More and more folks searching for a new home are bypassing real estate brokers.
According to research (shown in the table above) by the National Association of Realtors, 38 percent of buyers found the home they ultimately purchased from a sales agent last year. Contrast that statistic with 48 percent in 2001.
There was a dramatic change 7-point change from 2001 to 2003, after which the decline in broker assistance dropped by two or three percentage points. Exceptions occurred from 2005 to 2006, when the percentage stalled at 36, and from 2007 to 2008, when the number reached its nine-year low of 34.
Interestingly, the percentage has been inching up again, from 34 percent in 2008 to 36 percent in 2009 and most recently at 38 percent.
As you may well imagine, the Internet has been responsible for the drop from 2001, when 8 percent of consumers located their next home online, to last year. In 2010, that proportion of 8 percent had climbed to 37 percent.
Every other way of searching but one posted declines from 2001: Signs (15 to 11 percent); friends, relatives or neighbors (8 to 6 percent); home builders or their agents (3 to 4 percent); sellers themselves (4 to 2 percent); print newspaper ads (7 to 2 percent); home books or magazines (2 to less than 1 percent); and other (3 to less than 1 percent).
It seems the two phenomena affecting the changes had to have been the surge in Internet use and possibly the housing bust.
The Internet made it easy to find available properties without a broker’s access to proprietary databases. At the same time, the collapse of the housing market must have injected enough price uncertainty for buyers to have relied more on their brokers for advice, leaving much of the searching to them as well.
Rare is the buyer of mine in New York City who doesn’t pore over Streeteasy.com for listings, often finding those that are outside the parameters they have given me and sometimes ending up with those properties. That’s a good thing, if occasionally a head-scratcher.
Once they find a likely property, some of those represented buyers may be in tempted to be in touch with the listing broker to ask a casual question or two before alerting their own broker.
That’s a bad thing. Doing so muddies the waters, risks the buyer’s disclosure of information better kept confidential and may concern issues for which the consumer’s broker already has answers.
Innocent though such queries may seem, they can damn relationships and transactions.
When a buyer “hires” a broker, it is important to let the broker work without interference. Doing otherwise is not much different from contacting the other side directly in a legal matter for which an attorney has been retained.
It is dangerous and must be avoided.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022