The real estate world is changing fast, especially with the recent NAR settlement and the shift in commission structure. Buyer agents are under the microscope more than ever.
As commissions move to the buyer, agents need to deliver real value by teaching clients to “buy smart”.
This article has actionable advice to help buyer agents guide clients through the decision-making process, and focus on the net benefits. In this new world, upping your game and solidifying your position as a trusted advisor is key to staying relevant.
The Commission Structure Shift
The real estate world is changing how commissions are paid. For years the seller’s agent would handle the commission fees and split them with the buyer’s agent. That’s changing and buyers are now being asked to pay more of these fees.
So you need to bring more value to your clients. They may be hesitant to pay these new fees themselves. Show them your expertise and how you can save them money and make the process easier than ever.
You need to guide your clients through decisions as these new rules kick in. Buyers will want more personalized advice and may need to be convinced that investing in a skilled agent is worth their money.
Buying a home is an emotional process and the added commission cost will add to that complexity. Buyers will feel more stress with the commission cost on their plate. You can help with that by being clear and honest and a supportive guide.
The agent advisory board can be a useful resource. They can provide guidance and strategies to navigate these changes. Stay informed and be proactive and you’ll thrive under the new commission structure.
Agents need to adjust to these new norms to meet client expectations and deliver better service. Direct action will help you navigate this and keep the client’s trust.
Teaching Clients to “Buy Smart”
Buying smart means making decisions based on research and data. Help your clients understand market trends and pricing strategies. Show them how to evaluate a property’s true value beyond the asking price. That means looking at comparable sales, neighborhood growth potential and future resale value.
Have clients get pre-approved before they start house hunting. That way they know their budget and appear financially ready to sellers. You can also guide them on how to improve their credit score by paying bills on time and reducing credit card debt.
Real-World Steps for Financial Preparedness:
- Keep a good credit utilization ratio: Keep the balance on credit cards low.
- Avoid late payments: Pay all bills on time.
- Proof of income: Collect recent pay stubs and tax returns.
- Manage debt: Keep the Debt-to-Income (DTI) ratio in check.
Use What’s Available:
Tell clients about first-time home buyer programs and payment assistance programs that offer forgivable loans or lower down payments. These can help those with student loans or other debt.
Tools and Resources to Evaluate Value:
- Comps: Show clients recent sales of similar homes in the area.
- Neighborhood Analysis: Discuss future developments and growth.
- Cost of Buying: Let clients know upfront and ongoing costs, taxes, insurance and maintenance.
Negotiation Strategies:
Teach clients negotiation strategies. Being prepared to negotiate can save thousands. Knowing what to ask for, like closing cost assistance or repairs before purchase, is crucial.
Use these tips to empower your clients. By teaching them to buy smart, you’re not only helping them find a home but also making a smart investment.
Using Data and Tools to Build Trust
Using data and tools is critical to building trust. You can give potential buyers a deep understanding of the current market and what’s to come. That will make them feel more comfortable with their investment.
Market Analysis: Use Realtors Property Resource to provide comps, neighborhood trends and property specifics like square footage. That will help your clients evaluate risks and opportunities.
Real Estate Platforms: Websites like Zillow have tools to optimize your online profile. A well-written profile will build trust with clients immediately.
Mortgage Calculators: Tools like an online mortgage calculator will show clients detailed monthly payment estimates based on different mortgage types, loan terms and interest rates.
Market Reports: Send clients regular reports with key stats like average costs, mortgage rates and home sales prices. That will help them understand property taxes, homeowners association fees and monthly housing costs.
Loan Comparisons: Have clients explore different types of mortgages like fixed rate and adjustable rate mortgages. Fannie Mae and Freddie Mac tools can help compare loan estimates and terms and show total time in debt and expected payments.
Use Data for Transparency: Giving clients clear data-backed info on credit score rate estimates, debt payments and mortgage interest rates makes you the expert.
Visual Aids: Charts and tables can make complex data more consumable. For example, break down the sales price vs final purchase price to show hidden costs.
By using these data tools, you build trust, add value and guide your clients to make smarter decisions.
Long Term Value
Help clients see beyond the purchase price and think long-term. Have them consider future resale and neighborhood growth.
Educate clients on investing in property over time. Simple upgrades can add huge value. For example, updating a kitchen or bathroom can give a high return on investment.
Emphasize the current market. Explain how market conditions will impact the long-term value of their purchase. In a buyers market clients may get better deals, in a sellers market they may pay more upfront but potentially get quicker appreciation.
Talk about the additional costs beyond the purchase price. Clients should budget for closing costs, loan fees, homeowners insurance and potential repair costs. Those add up to the lifetime cost of homeownership.
Use examples to show how focusing on long-term value gives better financial results. For example, the monthly mortgage payment. A client who buys a more expensive home in a fast-growing neighborhood may see faster appreciation over time and offset the higher payments.
Remind clients of the rule of thumb: Spend on basic maintenance today and avoid expensive repairs tomorrow. For example, regular maintenance of the heating system will avoid the higher cost of major repairs.
Finally, alert clients to hidden costs like private mortgage insurance and potential surprise repairs. This will help clients make informed decisions for stability and growth.
To make sure that you remain transparent to your clients with documents and to communicate better, you can use real estate transaction software like ListedKit.
Negotiation to Maximize Client Savings
Negotiation is a key skill for real estate agents. The goal is to get the best deal for your client, price and value.
- Know the Market: In a competitive market, you need to act fast and make strong offers. Use recent sales data to support your bids.
- Use Inspection Contingency: Include an inspection contingency in the offer to protect your clients. Use an inspection checklist to identify issues and negotiate repairs or price reductions.
- Have a Solid Purchase Agreement: A well-written purchase agreement will protect your client’s interests. Make sure it has all the contingencies and favorable terms.
- Listen and Communicate: Good negotiation starts with understanding the seller’s position. Listen well and communicate clearly to build trust and find a win-win.
- Be Flexible: Being flexible on closing dates and possessions can sometimes get you a better price. Show the seller you’re willing to negotiate on more than just the price to find a win-win.
- Showcase Your Client’s Strengths: Show your client’s financial readiness and commitment. Pre-approval letters and large down payments will make your client’s offer more attractive.
- Stay Unemotional: Keep emotions out of it to make rational decisions. Have your clients view the property as an investment not just a future home.
Use these to negotiate and get your clients the best savings and best investments for them.
Communicating Your Value
To communicate your value as a real estate agent, frame yourself as an advisor and advocate for your client’s best interests.
Tell them you’re there to guide them through the house hunt, from finding the perfect home to getting loan approval with a trusted mortgage broker.
Showcase your expertise by analyzing the market and explaining how you help clients make informed decisions. Use simple language to describe how you evaluate a property’s value and predict its appreciation. That will make them feel like they’re making a smart investment.
Showcase your past results and client testimonials to build credibility. Share stories of how you’ve helped clients through the buying process, from finding their dream home to closing the deal. Those real-life examples will show your expertise and reliability.
Tips for Communicating Value:
- Use data and statistics to back up your claims.
- Explain complex terms and processes in simple language.
- Share client success stories and testimonials.
- Show yourself as an advisor and advocate.
A confident tone helps build trust. When talking about the responsibilities of a loan officer or mortgage broker explain how your partnership will make the buying process smoother. Your goal is to show potential buyers that choosing an experienced agent like you will make their house hunt more efficient and successful.
Use these, and you’ll communicate your value, which will be an essential part of your client’s real estate journey.
Closing Thoughts
In this commission-changing world buyer agents must adapt by delivering real value to their clients. By teaching clients to “buy smart” you’ll build trust, get more business and better results.
To thrive in this new world refine your strategies, showcase your expertise and be a trusted advisor.
Now’s the time to step up, guide your clients with confidence and cement your place in the evolving real estate landscape.
