For real estate agents, time isn’t always moneyby Tim Manni
The real estate market has evolved quite a bit since the market tanked just a few years back. Everything from the types of properties available for purchase, to the lending conditions borrowers must meet has changed thanks to the downturn.
Even the relationship between real estate professional and buyer has begun to evolve in order to keep up with current market conditions.
According to a recent Chicago Tribune article, realty brokerages have begun charging customers for working with their agents. For some real estate pros, taking potential buyers out home shopping is no longer a gamble– some agents are getting paid for their time.
“Brokerages are under a lot of pressure at all levels,” Chris Eigel, CEO of Prudential Rubloff Properties, told Mary Ellen Podmolik of the Tribune. “Agents invest a lot of time and money working with buyers and sellers and frequently don’t get paid at all.”
“The buyer today realizes what a complicated world it is,” Nancy Nagy, CEO and president of Koenig & Strey, told the Tribune. “The thought of just throwing a buyer in the back of your car today and saying, ‘Let’s go,’ that isn’t the way to handle a buyer in today’s market.”
Will it work?
The experts say this new model can go in one of two ways:
- It will be a colossal flop like the ATM fees introduced Bank of America, or
- It will take off and become an industry standard like airline baggage fees
Like most things, it’s a wait and see scenario. But you can bet that industry folks are eagerly watching and waiting.
Why charge home shoppers?
The answer to that question is much clearer. For one, agents have always struggled with the time and money lost when home shopping doesn’t result in a sale, especially when potential buyers decide to shop for a home before getting preapproved.
“Some buyers want to see houses first and then see a loan officer second,” wrote Lynnette Khalfani-Cox in her recent HSH.com article, “3 things homebuyers should never say to a Realtor.” “But real estate professionals say that strategy is a colossal waste of everyone’s time.”
“What sense is it to look at a $300,000 house if you can only afford a $200,000 house?” asks John Mijac, an associate broker with Old Adobe Realty in Tucson, Ariz. “Besides, there’s an implicit agreement between me and the listing broker that I’m bringing qualified buyers to see the home.”
For a seller, it’s also “an unfair burden to bring people into their property if they’re not serious buyers who’ve been pre-approved for a mortgage,” he says.
Cathy Turner, an associate broker with Solid Source Realty in Atlanta, agrees. “No agent wants to put someone in their car and take them around when they haven’t been preapproved.”
Even for those home shoppers that are prequalified, declining home prices have resulted in smaller commissions.
Would you pay your agent for their time?
So far, Koenig & Strey said there hasn’t been much, if any, pushback from their clients. Other brokerages are certainly watching how these new fees play out before they adopt the idea.
If you are serious about buying a home, would you be willing to pay a real estate agent for their time?