The "Better Deal Buyer" is so determined to get a "deal" rather than a home, that s/he will exasperate everyone involved by working with multiple agents and ignoring professional advice.

Seattle-area Realtors are suddenly finding they are meeting Better Deal Buyers everywhere.

"I am encountering more and more of these types every day, and I find that I am spending more time justifying my profession in general than my work as an individual agent VS. other agents when I market myself to these clients," says Washington Realtor Kevin White. "I feel that the overall strategy and philosophy of the “Better Deal Buyer” will be more damaging to our profession than the discount broker."

The latest wrinkle

One of the newest behaviors of the Seattle-area Better Deal Buyer is their use of their own company resources and multiple agents to buy and sell their homes.

One West Coast buyer's agent (who prefers not to give his name) says buyers in his area are getting worse to deal with because some local companies are sponsoring intranets and homebuying seminars where employees can shop for homes from other employees. That makes real estate agents outsiders in their own profession.

"There are several classes and instruction being offered throughout this marketplace (and I’m sure others) that are instructing potential buyers to approach listing agents independently and to negotiate for a zero or significantly reduced selling office commission for the listing agent to write up the deal for both parties," explains the agent. "I currently have a great listing in a very desirable location that hit the market on Tuesday, and I have already had three potential buyers approach me with this concept."

The agent says his own clients like to contact the listing agent to gain access to homes even when they are represented, because they might find a listing agent who will take the selling agent's commission off the price of the home.

"Many listing agents don’t ask if a client has representation," he says. "At an open house recently, a listing agent offered to waive 90 percent of the selling office commission if my clients agreed to write an offer via him. How do these people not take advantage of that? And, how does our profession stand to survive if agents are doing this?"

The Agents-are-worthless Better Deal Buyer

The agent says he was recently referred to one couple who were clearly unrepresented and did a market analysis on their home. Meanwhile he learned that they are using another agent's site who specializes in waterfront listings for their information, and a third agent is sending them automated listing updates.

"They still consider themselves to be unrepresented," says the agent. "Fine. Their goal is to find properties before they hit the MLS so they can get a private sale, they told me. They go on to state that they understand the value of real estate agents 'should surveys and home inspections come back less than we had hoped,' but other than that, they see no use for them."

Their reasoning was that when they bought their current house, they had found the home and the agent they had at the time didn't do much to facilitate the sale.

"They said that they preferred to search for property on MicroNews, which is an internal Microsoft newsletter/forum where homes for sale can be listed," says the agent. "'We will also try to sell our own home through the MicroNews before we do an MLS,' the couple told me. Then, they asked me if I would consider listing their house for a reduced commission. Needless to say, I ran from these people."

He believes that situations like these fuel the beliefs of the Better Deal Buyer.

That word of mouth spreads, and next thing you know, every single potential buyer out there will be asking the same thing up front," says the agent. "It is crazy, and we as a profession need to combat it. What I see is more of a trend towards discounting commissions on the buyer side, rather than the seller side (discount broker or FSBO). That to me is a more serious threat that agents who are offering and accepting these scenarios are creating!"

Explains White, "Buyers are more than happy to accept the risk of decreased or no representation in a transaction given that the money saved more than justifies the risk. The general public is so much more educated as the days go on about the logistics and financial aspects of a transaction that they are willing to take risk and look to 'win.'

Educating buyers

The Better Deal Buyer, says a Bellevue Realtor, who also declines to be identified, is why she spent "so much of my first year or so in the business spinning my wheels."

Buyers simply have to learn from the market. If they lowball a seller, they won't get the home they want.

She explains, "Here in the "Silicon Forest" Seattle, Washington, there are also multi-cultural issues at work as well. A large percentage of my clientele are immigrants who are well educated, skilled professionals working in software or other high tech industries. They are first-time home buyers that actually have quite a bit to put down on their first house, and start shopping in the higher priced neighborhoods that many folks consider "move up" neighborhoods. However, because they often come from any one of a number of countries where bartering is the norm in business, they have no hesitation about shaving $100,000 off the asking price when formulating their first offer, because they assume the house is grossly overpriced and they expect the seller to engage with them in an extended offer-counteroffer dialogue."

The agent says she handles the situation by explaining that the seller of the house has already hired an agent to estimate at what price the house will sell, and while the buyers by no means have to make a full price offer, the price gives an idea of the seller's expectations when formulating the offer price.

"I also make use of the CMA feature available through our MLS that show the percentage difference between the asking price and the selling price of the comparably priced homes in a particular neighborhood," she says. "This is particularly nice because it prints out in the form of a table which makes it a handy reference.

"And finally, sometimes I just have to bite the bullet and present offers that I know will be rejected because they are so low, but this serves to educate the buyers that they could lose a great house to a more realistic competing offer, and they tend not to make the same mistake twice. Sometimes, I just have to adjust my own expectations that it may take a few disappointments for buyers to start formulating their offers a little more realistically, and just expect that this process might take a little longer for these buyers to get all the way to closing."

Published: January 27, 2004

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.