The Ten: Squeezed from all sides, buyer’s agents remain resilient
Buyer’s agents in 2023 were at the center of questions about compensation — and their value. But those who have made it through are confident of their worth.
Editor's Note: In a historic year shaped by trials — of all kinds — a handful of people and themes have emerged as defining forces. Real Estate News has selected the top newsmakers of 2023 who have left a mark on the industry or shown perseverance in the face of epic challenges and opportunities. They are The Ten.
The Ten: The buyer's agent
It's been a rough year in real estate, but perhaps no one has felt that more than buyer's agents.
From the brutal days of bidding wars to watching interest rates push homes out of clients' reach to lawsuits threatening the way they get paid, buyer's agents have been at the center of much of 2023's real estate drama.
But rather than wilting under the pressure, the best buy-side agents are showing their grit and resilience by adapting to changing markets and a changing industry.
"If you're going to last in this business, you have to be nimble," Atlanta-area agent Amy Fuchs of the FamilyHomesGa Team told Real Estate News, summing up her take on the ever changing buy-side landscape.
Gone are the days when buy-side agents could make a living opening doors and writing offers. With inventory at historic lows, buyer agents hustled to earn their commissions more than ever, hunting down properties and writing multiple offers for clients before getting one under contract.
And against this backdrop, the commissions lawsuits threatened to take the wind out of their sails and the compensation out of their pockets even as their jobs became harder than ever.
Challenges to the traditional compensation structure pose an existential crisis for buyer's agents as they contemplate how they will get paid. Suddenly, these agents may find themselves having to convince clients — who might have believed their services were free — that they're worth thousands of dollars.
"If you want to trust the most important investment in your life to a Google search or some dude who's going to charge you $199, you do you," said Melissa Savenko, an agent with Long & Foster Innsbrook Glen Allen Realty in Glen Allen, Virginia, said.
First-time buyers, the people with the least experience in real estate, may not be able to afford much more though, lamented Heather Maddox, a broker with Windermere Real Estate in Renton, Washington.
"Buyers are often using every penny they have for a down payment, closing costs and reserving a little bit to be able to go over ask and compete with other buyers," Maddox said. "They don't have extra money set aside to pay their Realtor."
But it could also help people understand that buyer's agents are professionals, said Monika Kaszycka, an agent with the Robert Dekanski Team at RE/MAX 1st Advantage in Clark, New Jersey.
"Not a lot of people understand this is our job," she said. "This is not a hobby, this is what I do for a living." Kaszycka said it will be "tough at first" if buyers have to pay their own agents. "But over time, people would get used to it and understand this is something they have to do."
Industry veteran J. Philip Faranda, a manager and associate broker at Howard Hanna, agrees. He predicts good buyer's agents will thrive under new transparency rules and shouldn't be afraid of the changes afoot.
"Agents who are terrified about getting buyers to officially hire them with an exclusive agreement need to get over that and learn their value proposition," he wrote in a column for Real Estate News.
Faranda suggests that the changes will, however, end the careers of buyer's agents who are unethical or poorly trained.
Savenko agreed. "Lots and lots of agents are going to wash out of the business," she said. "I'm not gleeful about that. But I do think there are too many bad agents in our business."
And regardless of how the compensation structure may change, the ability to help people find their new homes can make a sometimes difficult job highly gratifying.
Joan Goode, an agent with Dickens Mitchener Real Estate in Charlotte, summed it up: "I love making people's dreams come true … when they find that dream home, it is magical."