The Office Your Listing Agent Works For Does Not Help to Sell Your Home

When we are trying to get a new listing with sellers, one of the common sales pitches that our competitors use is that they will “expose your listing to all of the agents at their office, resulting in a better chance of a sale.” In a large city like Seattle, I was suspicious of this claim and most times see transactions happening between totally unrelated listing and selling offices. I decided to run the data for King County sales in July 2009 to get to the answer. I also did an analysis of “dual agency”, which is when both the buyer and seller are represented by the same agent. There are many large real estate brokerages in Seattle, some with 50, 100, or even in a few cases 800+ agents, so there is bound to be some overlap of transactions within the same office.

One other important phenomena is that many times for new construction homes or condos, buyers will simply walk into a sales office and make an offer with the agent who is staffing the sales office. I am able to filter the data to compare new construction with resale to gain a more accurate picture of whether or not agents from the same office as your listing agent will sell your home.

King County – July 2009 – Resale Only Closed Sales Both Agents from Same Office Both Agents from Same Office % Same Agent Represents Buyer & Seller Same Agent Represents Buyer & Seller %
Houses 1458 146 10.0% 92 6.3%
Condos 356 59 16.6% 33 9.3%
TOTAL 1814 205 11.3% 125 6.9%

 

King County – July 2009 – New Construction Closed Sales Both Agents from Same Office Both Agents from Same Office % Same Agent Represents Buyer & Seller Same Agent Represents Buyer & Seller %
Houses 221 38 17.2% 23 10.4%
Condos 58 20 34.5% 12 20.7%
TOTAL 279 58 20.8% 35 12.5%

What does the data say?

What can we learn from this data? First of all, for resale of a home, the claim that the listing agent will get a buyer by advertising to other agents in their office is untrue in 90.0% cases. For resale condominiums, it is still largely untrue with 83.4% of sales happening between agents from different offices. Interestingly, most of the situations of a sale being completed by the same office are because of dual agency. For resale homes, if you exclude sales where the same agent helped both the buyer and seller, then 96.3% of sales happen between agents from totally different offices. For resale condos, if you exclude dual agency, then 92.7% of sales happen between agents from different offices.

New construction is a slightly different story. For new construction homes, 17.2% of sales happen between agents from the same office, with a whopping 10.4% of buyers using the agent in the sales office. For new construction condos, it is even more exaggerated, with 34.5% of sales happening between agents from the same office and an enormous 20.7% of buyers use the agent in the sales office.

Lessons Learned

There are two things to learn here. First, the claim that listing agents will magically find a buyer for your property by advertising to other agents in their office is largely untrue. The data simply doesn’t support this claim. There are cases of the listing agent finding a buyer directly, probably from their sign or advertising, but be wary of agents who overpromise on this point. Second, there are too many buyers of new construction homes and particularly condos who are blindly choosing to use the agent in the sales office to help them. They must not realize that they are free to obtain their own agent representation, and by using the sales office listing agent, that agent is getting paid double for their work, not to mention that the agent has an obvious conflict of interest with primary allegiance to the builder.

  • Good legwork on proving that most transactions come from outside agents. What you data doesn’t show is the harm that agents do by limiting their marketing of homes in order ot increase the odds of double ending the deals.
    My MLS actually has the option of not sharing the MLS data with other websites like Realtor.com and all the other real estate websites. The only reason I can think of why an agent would want to limit marketing exposure is to double end the deal. This harms the seller. Dual agency is a cancer that is destroying the integrity of real estate industry.

  • Good legwork on proving that most transactions come from outside agents. What you data doesn’t show is the harm that agents do by limiting their marketing of homes in order ot increase the odds of double ending the deals.

    My MLS actually has the option of not sharing the MLS data with other websites like Realtor.com and all the other real estate websites. The only reason I can think of why an agent would want to limit marketing exposure is to double end the deal. This harms the seller. Dual agency is a cancer that is destroying the integrity of real estate industry.

  • Amen! I have been trying to get this message across, too:) Good job on pulling the data together!

  • Amen! I have been trying to get this message across, too:) Good job on pulling the data together!

  • Ben

    Good work on the stats. I never gave it much thought but its interesting to see the results, however, the take away is less than earth shattering. For most agents, the "I’ll market to other agents in my office" spiel is pretty much an after thought. On the second point, right on.

  • Ben

    Good work on the stats. I never gave it much thought but its interesting to see the results, however, the take away is less than earth shattering. For most agents, the "I’ll market to other agents in my office" spiel is pretty much an after thought. On the second point, right on.

  • Actually, I think anyone using the "I’ll expose the listing to all agents in my office" bullet point in their marketing plan needs to come into the 21st century. It goes hand into the same fluff basket as selling agent bonuses and spam "just listed" emails to agents. If an agent (whether in house or not) is working with a buyer, they will find the house. Period. I’m not a statistician, but I think it would be interesting to see how odds factor into this….marketing certainly doesn’t.

  • Actually, I think anyone using the "I’ll expose the listing to all agents in my office" bullet point in their marketing plan needs to come into the 21st century. It goes hand into the same fluff basket as selling agent bonuses and spam "just listed" emails to agents. If an agent (whether in house or not) is working with a buyer, they will find the house. Period. I’m not a statistician, but I think it would be interesting to see how odds factor into this….marketing certainly doesn’t.

  • @Colleen – Agree that this is fluff and that if they have a buyer, the house will be found. But clearly this fluff is still out there being used, as I hear it from sellers when trying to get listings. Clearly this disinformation is still being spread by many agents.

  • @Colleen – Agree that this is fluff and that if they have a buyer, the house will be found. But clearly this fluff is still out there being used, as I hear it from sellers when trying to get listings. Clearly this disinformation is still being spread by many agents.

  • Kevin you Rock! I am so glad somebody finally ran the data on this. I have heard this tired story so many times, and I always cried foul as well. Nice investigative work my man!
    Trev

  • Kevin you Rock! I am so glad somebody finally ran the data on this. I have heard this tired story so many times, and I always cried foul as well. Nice investigative work my man!

    Trev

  • Kevin,
    This is really good data, and I’ve always wanted to know if this scpiel carried any weight for a listing agent. I would like to see what the data looks like with a longer time period though.
    -Tor

  • Kevin,

    This is really good data, and I’ve always wanted to know if this scpiel carried any weight for a listing agent. I would like to see what the data looks like with a longer time period though.

    -Tor