The History and Value of Buyer's Agents

With so much turmoil happening in the real estate industry around buyer’s agents, I’ve noticed most of the discussion has been focused on what a buyer’s agent gets paid and how that’s changing, but I haven’t seen a lot about how they came about and why they were needed in the first place. Today, let’s discuss the buyer’s agent, its history and what being a buyer’s agent means in today’s market. I have represented more buyers than sellers in my career thus far and it has been my experience that it’s so much more than opening doors, writing offers and supporting you through the escrow process of purchasing a home.

In the 1800s, if you wanted to purchase a home, you would find an agent and you were kinda stuck with whatever listings that one agent had. Brokerages didn’t work together, so if you wanted to sell your home, you were pretty much stuck with whatever buyer pool the agent had. In the late 1800s, sellers decided it would be better if they had a larger pool of buyers, as this would sell their homes faster and for more money. But what would incentivize those agents at other brokerages to bring their clientele to another brokerage’s listing? This is when broker cooperation was born (where the listing brokerage offers a portion of their commission to the brokerage that brings a buyer to their listing) and in early 1900s the National Association of Realtors was born as well as the term “MLS” (multiple listing service). This concept really revved up right after WWII as a lot of GIs were coming home, getting married and settling down. The housing economy boomed and there was high demand for more agents. From this time until the late 1980s, there was no official professional “buyer’s agent” duties or responsibilities and buyers were getting fed up with getting screwed over because they didn’t have representation that they deserved and needed. I liken it to using the prosecuting attorney as your defense attorney as well. There’s no way that attorney can fully represent both parties. Because of this, buyer’s agency was introduced in the early 1990s and came with a specific set of responsibilities, the most valuable (IMO) being their fiduciary duty to their client. This ensured that a person interested in purchasing real estate would have an advocate in their corner.

Ok cool, thanks for the history lesson, Kris…but what does this all mean for us today?

I could list off duties that are easily Googled and required by law and would bore you to death, but instead, let’s look at this from the perspective of a prospective home buyer in today’s market and complex lifestyle. I’m your Firestarter when you need some motivation and your light bearer when you cannot see the way. I’m your cheerleader when things get hard and your bestie when you need to vent or share your fears. I’m your trusted advisor, confidant and market expert. I’m your manifestation coach when you hit a block or something doesn’t go as expected. I’m your future dream planning partner and your spiritual guide keeping you grounded. I’m your chaos shield and fierce advocate. I’m your “think outside the box” strategizer and expert negotiator. I’m your area expert and community pillar. I do so much more than paperwork.

There has been a lot of turmoil bubbling as the automatic assumption of buyer’s broker cooperation goes away. When I first heard the news, I was pretty emotional about it. In hindsight, to process, I went through the classic steps of grieving.  The first was denial because I could not understand how or why this could have happened. As a high producing agent and a bigger picture person, the whole thing was preposterous. Then I got mad because our government and law system is failing us in so many ways right now and now another ruling that has massive potential to hurt the average American person even more because of one man’s greediness (which has spurned a lot of spin off, cash-grab lawsuits because it set a precedence and everyone wants to make a quick buck these days-ethical and sociological implications be damned). This, of course, was followed by bargaining… maybe I could manifest this a way or maybe a miracle would happen. The longer nothing changed, the sooner the sadness creeped in. I couldn’t help but think of all the first-time home buyers that scrimped and saved to purchase their very first home that now have to either put that off until they can save more (while battling high interest rates and inflation) to pay for their agent or take the risk to go directly to the listing agent and be at their mercy. It takes away their right to separate representation for the middle and lower classes. This feels predatory and it scares me. But then I remember that there are still good people out there. Sellers who see the value in offering their home to a larger pool of buyers. Sellers who still want to give someone just starting out a chance. Someone who understands kindness and a fair playing field with everyone, simply because everyone deserves a chance, will not only leave a lasting impression of love on the earth but statistically speaking will sell the house for more money and in less time. It stimulates the local economy and helps take a lot of the headache off their plate and conscience. 

I’ve seen quite a lot of opinions both ways about it and I’m sure you have too. Now you know mine. Not everyone will agree with me, and I respect that. All we can do is bring as many different viewpoints as possible to the table and let you make the choice that resonates with you. Working as ANY type of agent, there is so much involved, and I am confident that people see my value and will continue to do so. As sellers will now have the option to choose whether or not they will offer buyer agent compensation, all we can do is keep servicing our clientele to the absolute best of our ability and to have faith that the world will continue to see our value. I truly feel if they don’t, they just haven’t had or been aware of what the full real estate purchasing or selling experience includes. 

For me, it’s worth every minute of blood, sweat and tears. The ultimate reward is the privilege of being the first person to congratulate you on your new home. What a precious and priceless gift. <3