Agents of Change: the evolution of real estate relationships
Reading Time — 5 minutes
November 30, 2023
By Nicholas Boniakowski
Reading Time — 5 minutes
November 30, 2023
We’re not aware of a dating app that matches you with a real estate agent. But it might not be very popular, given most agent-client relationships still begin via friends and family – at least that’s what our recent survey of more than 1,000 homebuyers and sellers confirmed. This is just one aspect of real estate that hasn’t significantly changed over the years, along with a couple of others: people still lose sleep over the complexities of the traditional sale, and homeowners say buying is still a major financial stressor.
While these things haven’t changed in real estate, a lot has. Most recently, antitrust suits are calling into question the financial transparency and even the value of industry roles. Technology has ushered in new ways to transact, streamlining the consumer process as many other industries have done over the past decade. And for the first time, digital native generations are becoming home buyers and sellers.
Given all the trends in real estate, we thought it was a good time to take a look at the relationship between real estate agents and clients. In addition to 1,000+ home buyers and sellers, we also surveyed more than 500 agents. The good news? About 90% of consumers are satisfied with their agent. But questions about the agent’s role remain, especially when it comes to listing price, unexpected expenses, and fees and commissions.
The agent-client relationship: consumer’s view
The ubiquity of the internet has finally touched the agent-client relationship. Just as people book a flight, order goods, or hail a ride online, they have come to expect the benefits of a digital world in their real estate experience. In fact, 93% foresee changes in their relationship with agents due to the impact of technology. Here are three key takeaways from our survey:
Finding an agent: The majority (53% of sellers and 48% of buyers) still find their agent via word-of-mouth referrals from friends, family, and co-workers. But sellers who bought a home recently (within the last 5 years) are almost three times more likely to find their agent online than those who bought 5+ years ago (36% v. 13%).
Agent's role: Many of those who sold a home 5+ years ago believe the agent's role may diminish overall, but they would still engage one to buy or sell a home. However, as technology is increasingly integrated into the process, one-third of recent sellers expect agents to become more effective, facilitating more frequent transactions. For example, 6 in 10 sellers believe that virtual showings will reduce the time clients spend at physical showings.
List price: Determining the listing price is the service that sellers mention most often that agents provide (75%), but recent sellers are ~15% less likely to rely on agents for this responsibility. Perhaps that’s because two in five sellers say the most confusing aspect of the agent-client relationship revolves around the listing price —something technology and AI can help standardize. And as online buying and selling platforms have gained popularity, agents refer clients to iBuyers/online real estate websites almost twice as often today as they did five years ago.
As a final insight on the consumer side, here’s a look at what sellers within the last five years rank as the most important services agents provide. A standout for us: 7 in 10 sellers say that an agent's ability to streamline the process is the most important service they provide.
The agent-client relationship: agents’s view
There are over 3 million active real estate licensees in the U.S., making it one of the most popular jobs in the country. Our survey reveals that in general, seller agents believe their roles haven’t significantly changed over the past decade. But agents who are more in tune with client needs are already adapting to changing industry norms that will help them succeed. In the future, for example, 51% of seller agents anticipate dedicating more time to marketing their clients’ homes.
We also see an interesting imbalance between the top reason seller agents believe they’ve been hired versus what clients say is the least beneficial aspect of that relationship.
There was a stark contrast between why seller agents believe they are hired and the benefits a client said they received from the relationship. The top reason (48%) agents believe they are hired or recommended is because they’ve proven to have their client's best interests at heart, but sellers ranked it as the least beneficial aspect of the relationship (30%).
Agent commissions are a hotly debated topic among the industry and consumers, and our survey found that both buyer and seller agents are acutely aware of their impact. Buyer agents ranked their commission as the last reason they believe they are hired or recommended (13%). And seller agents ranked it as the second to last reason (23%), just above their role in minimizing the chances the sale will fall through (23%).
To make the agent-client relationship as fruitful as possible for both sides, agents ranked the top actions they wish their clients would take:
Regardless of how the role of the agent may change in the future, it’s abundantly clear there is a place for agents in real estate. The key question will be how their role adapts to the evolving expectations of consumers.
Nick Boniakowski is the Head of Agent Partnerships at Opendoor.
Methodology: The Opendoor survey was conducted online by Strategence in October 2023 among 1,064 nationally representative respondents ages 27-75 who worked with an agent to buy or sell a home. For the purposes of this report, Millennials are defined as ages 27-42, Gen Xers are defined as ages 43-58, and Baby Boomers are defined as ages 59-75. Opendoor conducts ongoing industry studies and interviewed 500+ agents in the most recent wave, which was analyzed by Strategence.