Buy Side: ‘If you’re going to last in this business, you have to be nimble’
Atlanta–area agent Amy Fuchs says people don’t always understand how their agents are compensated, and she worries commissions lawsuits could hurt buyers.
Lawsuits and speculation around the future of compensation have put buyer agency in the spotlight. In this series of stories, we hear directly from buyer's agents about what they do, their paths to success and their thoughts about how their jobs could change.
If people believe the adage that you get what you pay for, it's no wonder so many buyers don't understand the value an agent brings to the table.
Atlanta-area agent Amy Fuchs of the FamilyHomesGa Team says that needs to change, regardless of whether lawsuits force changes to the commission structure.
"I have to constantly show my value," she said, "People are always trying to knock us down on commission… They don't realize that's before taxes, before expenses, before my broker gets a cut, before I pay for the MLS."
She also says agents who used to advertise their services as "free" helped muddy the waters. "People don't understand how we make money," Fuchs said. "People will call and say, 'My agent is out of town — can you show me a house?'"
First-time, lower-income buyers will suffer if commission rules change
With a decade of experience in real estate, Fuchs said she's keeping an eye on the commissions lawsuits brought by sellers who say they shouldn't have had to pay the buyer's commission — and she worries about the potential outcomes.
"It's not me that's going to suffer," Fuchs said. "I'm going to figure out how to work it out. My biggest fear is that buyers are going to be hurt."
Fuchs said upper-income buyers who are used to paying for professional services will have an easier time paying their side of the commission. But first-time buyers and the less well-off may balk at the cost. "They're going to say, 'Why am I going to pay a Realtor $9,000? I could just do this myself,'" she said. "People don't know what they don't know."
"I spend hours studying contracts," she said. "I know what every word of them means."
Buyers need a savvy agent on their side
An experienced agent is also better equipped to handle negotiations, she said. "There's so much that happens in a transaction, so many variables."
The advantages of having an agent are obvious to Fuchs when she represents the buyer in a FSBO transaction. "I know that I can ask for things for my buyers that would never wash if they had an experienced agent on the other side."
And beyond contracts, a great buyer's agent can help find homes even if they're not on the MLS, Fuchs said. She searches for FSBOs, homes about to come on the market and more. "I'll door-knock if there's a neighborhood they really love."
Signing a representation agreement early sets expectations
Georgia requires a buyer's representation agreement before completing a purchase contract, but Fuchs said she doesn't wait, asking clients to sign at the initial consultation or after seeing the first home. "Before we see the next house with them, it's signed," she said. "It's a good way to set up expectations, agent responsibilities and buyer responsibilities. We write our commission in and how it's going to be paid."
During the frenzied days of the pandemic market, not all sellers were offering Fuchs' required 3% buyer's side commission. "We told our clients to note that you could end up paying some of our commission in this environment and this is why," she said.
Some buyers couldn't do it, and in their agreement, said they only wanted to see homes with a 3% commission offer. "Some people that couldn't afford to pay us, we just couldn't help," she said. "Maybe it was just not the right time for them to buy."
Steering isn't realistic, 'even if I wanted to'
When it comes to allegations that the current commissions structure gives agents an incentive to steer buyers to homes with higher commission offers, Fuchs says that's not realistic in the days of online portals and low inventory.
"The bottom line is, I can't even if I wanted to," she said. "I can't steer people away from Opendoor houses because they pay me less. There's only so much inventory."
Agents need to adapt — or they won't survive
Despite her frustrations with the commissions lawsuits and the general misunderstanding many consumers have about the role of real estate agents, Fuchs said she loves her work and will stick around.
"If you're going to last in this business, you have to be nimble," she said, noting that the market today can change quickly. "I have to constantly be learning and adapting, how to find more inventory, different lender strategies."
She points to the pandemic era market as an example of how well the industry can adjust. "We were still selling houses, but how we did business was extremely different." she said. "If we didn't adapt, we wouldn't survive."