agent often uses their wealth of resources to ensure that a transaction goes from offer to closing table. Agents often help their clients understand exactly what they need to ensure the deal closes, and they have keys in hand at the end of the day.
All of these components need to be communicated to the buyer at the onset of the relationship, said Madison. In today’s industry, a buyer representation agreement is essential to ensure the agent and the brokerage get paid, and the only way a buyer is going to sign an agreement is if they understand the nature of this professional relationship and the services the agent provides.
The data is clear, Madison said, noting that three-quarters of buyers say they’d use their agents again, according to NAR’s 2023 Profile of Home Buyers and Sellers. Buyers cited many of the above benefits of working with an agent—finding the right properties, negotiating and handling paperwork—as reasons they valued having an agent by their side. But the communication of the value of the agent is lost somewhere between the beginning of the relationship and the close of the transaction.
Madison noted that NAR’s Accredited Buyer’s Representatives (ABR®) course, which was recently revamped to address issues of compensation and value proposition, provides brokers with a road map for these conversations.