It’s an age old question, should real estate agents work with buyers or sellers? Should you be a buyer’s agent or a listing agent? As the conventional wisdom typically goes, successful agents work with sellers and listings, not with buyers. However, this thinking has largely changed for many teams and solo agents, and over the last decade it has become more popular to work with buyers, especially if you’re a new agent.
So, should you buy homes or sell homes? Let’s dive into that question and more. In this article, we’ll cover the following:
If you’re a real estate ISA or agent, then you probably already understand this distinction. In a nutshell, a buyer’s agent is someone who looks out specifically for the best interests of—you guessed it—the buyer. They are the ones helping the buyer find the right house that checks all (or most) of their boxes, shows them houses, and helps negotiate the final deal. Basically, they help the buyer throughout the entire process and have a fiduciary responsibility to represent and support their interests.
A listing agent operates on the other side of the equation. They represent the owner of the property, helps them develop strategic plans for selling it, markets it, gets buyers in the door and to the table, and negotiates with the buyer or buyer’s agent to get the best deal possible for person or party selling the property.
There’s a common perception that the most successful real estate agents are listing agents. For much of real estate history this has been true. Afterall, they’re the ones actually selling a product. What’s more is that the seller side of things is highly scalable. For example, a listing agent can have 30, 40, even 50 active listings at any given time.
For a successful listing agent, the only real limit on how much they can scale is how much administrative and support staff they have. The reason this is true for listing but not necessarily for buyer’s agents is that agents who work with sellers don’t have quite as much physical draws on their time per client.
In other words, listing agents aren’t out there showing houses and taking their clients all around town. If they have the right team and processes in place to administer and market the listing, then they can really focus on negotiating and closing deals for their clients.
The seller side of the real estate business might be more scalable, but it is also very difficult to break into as a new agent. People selling their homes have the perception that they are paying the commission and so they expect more from their agent than many home buyers do. They tend to have higher standards, are pickier about who they choose, and listing clients are generally much more difficult to win as a result.
Buyer clients, on the other hand, tend to be easier to get. For example, when I first started out as an agent, I would maybe convert around 10% of my unmet listing appointments into clients. When I would talk or sit down with unmet buyer leads, that number would be more like 50% or higher. The bar is usually set a little lower, so it’s easier for new agents to get buyer clients.
The question is, however, do you really want to work with buyers? Aren’t they less profitable? Well, the answer is yes and no. Although they may be less profitable at the beginning, because you can’t physically work with as many buyers as you can listings, in the long run, working with home buyers can lead to the following:
The bottom line is that you tend to build more of a deeper relationship with your buyer clients. If you help a family find their dream home or help find a couple their first home, they are going to be extremely grateful to you. That means that when they go to sell, they are going to think of you. It also means that they may become your advocate and tell their friends or family about how great you are once they have to buy or sell their home.
In other words, by working with buyers, it’s typically easier to get clients, you have a better chance at developing long term relationships with those clients, and you’re building up a base of people that you can eventually sell homes for as well. That first time home buyer will move eventually, and when they do, they’ll hopefully think of you.
At the end of the day, whether you choose to focus on buyers or sellers is less important than the fact that you choose to focus on one of them. Hands down, the best way to differentiate yourself and your real estate business is to become an expert in one thing. If you focus on buyers or sellers, the better you’ll become at working with them and the more leads and clients will perceive you as being the expert to work with.
When you’re better and more specialized in a specific area of the business, the client gets more value out of your services (or at least they think they do). People pay premium for highly knowledgeable specialists. If you have a team, then at the very least you need to have one buyer’s agent and one seller’s agent. It is better to have ten people who are each awesome at one thing than have one person who is awesome at ten things.
In practice nowadays, most new agents start with buyers and maybe eventually move to sellers. But the point is, agents and teams can be successful doing either one. The key is to specialize in one area, become amazing at it, and then possibly move on to add more specialists in other areas to grow your team down the road.