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A bazillion years ago in the land of make believe real estate, there wasn’t a thing called buyer agency.  All real estate agents either represented the seller directly or were a “sub-agent” of the seller.    I personally call this submarine agency since these were agents lurking beneath the waters torpedoing buyers with “representation.”  What buyer agency looks like varies from agent to agent from the disguise-an-agent who is really a sub-agent to those that take the term seriously.  You know you might have a buyer agent in disguise if the agent shows you their listings first or their company listings first.  That is someone that represents their sellers or their company. Not you.  Me?  I take it seriously.  It’s a golden rule thing for me.  I guess I think if I’m going to hire someone to watch my back, I’d want them to actually do just that.

Like all things, events in the world of real estate triggered my thoughts on buyer agency.  This recent thought process was about why buyer agency is a good thing for sellers. Seriously…sellers, you should love really good buyer agents.  As if you had a choice but to listen to me, here’s why…

Lawsuits.  It’s that simple.

If you bought or sold a home 20 years ago, you likely had a one to two page contract.  Filled with few clauses, it was essentially a formal handshake agreement.  Today, we don’t like shaking hands without the proper legal disclosures that hands carry a lot of germs so it is in your best interest to carry around a lot of that hand sanitzer goop to prevent illness.   Our world can’t function without disclosures because we have learned to not be nice to each other, somewhere along the road, and we have engrained in our culture that even if it is your fault you can still sue someone just for the heck of it.   Why be responsible for your own behavior when you can blame someone else?  Not to demean those that have been truly wronged, but our real estate contracts seem to grow by a page each year with a plethora of new addenda to address the most recent issue of someone not following the golden rule.

As I stated before, I take buyer agency seriously.  As such, I’m often asking questions about a property before we make an offer because I prefer to not waste everyone’s time if there is something that would be a deal breaker for my client.  Inspections cost money, and I don’t want my clients to lose money, if I can prevent it.  I recently asked a listing agent a couple of things about a property.   The response I got was stunning.

Shoo.

Seriously.  Like a fly being swatted at, I was told to take my buyer and go elsewhere. Flabbergastation.  Okay, I’ll admit it. I just like saying the word.  You have to admit it is a pretty cool word though.

The shoo fly shoo strategy isn’t in the best interest of a seller, in my opinion.  The fact is that people sue each other in real estate ALL the time.  Part of my job as a listing agent is to minimize the chances that my seller will get sued.  I do this by being upfront, honest, and answering any questions the buyers have so they know, without a doubt, that my clients aren’t hiding anything.    There is no question that my clients will share what they know, openly and freely.  They allow buyers the opportunity to inspect and get quotes to their hearts desire because what I know is that an informed buyer is less likely to sue.

People engage in lawsuits when they feel that someone wasn’t forthcoming.  I can’t think of a better way to convince people that you aren’t forthcoming than to say “yeah, we don’t want to answer questions.”   I get that it might  be irritating.  I get that it might be time consuming.  I get that you would prefer the easy button.  Really, I do get it.  We buyer agents, that take our fiduciary duties,  seriously, are a pain in your hiney.  Dear sellers, please understand that you get the side effects of that as a benefit to you.  Shoo Fly Shoo has no place in the world of real estate.  I was given more information about my $70 Cuisinart tea pot than I was about a house for a client.  You all know a house costs just a tad more, right? Helping a buyer feel totally comfortable with the purchase of your house also means they will be less likely to sue you in the future.   If you don’t get anything else, please get that.

The first quarter came to an end a couple of weeks ago which means we have a bit more data to work with regarding home sales.  I know some of you are armed with tax return checks and wondering if it might be time to dive into the real estate market.  So here’s my opinion…

See my pretty lines?  The closer they are together the better the market is doing in terms of supply and demand.  We call that number inventory.  If they are closer it means that the volume of houses entering the market is closer to the demand of the market.  As you can see the first quarter of this year was pretty much on par with last year.  This is nice to see as we are seeing a decrease in inventory.   This is important for a healthy, normal market. We aren’t there yet, but at least things are starting to bottom out.

The reason buyers are coming out, of course, is the ongoing home price declines. We are at the point for many people where buying a home is equivalent to renting a house.  Renting a house for $1,000-$1100 a month?  We can get you a house for that now.  Low interest rates coupled with huge declines in home prices has made this happen.  Buyers are starting to figure this out and are coming out to consider buying.   The rate of home price decline has slowed down, but the decline is still happening.

A buyer prospect recently asked me what I thought of the current market.  I said if 2009 was a 1, because I’m telling you that year stunk in real estate, then we are at a 3.  We are clawing our way out of the hole, but we are still in it.

In 2007, NAR came out with the now infamous “It’s a good time to buy” campaign.  As home prices tumbled and the bubble had partially burst, NAR came out with the public confidence building campaign to encourage home ownership. This, of course, backfired with consumers and was distasteful to many agents who were sitting down with sellers struggling with their underwater home loans.   As far as I was concerned, it was a PR disaster.  It was like Philip Morris saying that smoking was good  because it caused “between 943 million and 1.2 billion korunas (about $24 million-to-$30 million) in health-care, pension and public-housing costs due to the early deaths of smokers.”  Read more  See?  Smoking is good because it kills people and it means we don’t have to take care of your sorry behind when you get old.  Um, yeah, okie dokie on that.

PR disasters.  From wardrobe malfunctions to trapped passengers on the runway to CEO’s on private jets while asking for bailouts, there have been some mistakes of epic proportions.  You can put NAR’s campaign in that league as far as I’m concerned.  You can’t tell people go out and buy with integrity, as people are losing their homes left and right.  Negative consequences stink.  The consequences to the NAR were minimal because the real consequences were to the membership, the REALTORS®.   There was a poll on a forum recently that simply asked “who is more to blame for the meltdown…REALTORS® or Appraisers.”  No mention of Wall Street and their credit default swaps.  No mention of banks having quotas for loans.  No mention of the Community Reinvestment Act.  No mention of those AAA ratings.

REALTORS® have a serious PR problem.   Why bring this up now?  Beside the obvious fact that I like to ask and answer my own questions, the fact is that in many areas it is starting to be a good time to buy, finally. Propaganda is meeting reality, five years later, but nonetheless they are colliding.  All my regular readers know I am a data geek, and I have been running the quarterly numbers for the Salem area which I will post in the next few days.   The problem is that real estate agents can’t say this and be believed.   That campaign that NAR ran in 2007, they should be running it now.  The problem is they spouted off at the mouth early and completely discredited every  real estate agent across the country with one fell swoop.  It’s what everyone wants in their trade organization: to have the rug pulled out from underneath you, right?

What triggered this post was a flurry of status updates by real estate agents coming across my Facebook wall for the past month.  I cringed every time an agent wrote “it’s a good time to buy” on their wall, not because it isn’t true, but because it reminds me AND more importantly consumers of that horrendous NAR video that came out.  It reminds them that the trade organization representing the industry wasn’t honest.   I encourage all real estate agents, whether you are a member of NAR or not, to steer clear of that phrase.  Agents need to re-establish trust and credibility with consumers after being lead astray.

The fact is that the market is showing indications of stabilization.  So my fellow agents, here is your chance to re-brand.  Use it wisely.