To all the agents in the house,
I've been examining the escalating tensions between homebuilders and buyer's agents, including a feature last week about where the friction may lead. After the story came out, Robert Dietz, chief economist for the National Association of Homebuilders reached out. The agent-homebuilder relationship, Dietz said, is a casualty of builders fixated by the shortage and ensuing high-cost of lumber and other materials.
"The source of frustration for builders is trying to manage the supply chain and uncertain deliveries," Dietz said. "Look, every aspect of the housing industry — builders, realtors, mortgage bankers — are constrained by limited supply. So, it's all about ways of trying to bend that cost curve."
Another escalating cost, Dietz contended, was skilled labor.
One way to cut costs is to not pay agents. Forgoing, for example, a 3% commission on a $300,000 new home can shave $9,000. Dietz said his group hasn't studied the decline in agent payments, but that, "Anecdotally, we do hear evidence about non-payments."
Agents like Sandy Williams of eXp in Sarasota contend that their knowledge of the homebuilding process and local interested buyers are invaluable when the market has more supply than demand. "If you're going to treat me like crap during the good times, I'm going to remember you," Williams said in reference to two homebuilders she has recently encountered.
Dietz allowed that agents could have a role. "I think it can be an important part of the process, especially realtors who specialize in new construction," he said.
But the economist kept returning to the building supply chain. For homebuilders, it seems, the paramount jobs of concern are port workers and truck drivers. "It's an uncertain environment," Dietz said — and one where the concerns of agents are, for now, getting short shrift.
Thoughts? Email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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