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Home / Articles / Real Estate / Happy Herald Realty /  What is the Business Model for a Buyer’s Brokerage?
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Wednesday, November 6,2013

What is the Business Model for a Buyer’s Brokerage?

 
What are the benefits of a Buyer´s Brokerage to the Sellers, Buyers and Agents in today’s market?

— John Dolman Deerfield Beach Florida

A: In the old days, all the real estate agents worked for the seller and in their best interests only. Now, representing buyers is not only accepted, it´s mainstream in the business of real estate brokerage. The pure buyer brokerage only represents buyers, and does not take listings. This allows them to serve their buyers without any possible conflict of interest or dual agency issues.

 

The buyer brokerage advertises their specialty and markets their business as a benefit to buyers in getting their interests served in the transaction.

Anyone who has been in real estate or wanted to become a real estate agent has heard the saying you must "list to last." Of course, it´s referring to taking listings, and the fact your business can´t survive if you don´t build your listing inventory. I don´t think it´s ever been true for everyone, and it´s even less true in the new real estate marketing world that´s dependent on the Internet. It was a tough decision for me, but I decided to give up listing and become a Buyer’s Broker. I love it. I never liked trying to convince vacation home sellers they had unrealistic ideas of the value of their homes in the market. I didn´t like the marketing costs involved, and definitely didn´t like being asked to take on housekeeping tasks for sellers while the home was listed.

It was a hard decision, but became easier in the failing markets beginning in 2007. One day I got rid of all of my signs, print advertising, and announced to the world I was now officially a Buyer’s Brokerage and came to work for Happy Herald Realty. Would I be making more money right now if I listed?

Probably, but that´s gross income; my expenses would be up to 20% or more of revenues when I listed before. Also, I´m happier working only with buyers, and that´s worth something. My marketing overhead is about 0% of sales this year, and as the market improves, that number won’t increase. While some real estate professionals complain about time wasted showing buyers homes, I find that much less of a problem than the amount of time I put into a complete marketing effort for a listing, including photos, individual listing website, print ads, reports to the seller, etc. All I do is work the Web, and I get some really great buyers.

Whether a new agent wants to list or not; considering buyers not worth the time while trying to build a listing inventory can hurt you when it´s important to get income flowing. Yes, you´ll show homes without a sale, and yes you´ll use some gas money and put miles on your vehicle. However, it could be less money than you´ll put into setting up and marketing your first few listings. At least consider buyers as important as sellers in your new business. You may just find that it´s a niche you can learn to love and profit from.

ASK GABE by Gabriel Palotas

HHR Manager, has more than 20 years of real estate experience with a proven record of productivity, quality and integrity. (Lic. FL Real Estate Broker • Nat. Auctioneers Ass. NAA • Int. Consortium of Real Estate • ICRE Transnational Referral Cert.)

 

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