- Real estate agents remain as popular as ever among consumers across generations, the National Association of Realtors' 2017 Home Buyers and Sellers Generational Trends report shows.
- Millennials and Gen X buyers are more likely to buy their home using a real estate agent than other generations.
- FSBOs haven't budged from their record low of 8 percent.
They say some things never change. And despite the intertwined world we live in, made flat by the internet’s ability to increasingly cut out intermediaries and facilitate direct connections, consumers’ desire to work with a real estate agent appears to be one of them.
According to the National Association of Realtors’ (NAR) 2017 Home Buyers and Sellers Generational Trends report, this applies to both sides of the transaction, across generations.
Specifically, 88 percent of buyers and 89 percent of sellers (matching 2015 and 2016’s historic high) reported working with a real estate agent or broker, research drawn from mid-2015 through 2016 shows.
Of the sellers who worked with an agent, 83 percent of sellers worked with an agent who provided “a broad range of services and management of most aspects of the home,” while 9 percent “provided a limited set of services as requested by the seller,” and 8 percent “listed the home on the MLS and performed few if any additional services.”
Meanwhile, FSBOs (for sale by owner) remain bottom of the barrel at their record low of 8 percent.
“The need for a trusted real estate agent is still paramount. Personal relationships and connections remain the most important feature of the agent-buyer/seller bond,” the report noted.
The group of sellers least likely to use FSBO, at 7 percent, was the 37 to 51 age group, while the highest (12 percent) included those between 62 and 71.
A few reasons why real estate agents remain as popular as ever may be inventory shortages (agents have the inside market scoop); overwhelming amounts of data; the increasingly complicated selling and loan process; and real estate websites and ads that encourage consumers to “learn more” from an agent.
A hybrid solution
The report found that although millennials and Gen X buyers were most likely to go online during their search, they were also the most likely to buy their home using a real estate agent at 92 percent and 88 percent respectively.
“Online and mobile technology is increasingly giving consumers a glut of real estate data at their disposal,” said NAR President, William E. Brown, a Realtor from Alamo, California.
“However, at the end of the day, buyers and sellers of all ages — but especially younger and often DIY-minded consumers — seek and value a Realtors’ ability to dissect this information and use their expertise and market insights to coach buyers and sellers through the complexities of a real estate transaction.”
The two main ways of finding a home — embracing tech with online searches while making use of the personal connection with an agent — don’t have to be done separately, and millennials are great at using the two in combination, said Jessica Lautz, managing director, Survey Research and Communications at NAR.
Buyers said they needed an agent to help understand the purchase process. Buyers of 36 years and younger especially found hand-holding important when buying a home compared with other generations.
One of the reasons millennials appreciate the advice of an agent, Lautz explained, is because in a number of cases (20 percent) these young homebuyers are moving straight from their parents’ home to a home of their own.
“If they have never rented before, the process of homebuying is going to be that much more confusing,” said Lautz.
Referrals still the way most buyers find their agent
Referrals, meanwhile, are still the way most buyers are finding their agent of choice. Referrals by friends, neighbors or relatives were higher among buyers 36 years and younger (52 percent, up from 46 percent last year) and ages 37 to 51 (39 percent) compared to older generations.
In addition, the slice of homesellers who used a referral or the same agent they had worked with in the past was 64 percent, a number that springs to 74 percent for the 36 and younger seller crowd.
When first contacting their agent, buyers across the board initially reached them by phone while initial contact through e-mail was most common among buyers 36 years and younger (19 percent) and ages 37 to 51 (16 percent).
Buyers 71 years and older (32 percent) and 62 to 70 (25 percent) were the most likely to talk to their agent in person when starting the conversation.
It remains the case that when selecting a real estate professional to work with, consumers often interviewed only one real estate agent before making their decision.
Buyers 36 years and younger were the most likely to interview only one agent (70 percent), said the report, and across generations, seven in 10 buyers interviewed only one agent during the home search.
“People use referrals at such a strong rate,” said Lautz.
It may be a transaction they see a co-worker experience or someone in their community.
“Watching someone go through the process personally, that has the biggest effect on consumers,” she added.
Note about the survey: While 89 percent of sellers were using an agent to market their home and 8 percent of homesellers were using FSBO, the remaining small percentage sold their home to a homebuying company or to a large investor who was buying the home as-is, an inherited home, for instance.