The Underground Market and the Comeback of the Hyper-Local Realtor
Buyers Remorse in this market is not what you think! It happens every week, sometimes several times. Desperate “want-to-be” home buyers call us, explaining that they regret who they chose as their real estate agent, asking if we can help them. We can’t interfere with their agency relationships, so we tell them “good luck” and then hang up the phone. These are buyers who have made dozens of offers but due to stiff competition, can’t secure a property. Sometimes it is due to their financial terms or offer strength, sometimes it is due to their choice of realtor.
It’s no surprise, over the last decade the real estate industry has changed dramatically thanks to technology.
Where home buyers once had to schedule an appointment with their realtor and sit down with a book of listings to see home options, many of new home choices are now made available to them online through websites like Zillow and Trulia.
Because of this, many home buyers have gotten into the habit of starting their home search on their own, waiting until the very last minute to engage with a realtor. There are many realtors who have fear-mongered the idea that these online websites are going to be the demise of the real estate agent. But that could not be further from the truth right now!
Over the last six months, we have seen the tides changing yet again in the form of the new underground market of non-MLS properties being sold among the best realtors behind the scenes.
The value of the hyper-local, extremely productive, and well networked agent has come bouncing back with vengeance.
One of the agents on my team recently did a Facebook live video. He mentioned that of his 25 or so sales he has made so far this year, almost half of them involved listings that never made it to the MLS (multiple listing service). What does this mean? They never popped up on consumers beloved websites, Zillow, Trulia, and REALTOR dot com never saw these listings and either did these passive buyers. Who else didn’t see these listings? Buyers working with agents who are part-time, not local to the markets they are looking in, or just a little lazy. Is your real estate agent hitting the phones for you, knocking on doors in the areas you want to be, and networking with other agents? If not, in this market, you’re going to miss out.
Why is this Happening?
For buyers, it is happening because it can be difficult and intimidating to be competing with 15 other home buyers for homes as they come on and off the MLS (multiple listing service) so quickly. Their agents are seeking opportunities for them outside of this platform because there are limited choices and too many buyers.
For sellers, it is happening because it often means less chaos, less showings, and less updating for them before making a sale. Our sellers are getting 100% or more of their listing price during pre-market sales, which often means they are saving lots of time and money. I recently sold something pre-market, in this situation my sellers were going to be adding granite and new carpet before going on the MLS. We happened to find a buyer who wanted to view it pre-MLS and they were happy to accept the carpet and granite as-is in exchange for the opportunity to buy the home quietly. Sellers netted more money and buyer was able to secure the home.
You would think most of these transactions involved dual agency, situations where the listing agent has a buyer and the agent connects him with his sellers behind the scenes to get a bigger commission check, but this also isn’t the case. We do a lot of business in Waconia, and there are a handful of other realtors in town, and amongst us we share listings we have in our pipeline, cooperate with each other, and work to give our buyers and sellers these unique opportunities.
Just last week, a colleague of ours had a buyer looking for homes for sale in Chaska. They called our team to see if we had anything coming up, and we did! We were able to get them into this new listing and secure a fantastic offer for our seller.
So what does this mean? This means that the market is changing, yet again, in favor of full time, professional, well networked agents and the buyers who hire them. Over the last five years we have seen an influx of people entering the industry trying to get in on the action but failing to invest in their careers by aligning with the right people, educational opportunities, or just failing to do the hard things. Many of them are part time or just generally not committed. This market is going to weed these Real Estate Agents out, and that is a great thing. This also means that Zillow and Trulia are only good for what they should be used for, seeing what you might be able to get in your price range, but not necessarily securing or finding “the one.”
I would say 70% of the time, when a buyer calls us on a listing off of a third party real estate website (Zillow, Truila, Realtor.com, etc), they are too late. That listing is already sold.
It will be increasingly more common and necessary for home buyers to partner with the RIGHT agent in their local market, not just any agent, if they don’t want to miss out on opportunities.
Looking for a new home for sale in Carver or Western Hennepin county or Scott county? We sell more homes in these areas than any other real estate team. From homes in Waconia to Carver to Chaska, Shakopee, to Eden Prairie and beyond, let our team of top producing real estate agents go to work for you.