In last month’s edition of REM, I wrote a column entitled The real point of buyer agency. I have since received a wide range of comments and inquiries. I am thrilled that brokers and salespeople from coast to coast are demonstrating such a keen interest on a subject that is long overdue.

I’m going to dip my toe into uncharted waters today and risk ruffling a few feathers. If you choose to read on from this point, I would ask that you read the entire article, and not stop at a point where you may find yourself at odds with my opinion. The reason for this will become self-evident.

Last month, my main point was that the Buyer Representation Agreement is a document that protects the buying public, but our approach to it is not consistent with that truth. Today I would like to explain why our industry as a whole has led us down a path that has been inefficient and ineffective.

For far too long we have bought into the notion that spearheading our prospecting approach towards obtaining listings is the be-all and end-all. This notion, I will argue, is simply wrong.

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Not only is it wrong, I am suggesting that the opposite holds more water. Specifically, we would be much more effective prospectors if we reverse our thinking and prospect for buyers first. Why?

1. Buyers are easier to find

Currently Toronto and Vancouver are experiencing a sellers’ market. By definition, this means there are many more buyers in the market looking for a home than there are sellers who are selling their home. In the Greater Toronto Area, there are approximately 15,000 listings on the Toronto Real Estate Board at the time of this writing. Simultaneously, there are over 43,000 members. That’s about one listing for every three members. Yet, almost every training session that deals with prospecting focuses on approaching sellers. All the while, there are likely tens of thousands of buyers looking for a home, the vast majority of which have not yet hired an agent to represent them. In addition, buyers are more willing to approach you and inform you that they are interested in buying real estate, than sellers are in letting you know that they are thinking of selling their home.

2. Buyers are easier to sign under a BRA than sellers are under an MLS listing

From 1986 to 1993, I considered myself a “listing agent”. In 1993 I reversed that approach and became a “buyer agent”. After 29 years of active service in this industry, I can say with absolute certainty that obtaining a BRA from a buyer is significantly easier than getting a seller under an MLS listing agreement. This is true with one caveat; if you give the buyer enough reason why they should.

3. Buyers are easier than sellers to develop a relationship with

We all understand that we are in a relationship business. We also understand, due to our nature, all relationships develop over time. The greater amount of time we spend with another human being, the greater potential we have of deepening and strengthening that particular bond. That being said, it is an accepted truth that working with buyers is more time-consuming than working with sellers. (I actually disagree with this perception, but I will have to leave that topic for another day).  But isn’t that the point? By spending more time with our buyers, we develop a stronger relationship with them. After the bonds have been formed and their level of trust and respect for us have risen, that would be a more powerful time to seek out their listing.

4. Buyers give twice as many referrals as do sellers

I read this statistic a number of years ago on NAR’s website and I believe it to be true to this day. The reason it’s true is because of the high level of trust an individual must have in us before they are willing to refer us to their friend, relative or co-worker.  Trust comes as a natural by-product of a deeper and stronger relationship, which is exactly why buyers give more referrals.

I am by no means suggesting that we should not be actively seeking listings, quite the contrary. What I am saying is that by first obtaining a repertoire of buyer contracts, we are in a much stronger position to obtain a greater number of listings with much greater ease.

In my next column I will provide you with four more reasons why working a buyer first plan is a more powerful and a more highly leveraged position.

2 COMMENTS

  1. To counter your Point 3 Header, specifically: it is my strong belief that “farming” provides a reasonable opportunity to eradicate that thinking, as stated: “3. Buyers are easier than sellers to develop a relationship with”

    For anyone new to the farming concept, depending on the physical location chosen and the relative turnover rate, it can take about three years to develop a position of “being-known,” when a would be farm-located seller requests to meet with you, and they will often greet you with, literally, open arms and or a really firm handshake, accompanied by words such as: “I” KNOW “YOU.”

    Followed by: “I really feel like I do. Over the years I have “followed” your career.” No finer words can welcome a rep. After that, even if they want to interview others, if you behave well, the ultimate decision will be made in your favour.

    Most listing salespeople prefer to be last in the interviewer’s appointment list. I preferred to be first, and invite them to continue interviewing if they were so inclined. My presentation gave them some ground rules with which to compare other presentations. And they called back to list.

    Do you automatically sign up your seller as a buyer, at the time of taking their listing?

    And likewise do you automatically sign up your buyer as a seller to be an active listing while you go through the process of helping them find their new home?

    How do you reassure them that they won’t sell their home and feel forced to make a less than perfect purchase? Or the flip-side, end up owning two homes?

    Equally balanced is the client’s fears: should they buy first and then sell? Should they sell first, and then buy?

    They will want to be schooled in the advantages and disadvantages of both situations, so they can make an informed decision.

    Part of your job description is to help them to balance their decision making process. There is no right or wrong answer. Each transaction stands on its own legs.

    Note in response to point about who requires more time spent: a proficient buyer agent will actively engage his buyer in the search, imploring the buyer to engage in conversation “immediately” if the buyer comes upon a property that might be of interest.

    For perhaps not so obvious reasons, time must be spent sorting through “procedures.”

    The rep needs to explain how the listing system works; the need for all concerned to “drive the streets” where the most likely places would be located that would appeal to the buyer. He might coincidently trip over a property before it gets “to the system.”

    Some seller reps install their own for sale signs; others engage the services of a sign installation company.

    There is an assortment of methods as to getting the for sale sign ordered: a team member might be assigned to process that order.

    The process might be assigned to a staff member back at the office. Likewise, the listing agent might not input the listing details, personally, into the MLS system.

    At the minimum there is the possibly that the listing is active for perhaps three or four days before a sign gets installed, (and the listing appears in the system), often dependent on the time of year and the weather.

    I often asked permission from the seller, to place a temporary loose sign board in a window, or on the inside of a glass screen door, so someone scouting the neighbourhood would see the sign, before the installer got there. At least this gets the neighbours talking.

    For sure a neighbour might wish to help provide your buyer if he only knew you were moving.

    Someone should draft a make-ready temporary brochure until full fledged advertising materials are available. A handout in case an aggressive inquirer appears, asking questions.

    At least print out a few copies of what information appears on the listing. Do “not” hand out copies of the actual listing contract, for privacy reasons.

    Something that has just a temporary fix, basic details available as a handout for anyone inquiring.

    As soon as a for sale sign is visible, the office will start getting calls. Make sure THEY have been put on the alert that a new listing is coming through the pipeline, so at the very least they can capture the caller details to pass to the listing rep.

    Nothing is more annoying than for a buyer rep to inquire about a new sign, only to find that the listing brokerage knows from nothing.

    Particularly frustrating after regular business hours when a call will only connect with an answering service who surely knows nothing, and you have your buyer in the car, or on your phone, inquiring.

    Particularly in a hot market the frustration can reach over boil status easily. Find the possible perfect property – if only you could find needed information. And fearful another buyer will get there first.

    Cordially
    Carolyne L

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