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 %|
|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 %|
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.
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.