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The high cost of NOT using an agent
Plus, home prices hit a significant milestone
Rinku Mathew
June 28, 2024
Seller’s remorse
Did you know that almost 9 out of 10 home sellers have regrets about their home sale? That is one of the fascinating stats from the report in our second story today.
This report details several mistakes sellers make, but the biggest one is clear–they didn’t use a listing agent!
In our post-NAR settlement world, with people questioning the value of agents, this report so concisely and perfectly captures why agents are so valuable, and literally how much value they can add to a home sale!
We encourage you to read it, along with the rest of this fresh edition of The Blueprint!
- James and David
Typical homes selling below asking prices
Over the past four weeks, for the first time since the start of the Covid-19 pandemic, the typical house sold for slightly less (-0.3%) than its asking price. For reference, a year ago, the typical home was selling at the list price, and two years ago it was selling at about 2% above list price. That’s according to CNBC’s latest update. Here’s other key data from the report:
Annual home price growth slipped 5.3% in April to 4.6% in May, the slowest growth rate in seven months.
About two-thirds of homes nationwide sold over the asking price last month, the lowest share since June 2020
Total active listings are 35% higher than a year ago. However, inventory is still down more than 30% from typical pre-pandemic levels.
On average, homes are staying on the market for 44 days, one day more than last year
Our take
It’s excellent news that active listings are growing at such a fast pace. But that last stat about days on market is a key factor here. Since affordability is still an issue, many of these listings are getting stale. This is causing sellers to drop their asking prices, and causing actual sale prices to fall. We expect this dynamic to continue for the foreseeable future.
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The cost of not using a listing agent
Pittsburg, PA
Home sellers who used a listing agent made an average of $34,000 more on the sale of their home than those who did not. That’s one of the central findings by Clever Real Estate in their survey of 1,000 Americans who have sold a home since 2022. Here are some of the other fascinating takeaways:
89% of homeowners have regrets about their home sale
The most common regrets cited in the survey:
30% said they sold too quickly
29% said they missed their old home
28% said they regretted not selling for enough money
Among the sellers who didn’t have a listing agent:
54% said they regretted not using an agent
46% said they made legal mistakes during their home sale
43% said buyers didn’t trust them
Our take
There is so much in this report that we didn’t have space to cover it. It offers tremendous insight into the minds of sellers. But among all the stats in this report, the first one we discussed is truly the headliner. Home sellers who didn’t use a listing agent cost themselves $34,000! If that isn’t a selling point for using a listing agent, we don’t know what is! If you know anybody who is on the fence about using an agent and considering DIY-ing it, tell them what they could be costing themselves.
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The White House’s new pro-housing initiative
The Biden-Harris Administration just released a statement announcing the “first of its kind funding to lower housing costs by reducing barriers to building more homes.” The funding comes in the form of grants under the Pathways to Removing Obstacles to Housing initiative or PRO Housing.
PRO Housing was created by the U.S. Department of Housing and Urban Development (HUD) to provide federal funding to communities taking action to address barriers to building new homes. That funding will support updates to state and local housing plans, permitting processes, and land use policies, as well as to increase efforts at building and preserving more affordable housing.
Here are all the communities receiving a PRO Housing grant for a total of $89.9M:
Our take
We’ll tell you exactly why we’re unabashed supporters of this initiative. It addresses housing supply rather than demand. Most government programs try to address the housing affordability issue by offering buyers tax credits or other monetary supplements to buy homes currently on the market. However, doing that only exacerbates the problem. It creates a situation where we now have more buyers going after an ever-shrinking supply of homes. We need to attack this problem by incentivizing the building of more homes or other kinds of living spaces like condos, apartments, and townhomes. That’s exactly what this program overwhelmingly does. So we say, Bravo!
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Schematics
The news that just missed the cut
Fearing losses, banks are quietly dumping office real estate loans
Cities where home prices are falling
Top time management tips for real estate agents
Why BlackRock loves real estate debt that everyone hates
Redfin’s chief economist explains why she’s for a land value tax
Foundation Plans
Advice from James and David to win the day
As we mentioned in our recent podcast (the highly entertaining can’t-miss two-part conversation with international real estate broker and social media superstar Glennda Baker), we’ve been very fortunate. We’ve never had to fire any of our clients! Well… except for one. 99.9% of them have been lovely people.
Unfortunately, we understand that challenging clients are a part of the business. In today’s edition, we’d like to offer you some guidance on how to handle, and avoid, getting yourself into a tricky situation with a toxic client.
Choose wisely - Part of the joy of being an agent is that we get to pick our clients. If you think a particular client isn’t worth the hassle, then walk away! But if you choose to accept their business, make sure you are willing to accept everything they throw your way.
Know your worth - Challenging clients will often ask (and sometimes even demand) that you cut your rates, even after you’ve done everything for them. While it’s important to remain professional, it’s also important to stand up to stubborn clients. State your expectations early and hold fast to them. Don’t undermine yourself, or our profession, by caving into unreasonable demands.
Don’t get emotionally attached - You’re not the buyer or seller, or the ultimate decision maker. Instead, you’re a real estate advisor and counselor. Your clients can take your advice or leave it. Regardless of what they choose, your professionalism doesn’t depend on them. Remember this motto: "Say what you mean, mean what you say, and say it when you know it."
Not every situation is the same, but you don’t need to fly blind either. Learn as much as you can from the experience of others. Start here.
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Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
“Dare to live the life you have dreamed for yourself. Go forward and make your dreams come true.” – Ralph Waldo Emerson
We can’t improve on Emerson. Dare to live the life you want friends. Work to make it happen. Nobody else is going to do it for you.
Have a fantastic weekend, and we’ll see you back in your inbox on Tuesday.
- James and David
