Attitudes about real estate agents are in a period of major flux. Before the pandemic-induced spike in home values, sellers were fairly relaxed about selling their homes. Many of them, intimidated by the prospect of finding a realtor, were happy to sell to a “we buy houses for cash” company, or even sell their home themselves, as a “For Sale by Owner” (FSBO) sale.
A new study by Clever Real Estate shows this trend has reversed. In 2022, more sellers than ever are finding a real estate agent for their home sale. They realize it’s their path to the most profitable sale possible, even once they take real estate commission into account. This has opened up even greater opportunities for industry innovation — everything from flat-fee brokerages, to discount real estate brokers, to home buyer rebates, to innovative agent-matching services like Clever Real Estate.
Digging into the study’s findings could yield a lot of valuable insights, no matter who you are. Sellers can discover their blind spots regarding how the sale process works, and learn what agents can (and can’t) do for them. Agents, on the other hand, can learn how to most effectively reach clients, and what they’ll have to do to survive the coming industry disruptions. Let’s look at some of the most interesting data points!
1. Many Sellers Believe The Housing Market Is in a Bubble
A surprising 45% of home sellers think the market is overinflated and due for a correction in 2022. Around a third (31%) said they don’t believe the market will crash, while 24% said they weren’t sure.
Excluding the people who weren’t sure, 60% of sellers think the market is primed for a crash, while 40% don’t.
2. Fears of a Bubble Are Translating Into Action
More than a third of sellers (35%) have moved up their plans to sell their home, reasoning that if the market is going to crash, they should cash in ASAP.
This is especially significant because if enough sellers act as if the market is about to crash, that could bring about a decline in the market.
3. Despite Their Doubts, Sellers Believe Their Home Will Sell Over Ask
Sellers are pretty optimistic about their home sales. 43% expect their home to sell for more than the asking price, and over a quarter (28%) expect to receive an offer on the very first day of listing.
Sellers think it’s more likely that their home will set off a bidding war (30%) than have trouble attracting a buyer (25%). Even if sellers think the party is going to end soon, they’re confident they’ll be able to cash in before the end.
4. A Majority of Sellers Expect to Sell Their Home Within a Month
53% of sellers think they’ll be accepting an offer within a month of listing. Around 28% of sellers think they’ll accept an offer within two weeks of listing; only 15% of sellers expected to sell their home that fast in 2019, which shows how quickly optimism has risen.
5. 8% of sellers are ultra-confident in their home, and expect to sell it within a week.
These expectations aren’t unrealistic; according to data from the National Association of Realtors (NAR), 84% of homes that sold in February 2022 spent less than one month on the market.
6. Sellers Are Very Confident In Their Home’s Appeal — Maybe Too Confident
Over a quarter of sellers (26%) think it will take five or fewer showings to sell their home, while 62% think it will take 10 or fewer.
There might be some subjectivity at work here; even in the red-hot Portland, OR market, homes took around 25 showings to sell.
7. Sellers Have Gotten More Interested In Hiring an Agent
In 2019, only 54% of sellers planned to use an agent to sell their homes. In 2022, that number has shot up to 77%. Before the pandemic sent home prices into the stratosphere, a lot of sellers thought it was worth the risk to try an FSBO sale; today, with so much money potentially at stake, sellers want an agent to maximize their returns.
8. Younger Sellers Are Especially Interested In Agents
Millennial sellers have come around on agents — in 2019, only 47% of them were planning on using an agent to sell their home, while in 2022, 80% intend to use an agent. That’s a striking reversal, and a consequential one considering millennials now make up the largest cohort of home buyers.
9. A Huge Majority of Sellers Say Realtors Play an Important Role
An impressive 85% of all sellers said that a realtor plays a very or somewhat important role in a home sale.
While a majority of sellers plan on working with a realtor (82%), 8% plan on going it alone. So why do some sellers object to using an agent, even if they know they may be disadvantaging themselves in the marketplace?
10. Fewer Than One in Ten Sellers Plan to Sell Without an Agent
The top two reasons given by sellers who plan to sell their homes without the help of a realtor were that they think they can handle it themselves (56%) and they think an agent is too expensive (56%).
11. Most Solo Sellers Think An Agent Won’t Get Them a Higher Sale Price — and They’re Wrong
A large majority of sellers who aren’t working with an agent (79%) said they don’t believe that working with an agent will get them a higher sale price.
Not only is this incorrect, but the opposite is true. According to data on FSBO sales, homes sold without agents sell for 26% less than comparable homes that were sold in an agent-assisted sale.
12. Sellers Don’t Worry About Finding a Buyer Anymore — But They Do Worry About Finding an Agent
In 2019, one in five sellers were worried they wouldn’t be able to find a buyer. Thanks to a hot market, in 2022, only 11% of sellers think they’ll have trouble attracting buyers.
On the other hand, the percentage of sellers who think they’ll have trouble finding an agent is rising. In 2019, only 14% of sellers said that the hardest part of a sale was finding an agent; today, nearly one in five sellers (19%) think finding the right agent is their greatest challenge.
13. Almost Three-Quarters of Buyers Are Open to Using AI Instead of an Agent
A surprising 73% of all sellers say they would consider using artificial intelligence (AI) to find a buyer instead of using an agent.
On top of that, almost half of all sellers (47%) think AI could do a better job of finding a buyer than a traditional agent would. Notably, millennials are much more likely than older generations to think AI is superior to an agent.
14. Most Sellers Think the Internet Is the Best Place to Find a Buyer
Over half of sellers (59%) believe that social media platforms (14%) or real estate websites like Realtor.com or Redfin (45%) are the best ways to find a buyer for their home.
Only 41% thought open houses, referrals, window shopping, and realtor introductions were the best way, illustrating how much the home buying process has shifted online, at least in the perceptions of sellers.
15. Most Sellers Don’t Know How Much Real Estate Commission Costs
Less than half of all sellers (46%) were able to identify “4-6%” as the amount of commission. Just over a third of sellers (34%) thought it would be more than that, while 10% thought it would be less.
16. Many Sellers Don’t Know Who Pays Commission, Either
42% of sellers thought the buyer was responsible for commission, rather than the seller.
17. Most Sellers Think Commission Is Fair (Once They Know the Facts)
Once sellers were told that the average commission is around 5.5%, and paid by the seller out of the proceeds from the home sale, 69% of respondents said they thought that rate was fair.
18. Most Sellers Don’t Know What an Agent Does (and Doesn’t) Do
When asked who conducts tasks ranging from home appraisals to closing paperwork, to getting a home on the MLS, to home staging, etc., only 2 out of 1,004 respondents were able to correctly identify the tasks that are and aren’t performed by an agent.
19. Sellers Are Going Online to Find an Agent
For decades, word-of-mouth referrals were the preferred way of finding a real estate agent — but referrals have fallen to third place in 2022.
The most popular ways to find an agent? Online real estate platforms like Zillow, Realtor.com, or Clever Real Estate (54%), followed by online review sites like Yelp or Google (48%).
20. Sellers Want an Agent with Experience — But Not Too Much Experience
81% of respondents said they preferred an agent with 9 years or less of experience, while only 19% said they wanted an agent with 10 or more years of experience.
As the home sale process moves online, and younger generations enter the home buying arena, they’re looking for agents who are familiar with the latest technologies and market insights. This highlights the importance of agents staying current with innovations like blockchain.
21. Luckily, Agents Are Getting Into Blockchain
Many agents, especially younger ones, are moving towards using NFTs and blockchain to streamline real estate transactions. In theory, using blockchain could enable instant settlements and much faster closings, since you could register titles, surveys, property transfers, and other aspects right on the blockchain, instead of doing it in the slower, traditional “IRL” way.
If you’re into these cutting-edge technologies, this could make working with an agent much more attractive.
22. Agents Are Likely Going to Face More Competition — Which Is Good for Customers
Many real estate experts think that huge companies like Zillow will soon officially declare themselves a brokerage, which will put them in direct competition with real estate agents.
This will force agents to innovate and compete for business, becoming more local, more specialized, more responsive, and more catered to the individual customer. Those are all great things for customers, especially as commissions trend downwards.
23. Agents Are Pivoting to Video
Sellers want tech-savvy agents — and agents are complying. Real estate agents know their social media presence is their bread-and-butter, and they’re following the wider social media trend toward short-form, quality video.
Millennials are already using social media to find their next real estate agent, and they’ll probably find them via TikTok or Instagram stories — not Facebook or Twitter.
24. Consumers Are Getting More and More Access to Data — Eroding Agents’ Exclusivity Advantage
Just a couple of decades ago, home buyers couldn’t even look at listings unless they went through an agent, and there was no easy way to look at block-by-block or neighborhood-by-neighborhood home values. Agents had a tremendous amount of power just through their exclusive access to the local MLS.
Now, any buyer can look at Zillow for up-to-the-minute home value data and the latest listings. This balance will continue to tip as consumers learn more about average commission, how commission works, and what agents provide for that commission. While this empowers consumers, it also has pushed agents into providing value in different ways — which has started to provide buyers with a different, but arguably richer, agent experience.
25. Buyers May Need Agents to Help Compete with Foreign Capital
Many experts think foreign investors will pour into the U.S. real estate market in 2022 and beyond, as the pandemic wanes, and global instability pushes investors to find a dependable place to store value. In a U.S. real estate market that’s already short on inventory and extremely competitive, an agent may provide a much-needed edge to the buyer just looking for a starter home for their family.
26. A Great Agent Can Tell You Difficult Truths — For Example, That You May Be Better Off Staying Put
As sellers learn what agents do for them, and how much they cost, they’ll likely be even more likely to use an agent for their sales. But a lot of an agent’s most valuable expertise is intangible.
Agents can often see the big picture better than individual buyers and sellers, so they may have valuable advice to give. For example, the transaction costs involved with buying and selling a house, plus moving expenses, make it very expensive to move. On top of that, your early mortgage payments go mostly toward interest, while the later payments go toward principal— meaning that, the longer you stay in a house, the better off you’ll be financially.
For sellers who are feeling restless, but have only been in their home for a few years, an agent may be the only voice of reason telling them they might want to stay put.
27. An Agent Should Help You Avoid Buying Too Much House
It can be tempting, for an enthusiastic buyer, to buy as expensive of a house as you can afford. But experience suggests the opposite approach is wiser: you should buy a house that has the features you actually need and intend to utilize. Larger homes are more expensive, cost more to live in, and need more repairs — and once you realize you don’t need all that space, those costs are going to feel like a real burden.
An agent can help you find a home with a footprint that makes sense for you — not just the largest one you can find.
28. A Good Agent Will Remind You That Your Home Isn’t an Investment
That probably sounds strange, in an era of rapid home appreciation, but it’s true. An investment should generate cash; a home absorbs cash, in the form of taxes, maintenance, etc. A smart buyer understands a house is a home first, and an investment second — if at all.
29. You Can Have a Great Deal or a Great House — But Probably Not Both
Experienced agents have seen hundreds of home sales (or more), so they know that it’s pretty rare to get a great deal on a great house.
Sellers with a great house know they have an appealing property and don’t have to give a big discount to find a buyer. Buyers who insist on getting a “great deal” often end up buying flawed properties with little interest or competition — and may regret it later. An agent can help you keep perspective when you’re navigating this delicate balance.
30. A Good Agent Will Remind You That Not All Homes Hold Their Value
The real estate market is so hot that some buyers may assume that any home they buy will hold its value — but that’s not the case. There are no guarantees, and plenty of properties lose value because of transportation changes, area employers leaving, or trends shifting.
Unique or custom homes are especially susceptible to losing value because of changing tastes, and a good agent can advise you on what kind of properties will age well, and which ones won’t.
31. A Good Deal Now Can Complicate Your Future Sale
Getting a great deal for your home doesn’t necessarily lock in a big windfall when you sell later. Information like how much you paid for your home is a matter of public record, and the next seller will figure that into their offer. If you benefited from a big discount, why wouldn’t they want the same treatment?
Having an agent to negotiate on your behalf could help negotiate the price closer to the market value — or they could tell you that your asking price is simply too high.
32. An Agent’s Greatest Contribution Is Often Their Objectivity
Homeowners can become emotionally attached to their properties, and their assumptions about their home’s value may not match the actual market value. In these situations, the agent is often the only person who’s able to articulate why the seller’s assumptions are flawed and suggest a more objective pricing strategy.
Agents can also pinpoint specific home features that could hold back a sale, and communicate them to the seller in a discreet, helpful manner.