The real estate industry is witnessing a significant shift with the emergence of paid home showings. This guide explores this new trend from the agent’s and customer’s perspectives, focusing on its benefits and how it’s reshaping the real estate landscape.
Understanding the Shift Toward Paid Showings
Traditionally, real estate agents have conducted home showings as part of their overall services, compensated solely through commissions upon closing a sale. However, the industry is gradually shifting towards a more transparent and equitable model where services are directly compensated.
As Matt Kuchar, CEO of Showami, says, “People will always buy homes. The best agents will find those home buyers in a market shift.” This sentiment underscores the importance of adapting to new industry practices to stay competitive and meet client needs.
- Understanding the Shift Toward Paid Showings
- The Mechanics of Paid Showings
- 5 Benefits of Paid Showings for Agents
- Strategies for Success in Normalizing Paid Showings
- Embracing the New Normal
- Paid Showings from the Customer's Perspective
- What This Means for Home Buyers & Sellers
- Questions to Ask Your Agent
- Conclusion
Several factors are driving this change:
- Time management for busy agents
- Opportunities for newer agents to gain experience
- The need for more flexible and efficient showing schedules
- The rise of technology platforms facilitating paid showings
The Mechanics of Paid Showings
How does paying for showings work? Several models are emerging in the industry:
- Per-Showing Fees: Platforms like Showami allow initiating agents to set rates between $45 and $400 per show. Depending on the selected rate, showing agents can earn between $28 and $367 per showing.
- Hourly Rates: Some agents prefer to compensate showing agents with an hourly rate, typically agreed upon in advance. The average hourly pay for a showing agent can range from $15 to over $50, depending on experience and location.
- Flat Fees: Paying a single price for a set time period of property showings. Which looks like paying $300 for all showings conducted in the month of March for a particular client, no matter how many requests are made.
These flexible compensation models allow for customization based on the specific needs of both the initiating and showing agents.
5 Benefits of Paid Showings for Agents
- Efficient time management: For top-producing agents, paying a showing agent can be more cost-effective than personally conducting all showings. This allows busy agents to focus on other critical aspects of their business, such as lead generation, negotiation, and closing deals.
- Opportunities for new agents: Paid showings provide an excellent opportunity for newer agents to gain valuable experience and build relationships with other agents. It’s a low-pressure way to learn the ropes and build confidence in interacting with potential buyers.
- Increased flexibility: Platforms that facilitate paid showings provide greater flexibility in scheduling. This is particularly beneficial for showings requested on short notice or at inconvenient times, increasing the likelihood of finding an available agent.
- Enhanced client service: Real estate professionals can use showing agents to ensure their clients receive personalized attention during home tours, even when the primary agent is unavailable. This leads to improved client satisfaction and potentially faster sales.
- Cost-effective solution: For high-producing agents, the cost of paying a showing agent is often outweighed by the value of time saved and the ability to focus on high-priority tasks. This is also a good way for an agent to scale their business and test what might work best before hiring another agent.
Strategies for Success in Normalizing Paid Showings
- Educating clients: Inform buyers and sellers about the benefits of paid showings, such as increased availability and flexibility.
- Offering flexible options: Provide clients with different showing options, including traditional agent-led tours and paid showing services.
- Leveraging technology: Utilize user-friendly platforms and apps that make scheduling and paying for showings a seamless experience.
- Affirm your client: Prior to requesting help from another agent. Make sure to double down on YOUR value as an agent and express that these services are an extension of you and that you have their back throughout the home buying/selling process.
- Sharing success stories: Highlight positive experiences and outcomes from paid showings to demonstrate their effectiveness.
- Implementing gradually: Start by completing the first showing yourself, then start leveraging showing agent services afterward.
- Monitoring and adjusting: Gather feedback regularly from clients, showing agents, and your team about the paid showing process to refine and improve your approach.
Embracing the New Normal
For real estate professionals looking to stay ahead of the curve, embracing paid showings as the new normal can offer significant advantages. Start with these steps:
- Research platforms: Explore services like Showami that facilitate paid showings and understand how they work.
- Start small: Use paid showings for a portion of your clients or during hectic periods.
- Gather feedback: Regularly collect and analyze client feedback and continually improve the process.
- Adjust your business model: Consider how you can integrate paid showing into your overall business strategy to maximize efficiency and profitability.
- Stay informed: Keep up with industry trends and best practices related to paid showings to ensure you’re utilizing this tool effectively.
Paid Showings from the Customer’s Perspective
As a potential home buyer or seller, you may have noticed a new trend in the real estate industry: paid showings. This guide explores what this means for you and how it might impact your home buying or selling experience.
What Are Paid Showings?
Traditionally, real estate agents have conducted home showings as part of their overall services, compensated through commissions upon closing a sale. Some agents used to show homes to potential clients without requiring an agency agreement. However, in 2024 a new rule was passed by NAR and state legislators, requiring an agency agreement between the clients and their home-buying representative agency (Real estate agent or attorney). With these changes in place, some home buyers are electing to proceed with touring agreements and opt to pay the agent per-showing, rather than commit to a full agency agreement.
How Paid Showings Work
Several models are emerging in the industry:
- Per-Showing Fees: A fee is charged for each property showing.
- Hourly Rates: Showing agents may be paid an hourly rate for their time.
- Flat Fees: One price covers showings and additional services.
Potential Benefits for Property Buyers
- Increased availability: With more agents available to conduct showings, you may have an easier time scheduling viewings at times convenient for you.
- Flexibility: Paid showings can make it easier to arrange last-minute or off-hours viewings.
- Try before you buy: Pay to tour homes with a number of agents and choose who you feel will best represent you in purchasing a home.
- Potential for cost savings: In some cases, the efficiency of paid showings might lead to overall cost savings in the real estate process.
Potential Challenges and Considerations
- Additional costs: Paid showings may introduce new fees into the home buying or selling process.
- Less personal touch: In some cases, you may interact with multiple agents during the process rather than building a relationship with a single agent.
- Potential for miscommunication: With multiple parties involved, there’s a risk of details being lost in communication.
What This Means for Home Buyers & Sellers
If you’re working with a flat fee or fee-only brokerage:
- Be prepared for potential per-showing fees: Understand the fee structure upfront and budget accordingly.
- Communicate your preferences clearly: With multiple agents potentially involved, it’s crucial to clearly articulate your needs and preferences.
- Request feedback: After each showing, ask for detailed feedback to help inform your decision-making process.
- Understand the full process: Know how communication will work between you, the primary agent, and any showing agents.
If you’re considering a traditional brokerage:
- Ask about their showing policies: Some traditional brokerages may also be adopting paid showing models.
- Find out what’s included: Make sure you know what services are covered in the traditional commission structure.
- Compare options: Consider the pros and cons of different models based on your specific needs and preferences.
Questions to Ask Your Agent
- Do you use paid showings? If so, how does the process work?
- What do you charge for showings? Are the fees included in your commission, or are they separate?
- How do you ensure quality and consistency when using showing agents?
- How do you communicate feedback from the showings?
- Can I choose between having you conduct showings personally or using a showing agent?
Conclusion
The shift towards paid showings represents an evolution in the real estate industry aimed at increasing efficiency and flexibility. This allows agents to optimize time, enhance client service, and boost productivity and profitability. By adopting paid showings, leveraging technology, focusing on client value, and positioning themselves at the forefront of industry innovation, real estate professionals can successfully navigate this change. Paid showings can also help build a sustainable businesses in today’s dynamic market.
As a buyer or seller, it’s important to understand this new model. Its potential impacts on your experience, and how to navigate it effectively. However, by asking the right questions and clearly communicating your needs, you can clarify whether you’re working with a traditional model or a new paid showing system. Your agent will provide the support and service you need in your real estate journey.