We have noted that The 2016 National Association of REALTORS® Profile of Home Buyers and Sellers contains valuable information for sellers and their agents as to how buyers find the homes that they ultimately buy. The profile also contains valuable and interesting information as to how both buyers and sellers find the agents that they ultimately use.
88% of buyers used an agent in purchasing their home. That number has increased steadily since 2001 when the figure was 69%. 6% of buyers purchased directly from a builder, and 5% bought directly from an owner. Of the 88%, how did they find their agent?
Not a lot of "agent shopping" takes place among buyers. 69% interviewed only one agent, 19% interviewed two. So how do you get to be on the interview list? Referrals are far and away the dominant factor. 42% of buyers chose to work with an agent who was referred to them by a friend, neighbor, or relative (or an agent who was a friend, neighbor, or relative). 11% of buyers chose to work with someone with whom they had previously bought or sold a home. The rest of the sources are widely varied -- for example, 6% of buyers made contact with their agent as a result of the agent's name being on a "for sale" or "open house" sign.
This might seem like discouraging news for new agents. "What chance do I have of connecting with a buyer if I haven't already built a referral base and a list of past clients?" Here, a new agent wants to remember that "friends, neighbors, or relatives" category. 42% of buyers find their agent through referrals from them. You may know a lot of people who aren't about to sell; but some of them know people who are about to sell. Make a list and make sure your contacts know you are in the business. Not just the first month, but throughout your career.
Moreover, there are, just as there always have been, other ways of coming into contact with buyers who may choose to work with you. Some ways work better than others.
6% of buyers found the agent they used as a result of an open house. Another 9% found their agent through a web site. Interestingly, only 2% found the agent that they worked with as a result of walking into or calling an office and meeting the agent who was on duty at the time. In general, "floor time" is not very productive.
Agents who do want to get connected with buyers can prepare themselves so that a contact is more likely to lead to a relationship. 50% of buyers said that what they wanted most was "help finding the right home to purchase." In the 2016 survey, 90% said that knowledge of the real estate market was a very important quality for an agent to have. That is, buyers want agents who have "product knowledge" -- agents who know the market and the inventory. An agent who can impress a buyer with his/her knowledge of the market (not just his/her company's listings, or the particular house he/she is holding open) is the one who stands a good chance of establishing a relationship with that buyer who walks into the open house or makes a call to the office.
Sellers are just as likely as buyers to work with an agent. 92% of sellers had their home listed on MLS. But sellers, too, don't do much "agent shopping." Similar to buyers, 72% interviewed only one agent; just 16% interviewed two. Again, referrals and past business relationships were the dominant sources of agent contact. 39% used an agent referred by a friend, relative, or neighbor (or an agent who fit one of those categories). 25% of sellers employed an agent with whom they had previously bought or sold a home.
Other seller contact sources drop into single digits. Interestingly, compared to buyers at 9%, only 4% of sellers found their agent through a web site. Again, there are venues that agents who lack a referral or past client list might want to think about. Open houses account for 4% of the contacts that eventuate into a working relationship with sellers. Newsletters and personal contact together account for 6%. There's still some point to knocking on doors, sending out mailers, and dialing the phone.
Would-be listing agents would do well to note that the most important factor -- 31% -- in choosing a seller's agent was reputation. Sure, it's nice to have a track record of sales activity, but there are other aspects to reputation as well. 21% of sellers said that honesty and trustworthiness were the most important factors in considering an agent. Things like attitude and integrity are also components of one's reputation. Agents who want to build a business should pay attention to such things. Word gets around.