YFP 395: What to Look for in a Real Estate Agent (And Why It’s More Important Than Ever)

Tim Ulbrich & Nate Hedrick break down 2025 housing trends, agent tips & the new buyer’s agreement.

This is brought to you by Real Estate RPH.

Episode Summary

Tim Ulbrich, YFP Co-Founder talks with Nate Hedrick, PharmD and Founder of Real Estate RPh as they break down the key trends shaping the 2025 housing market, from declining home sales to soaring interest rates. Nate shares what to look for in a real estate agent, why local market expertise matters, and how the new buyer’s agent agreement affects you.

Key Points from the Episode

• [00:00] Welcome Back, Nate Hedrick, PharmD!
• [00:44] Current Housing Market Trends
• [02:37] Home Improvement Decisions
• [03:49] Hiring a Real Estate Agent
• [04:07] Understanding Buyer’s Agent Agreements
• [06:36] Key Qualities in a Real Estate Agent
• [07:49] Researching and Interviewing Agents
• [11:03] Local Market Knowledge
• [15:17] Communication Expectations
• [16:51] Buyer’s Agent Agreement Details
• [18:57] Changes in Buyer’s Agent Compensation
• [19:37] Negotiating Buyer’s Agent Fees
• [20:17] Impact on First-Time Homebuyers
• [20:52] New Agreement Structures
• [22:02] Alternative Fee Models
• [27:25] Important Contract Details
• [31:42] When to Start Looking for an Agent
• [33:14] Real Estate Concierge Service

Episode Highlights

“And let’s not forget..it’s a low bar of entry right into the field. And because of that, not all agents are created equal.” – Tim Ulbrich [05:41]

“ I would recommend knowing what your goal is and what your specific kind of target is.  If I am an investor buying an investment property, that’s a very different agent. If I am looking for a farm with  a hundred acres and a 10 horse horse  stall, like that’s a different agent. If I’m looking for an apartment in New York city, like that’s a different type of agent.” – Nate Hedrick [06:50:]

“ Typically I recommend three to six months before you think you’re sort of ready to buy a house. If your lease is running out in June, then January or February is your time to start talking with agents and start that process.” – Nate Hedrick [31:58:]

“A good real estate agent can be an important, not just team member, but the quarterback of the team.” -Nate Hedrick [33:00]

Links Mentioned in Today’s Episode

• YFP YouTube Channel
• YFP Real Estate Investing 132: Rent vs Buy
• YFP Real Estate Investing 118: Navigating the NAR News: Insights for Real Estate Investors
• YFP Episode 160: Navigating the Home Buying Process Through the Home Buying Concierge Service
• Real Estate RPh Home Buying Concierge
• YFP Real Estate Investing Facebook Group
• Nate Hedrick on Instagram
• Nate Hedrick on LinkedIn
• Tim Ulbrich on LinkedIn
• YFP on Instagram
• YFP Facebook Group
• Subscribe to the YFP Newsletter
• YFP Disclaimer

Episode Transcript

Tim Ulbrich: Nate, welcome back to the show.

Nate Hedrick: Hey, Tim, always good to be here.

Tim Ulbrich: Well, we had you and David on REI real estate investing episode one 32, we talked about rent versus buy. Not a new conversation, but one that is relevant in today’s market and how today’s market might ship that conversation a little bit.

We’ll link to that episode in the show notes in case folks miss that. But today we’re talking about what to look for when hiring a real estate agent. And similar to our last episode, while we’ve touched on this periodically, there are some new things in the market related to, uh, buyers agreements and other things that we need to talk about that really are shifting this conversation a bit.

So we’re going to do that, but first let’s get your take Nate on kind of what’s happening in [00:01:00] the housing market in 2025. You know, if anyone’s been watching the news on this existing home sales. You know, fell again last year to lowest level since 1995, interest rates continuing to stay pretty high where they’ve been.

And people like you and I are saying, Hey, there ain’t no way we’re moving. And we’re not giving up the interest rate. We’ve had all of that contributing to what appears to be an ongoing challenging market for first time homebuyers. Right.

Nate Hedrick: Yeah, I, a lot going on just in the last 12 months and even in the short term, just in the last couple of weeks. Um, I’ll say all of this with the caveat that all real estate is local, right? So I might give a global trend or a local insight into. Cleveland, Ohio market that doesn’t apply to you, right?

Because it’s all going to be specific to your locale. Um, so that’s, that’s important to keep in mind that none of this stuff applies globally everywhere. It’s just sort of what we’re seeing in terms of trended data. So as you mentioned, we did see a new sales, new existing home sales, rather existing home sales.

[00:02:00] Um, and a lot of that analysts feel like was because of the rising interest rates, it reduced the amount of affordability that was out there. Um, if your interest rate goes up, that means your monthly payment goes up, which means you can’t afford as much house, which means, Hey, if I need a four bedroom because my family size is X and how I’m priced out of a four bedroom, like, My only choice might be to rent now.

Right. Um, so we saw a lot of that. The other thing, like you said, so astutely is just, we’re not moving, right? If you’ve got a sub 4 percent rate and you go to sell that property, your only option is to then go buy something that is. Either cash or above seven and a half percent. Right. Depending on the time that you were buying.

So a lot of people felt like, Whoa, I’m just going to put the brakes on, on moving and I’m just going to stay where I’m at. And so those existing homes kind of just sat there and didn’t move as much.

Tim Ulbrich: And I think what you’re seeing, Nate, which both you and I can attest to in our own situations and the pandemic really spurred this, but it’s continued as people saying, Hey, I’m not going to move. Maybe I was considering, I’m not going to move, [00:03:00] but I’m going to make improvements and updates to our house.

You know, we finished our basement this past year. We had talked about moving a year or so ago and decided, you know, what. Interest rates are what they are. And, and we had a much lower rate, mathematically doesn’t make sense. Let’s kind of focus on some improvements on the house. And just before we hit record, I heard the hammer in the background, right on your house.

So you’re, you’re doing something similar.

Nate Hedrick: Yeah. We, we, we basically have been talking about this for years and kind of this past. Within the last year, my wife and I sat down and said, look, I, I think this is it. I don’t think we’re moving. We’re pretty locked into this house. We love our location. We love where the kids are at. We love access. We have all the amenities we have here in our particular spot.

And so we said, let’s, let’s put on the sunroom. We’ve always talked about doing like, let’s just, let’s be here. And so, like you said, it just, if we wanted this exact property somewhere else, it’d be one, it’d be really hard to find and to pay an absolute ton for it somewhere else. So just make the improvements you want here and enjoy it while we’re here.

Tim Ulbrich: Yeah. Great [00:04:00] stuff. Well, today’s topic, what to look for when hiring an agent, again, not a new topic, but is. Updated information that we have to talk about. We’re going to get more in the weeds on this, but really the piece here that’s new is the implementation of a buyer’s agent agreement. So Nate, at a high level, kind of tell us why this new wrinkle has thrown a new factor into the equation for people to think about when they’re looking at hiring an agent.

Nate Hedrick: Yeah, I don’t want to get too deep yet. Let’s dive in as we kind of get through the pieces. But to, to, to set the 10, 000 foot stage, there was a settlement last year. We had an episode on this. Actually, um, the NAR settled on a lawsuit that was, that was pending. Um, they basically said we want it. Buyer representation to be very transparent, uh, by that extension or because of that ruling, um, the national association of realtors said, okay, before you work with a buyer’s agent, you have to have a contract in place that says what that buyer’s agent is going to be paid.[00:05:00] 

And that compensation is going to be provided in a very clear laid out fashion. Um, again, we’ll go through some of the specifics, but in most cases, what those terms of those agreements say is that the buyer is agreeing to pay. Their agent, typically they’re going to try to get that amount from the seller as a, as a contingency of, of purchasing the home.

But technically the buyer is on the hook and they’ve sort of always been on the hook, but this is really laying it out to say, look, before we start working together, this is the contract. You have the sign that says how much I’m going to get paid. And that’s a very big difference from where it was years and years ago.

Tim Ulbrich: Yeah. And as you and I were planning for this episode, we said, Hey, Hey, these pieces now. Really raise the bar for this decision of hiring an agent. I mean, it’s always been important, but now we’re talking about signed agreements need to be in place, potentially financial implications on the buy side, if we can’t get the seller to take care of it.

And let’s not forget no offense to, uh, the real estate agents that are out there. Uh, but Nate, it’s a low bar of entry right into the [00:06:00] field. And because of that, not all agents are created equal. And we’re talking about what that means, but all the more reason that. On the buy side, we’ve got to be doing our homework and first time homebuyers.

Inevitably you’re excited about the home you’re looking. And this is where it’s like, Hey, aunt Susie’s third cousin’s neighbor is a good agent. You should work with them. And, and, you know, I remember being a first time homebuyer. We kind of run in that direction. That’s how I got connected to our agent, which thankfully worked out, but it wasn’t the best homework that we did in that process.

So. All the reasons we’ll, we’ll get into it during the episode of, Hey, as the buyer, what responsibilities do you have and looking for an agent? What are some of those things that you should be looking for to make sure you got someone in your corner, that’s really going to help you through this process.

So let, let’s start there. Nate, as I, as I mentioned, not all agents are created equal. So if that’s the case, what are some of the key qualities or traits that home buyers should be looking for when hiring an agent?

Nate Hedrick: Yeah, I think you could go down a bunch of different paths here. Um, I think [00:07:00] to start where I would recommend is know what your goal is and know what your specific kind of target is, right? So let me explain. If I am an investor buying an investment property, that’s a very different agent. If I am looking for a farm with a hundred acres and a 10 horse horse stall, like that’s a different agent.

If I’m looking for an apartment in New York city, like that’s a different type of agent. Right? So first start with what your goals are. Like if it’s just single family home in the suburbs, you have a bunch broader pool of people to be looking at. If you are looking for a specialized target, like. That that’s narrows your pool of options as kind of a first step.

Tim Ulbrich: Yeah. And I think that to your point, right. If someone’s looking at. A commercial property versus a residential. Is this an investment property that they’re thinking about doing Airbnb? And, and does that agent understand some of the local rules and regulations? Right? So start with the vision, start with the goal.

And then from there, what else are we thinking about on more of a micro level?

Nate Hedrick: [00:08:00] Yeah. So that’s where I would recommend you go out and you do kind of a background Google search, right? Or you’ve got great access to online information about these agents. You can get a good feel for something like transaction volume. You can figure out if they’re on a team. Um, if you look up their Zillow profile, their realtor.

com profile, you can see like, is it just Nate working as an agent by himself or does Nate have a team of people that I might be working with? And there, there are pros and cons to that. But if you set aside and you’re like, no, I want my guy or gal and I only want to work with that person. And that’s the way I want to operate.

Like you can do that background research without ever having to interview an agent that’s on a team or vice versa, right? You want someone that’s available all the time. Great. If you have a team of people, then you’re always guaranteeing somebody’s around. So you can do a lot of that background research to see things like that.

I also encourage people to look at agents, Facebook posts, their Instagram. Uh, I personally am and kind of terrible about being on social media, but you can get a pretty good feel for an agent’s style, their personality, their, how [00:09:00] they list a property. Um, a lot of agents will have walkthrough videos of their listings and you can feel out that person without ever having to interact with them, which is, which is nice, right?

You can just kind of start that book from. The very beginning without having to, to make a bunch of extra phone calls, interview a bunch of extra agents. You can, you can weed people right out over the internet.

Tim Ulbrich: Yeah. And I was joking, half joking about the referral, right? I mean, referrals matter and if people have a good experience, that’s great. But I, what I’m encouraging people to do is not stop there. Right. And what other information can we gather about that agent to understand, you know, whether or not they’re a good fit in our industry, in the financial planning industry for a firm like ours, that’s regulated by the sec, you know, a lot of this information is publicly available that people can look up.

You know, if they, if they want to read pages and pages of documents, they can read up forms that we have to publish in terms of services that we offer and fees that we have. And if there’s things like marks against or complaints against a firm or an advisor, you know, you can get to that information as well.

[00:10:00] Is there something similar that’s out there or what are these sources look like in terms of checking an agent’s experience in history?

Nate Hedrick: Yes. And no, um, a good agent will have a good review system somewhere, right? They’ll have either on their website or on Google reviews, realtor. com, Zillow reviews. One of those, hopefully if they’re a seasoned agent is going to have some sort of review system, um, where you can look at their actual reviews of their service.

Right. And if they’ve got. 20 people in the last year that have bought and sold a home and went on and left a glowing recommendation on Google. Like that’s a better indicator, uh, than, than if you don’t have anything out there. Right. Um, so that’s sort of one, you could also go to the national association of realtors website.

Um, you can actually dial down by your state. So like we have the Ohio realtors board and you can see if there’s been a complaint lodged against that particular agent or whatever. Um, it’s pretty rare to have that and have that agent be actively practicing, but. It might be worth looking up, um, and then ultimately you can just Google that individual, see if something’s come up, especially in [00:11:00] like the higher profile cases, you might see something where there’s an article published about somebody that, that maybe it’s, you know, good or bad, and you can kind of get a good feel for that.

So while there’s no national database that you can easily reference, there’s a lot of source material out there for you to go after.

Tim Ulbrich: One thing you said a little bit earlier to Nate, which is worth going back here is, is the importance of understanding the local market. And, you know, as we talked about on the real estate investing one 32 show, it’s not just the city or even the suburb or the area it’s, it’s, it’s the markets within the market, right?

It’s the school district, it’s the neighborhood. So what advice would you have for. Buyers that are out there to find an agent that really understands their market. Especially like I think about Jess and I, like, we’re not from Columbus and we’re looking for a home. Like I’m really leaning on that agent to help us out 

Nate Hedrick: This is where the actual like agent interview might come into play. So again, you’ve done this sort of background research, you’ve narrowed it down. You can see that I have sold a bunch of homes in, you know, this particular city or this particular suburb. So now you’re going to add me to your [00:12:00] list of potential interview targets.

And, and I think a lot of people get like, Either overwhelmed or just turned off by this part of like, I have to set up like three interviews with three agents. Like that sounds like a lot of work. It can absolutely be worthwhile, right? This is a step that is a bit of a pain, but doing it now, we’ll make sure that you have a good process throughout.

And this is a huge purchase. Like you don’t want to get it wrong. So When you get that list, right, you’ve narrowed it down to two or three or four agents, whatever it might be, actually interview them, ask them questions about the local market. If they’re like, Oh, uh, yeah, there’s a, uh, I think there’s an apartment going in somewhere or like, you know, if they’re pretty unknowledgeable about the area, it’s going to come out pretty quickly.

Uh, if they understand it inside and out, you’re going to be able to hear and understand that right over the phone. So it’s something I recommend doing. Um, ask them questions about the local market, ask them about their experience. You can ask them for references, say, Hey, would you be if, and if your clients are willing, would you be willing to send me, you know, three people you’ve worked with and, and their contact info.

So I can just ask them how you were, um, [00:13:00] agents should be willing to give you this kind of stuff if their clients will allow it, of course, but, but they should be willing to give you this kind of stuff to support the fact that they are someone that’s good to work with.

Tim Ulbrich: Yeah. And they, just as you were talking, I was thinking about and jotting out some notes of things that just since living here. You know, we’ve come to understand that I probably could ask better questions about upfront, you know, school districts probably is the obvious one, but like in our neighborhood, we have this notorious issue with, we’re a smaller community.

And so where we draw water from, like, it’s really hard water and it just beats on your appliances. You better be ready for like costs associated with, uh, you know, appliances and soft water tanks and things like that. And everyone in the neighborhood knows it, but the buyer doesn’t know it. Right. Coming into the neighborhood.

I think about some of the HOA. Types of rules and specifics. And every HOA is different in terms of like, do they actually uphold the rules? Do they not? What does that look like? What are the fees? And that stuff, easy to find, you know, property taxes. Like we’re on the line of Franklin County, which is where [00:14:00] Columbus is and Pickaway County.

Well, if you throw a stone, like, and you’re in Pickaway County, property taxes are a whole lot different than they are in Franklin County. Right? So these are the things, what’s the economic development going on in the area? What’s the growth and population look like? I mean, so many things that a good agent.

Proactively hope is getting out in front and supporting you in that way.

Nate Hedrick: you can even ask them. Uh, I kind of like this question. I’ve, I’ve done this before with clients where you ask, you can ask the agent, um, you know, anything going on with city council, I should be aware of. And if they look at you like with deer in the headlights, right, that, that might be a bad sign. They should be involved in the community in some fashion.

Now, again, can I be involved in every single community around all of Cleveland where I start? No, but if you’re really specifically looking at like, Hey, I want to be in Brecksville, Ohio, or, you know, pick a spot, like Then you better know the nuances of that specific location. Uh, and what’s coming, right? If there’s a new trail going in, if they’re going to be rebuilding the bridge that you’re accessing your house from, right.

And you’ve got to go around an extra five miles for the next two years. Like those are the kinds of things you really want to have [00:15:00] an insight to.

Tim Ulbrich: Yeah. Nate is a first time homebuyer. Maybe you can relate to this. If somebody would have told me those things, I’ve been like, yeah, yeah, whatever. It’ll be fine. Right. But those are the things like, I think about the Metro parks and how we use the Metro park, like these things matter day to day in terms of quality of life and, and how you’re interacting with your community.

Nate, one other thing I want to ask you about here with this idea of interviewing agents, love this idea. Um, and I think we should have a similar conversation when it comes to like lenders, interviewing lenders and getting a feel. For what’s a good fit there, but how about communication? You know, what, what conversation, what questions can people ask?

I know first time home buyers, right. They’re eager. They want responsiveness. What’s reasonable. What’s not reasonable. How, how can you guide our listeners as an agent of maybe what buyers should be thinking about or think about asking an agent around communication?

Nate Hedrick: Yeah. I think setting a stage of like, what is realistic? So what are you looking for? Right? If someone came to me and said, look, I expect you to be answering a text message within five minutes from 7 a. m. to 10 p. m. I’m like, [00:16:00] I might not be the agent for you. Like I’m going to be with other clients. I have responsibilities.

I have kids like I’m going to get back to you in a reasonable amount of time, but, but this is what it looks like. So I think asking questions, knowing what your expectations are and just. Delivering that to the Asian and saying, Hey, here’s what I would like. I prefer to communicate via text or I prefer an email.

I really like a weekly phone call to understand where we are. If you can set that up with the Asian and they say, yeah, that’s absolutely reasonable. That works well with me. Or you know what? Like. That’s not how I operate. That’s how you’re going to get good communication. I don’t think it’s just coming at them and saying, do you have good communication skills?

And they’re like, yes, I do. Uh, because everyone’s going to say that you have to kind of make it a two way street of like, here’s how I expect to communicate. How’s that going to work?

Tim Ulbrich: Yeah, especially in this market, right? Timely communication, really important. So clear expectations upfront, what specific communication modalities, expectations around hours and timeline of responsiveness, all really important. All right, let’s talk about that buyer’s agent [00:17:00] agreement in more detail, because this is the new rankle.

As we talked about the beginning, really heightens the pressure on the buyer to make sure they have an agent that’s the right fit. As you mentioned the, the backstory for this, and we’ll link to it, it was episode one 18 of the Real Estate Investing podcast that you and David talked about the settlement from the National Association of Realtors.

We don’t have to get into the whole weeds of, of that all again. Uh, but that really led to this implementation of a buyer’s agreement that if anyone’s listening and bought a home, let’s say what? Eight months ago or yeah, since August. So anytime before that, you’re like, what buyers agreement, right? This wasn’t a thing.

So tell us a little bit more about what that looks like practically right now. So if I’m a first time home buyer or perspective, first time home buyer listening, and I’m starting to search, what should I expect in terms of these agreements and what the intent is of those agreements?

Nate Hedrick: Yeah. And it’s funny. I actually just went through this conversation earlier this morning. So like this is super relevant to what we go through every single [00:18:00] day. Um, but essentially what has changed is that before you can look at homes with a particular agent, they are supposed to have supposed to have a buyer’s agency agreement in place.

They basically says, I am going to be representing you. Here are the terms of that representation. Here are all the things that I’m going to do for you. Here is how I’m going to represent you when I’m talking to other agents. Here’s how I’m going to represent you to potential sellers. So on and so forth, right?

It lays that all out for my efforts. My compensation is X. And for the point of this conversation, let’s just say it’s 3%. Okay. I’m going to make 3 percent on the, as a percentage of the home sale. So if the house sells for 500, 000, I’m making 3 percent of that. If it sells for 200, 000, I’m making 3 percent of that, whatever it is.

And we’re going to establish that that is the, that is the amount that I’m going to be compensated. Now, where we get that from is up for negotiation. And that’s the big, the big nuance, the big difference from what it used to be. It used to be that the sellers would just offer whatever they were going to offer.

When you got a listing agreement in [00:19:00] place, you negotiated right then and there with the seller. Hey, it’s going to be two and a half for me, two and a half for a buyer’s agent. And when I would go show a listing, I would know it would actually display it. It would say, Nate, if you help a buyer by this house, you’re going to get two and a half percent, right?

It was listed right there. That is gone. There is no buyers. Uh, agreement that’s listed or advertised by a seller. Now, when I go to make an offer, and again, I just did this today with a client, uh, actually last night. And we said, look, here’s the offer. It’s 250, 000 in a 3 percent buyer’s agency.

Compensation agreement, right? And so that, that 3%, we pre established that that’s what I was going to work with the buyer for. And now we’re trying to get it from the seller. Interestingly enough, again, since this is, this is happening right, right here now with this client that I’m working with, they came back and they said, okay, we’re going to counter and we’re countering at this, this slightly higher number than what you’ve, what you’ve come up with.

And we’re only willing to pay two and a half percent of your buyer’s agency contract. And we said, okay, let’s talk about that. And so I went back to the [00:20:00] buyer and, uh, Ultimately, what we decided was that that’s fine. We’re going to take two and a half from the seller and that 0. 5 percent is actually going to come from my buyer.

And they’re going to, they’re going to pay that out of their closing costs. Um, but all of it is very transparent. All of it is very negotiated. Um, and that’s just how the agreements work now. So you’ve got to establish that before you ever look at houses, which is just way different than it ever used to be.

Tim Ulbrich: So different, right? I mean, days gone by quick recap, days gone by seller’s going to pay all the fees. So you were expecting as a seller, it’s going to cost me five or 6%. Right. And I’m paying for both the listing agent and I’m paying for the home buyer’s fee. It’s going to come out of that. So first time for the home, any home buyer, but first time home buyers, especially where we think about money available for things like a down payment, closing costs, things like this, they weren’t thinking about this fee.

Okay. On the front end. And so now we have this new piece, which is, Hey, we have to have an agreement upfront. It’s going to clearly outline what the buyer’s agent fee is that can no longer be on the listing. And the hope is we can negotiate [00:21:00] that from the seller, but I’m guessing you can tell us more here in a moment that, Hey, there’s going to be variances of this.

And depending on the market, there may or may not be more pushback. Right from the, the seller on this. So is this what you’re seeing? Like, are you expecting more of this? Like what you just had yesterday where, Hey, the seller is still going to kind of like days gone by pay for most of it, but we’re going to negotiate a little bit of that and now we got to put that on the buyer.

Nate Hedrick: Yeah. I think, I think this will be kind of the norm. I think you’ll see just more nuance to it of like, you know, let’s push back a little bit. Let’s adjust this number here. I’ve had some competitive bids where, uh, you know, there’s a lot of bids going into a house and the buyer’s compensation that the seller, that that was being.

Requested kept dropping, right? It’s, Oh, it’s only 1 percent for this offer. And ultimately it’s all money. Like if we take a step back, right, this was all baked in, even in the old way, it was all baked into the purchase agreement, right? If you were paying a 6 percent commission on a listing, like that was baked into the price.

Now it’s just very out in the open and it’s part of the negotiation. So it’s not [00:22:00] like it’s actually changed. It’s not actually more dollars out of the buyer’s pocket necessarily. It’s just out in the open and it’s a fully negotiated point.

Tim Ulbrich: Yeah. So if we just put some numbers to this, Nate, if we think about a 300, 000 home. Let’s say a typical buyer agent, I know some might be a little bit lower, but let’s say a typical buyer agent says, Hey, my fee is going to be 3 percent to you. First time home buyer. So if we get the home for 300, 000, that 3 percent would be 9, 000.

Now, if we can get that all from the seller, great. Nothing out of pocket, but if we can’t, let’s say the seller extreme circumstances, not nothing it’s on you. The buyer’s got to come up with 9, 000, or if it’s a variation. Like the one you just gave two and a half percent. Most of it would come from the seller.

And then a little bit is going to have to come out a pocket from the buyer. Do you, do you think most, I guess we’re assuming all agents are following the rules. Let’s start there,

Nate Hedrick: I hope so. God.

Tim Ulbrich: Yeah. But do you think a lot of agents in the instance you just gave where the seller says, Hey, we’ll do two and a half percent.

Um, that’s, that’s what [00:23:00] we’re going to negotiate. Do you think most agents are going to hold the line on their 3 percent fee and put that remaining point on the buyer? Or do you think people will start to discount? Their fees to not have the buyer. Can they do that

Nate Hedrick: So yeah, I think, so it’s, it’s, well, the, the, can you do it is very broker specific. So, so if you, if you kind of take one step back right behind me, like ultimately I’m representing my broker, right? So they’re actually the one that’s being paid when we close and then they give me a chunk of that payment.

So that 9, 000 or whatever we get, that actually, it goes to my brokerage office, first title office sends it to them. And then I have a contract with my broker for what my compensation from them is. I can only do so much in terms of like, well, just make it 1%. Like the broker is actually establishing these negotiated fees so that they can run a business, right?

It’s just part of, part of how that works. So that’s kind of part one. Um, there is, there is some adjustment that can take place. You could absolutely go back and say, you know what? Let’s renegotiate this. Everybody’s drawn a hard line in the sand that says that 0. 5 percent is going to be a deal breaker.

Like, okay, maybe we can work this out and waive some of the [00:24:00] compensation. Um, I think the risk for agents out there that is, is you could just start to dilute. You know, your work down so far that it’s not worth doing

Tim Ulbrich: the bottom. Yep.

Nate Hedrick: exactly. Um, so I think, I think it’s, there’s a lot of, of nuance to it. Um, but I do think we’ll see this continue where you’ll get this kind of negotiation on that, on that one to 0.

5 percent piece, uh, every single time.

Tim Ulbrich: One of the other things we hypothesized when we discussed this back in the summer was would this, or would this not disrupt the traditional. Right? So you, you gave the example of it’s a, it’s a percentage, right? Whether it’s a 300, 000, our home or 500, 000, our home, let’s say it’s 3%. Obviously that that’s very different dollars, right?

We’re talking about 9, 000 versus 15, 000 in that instance. Um, so we, we, we wondered, would we see a transformation to alternative fee structures, flat fee models, some hybrid things that might be out there. Are we seeing that or not yet?

Nate Hedrick: Absolutely. Yeah. They’re out there for sure. And, and we’ll even [00:25:00] 3 percent up to a certain cap or, you know, there’s ways to get around it, um, and, and make it more flexible because you’re right there, there. even in the old days, right? So, so higher end listings and higher end for Ohio, right? Like in like the 800, 900 million range that that’s higher end for Ohio.

Um, you would see that, that fee get diluted where, okay, it’s 3 percent up to 500, 000. Then it’s 2 percent of the next 200, 000 and 1 percent after that. So that you would see that fee come down as, as price points got higher anyway. Um, so yeah, I’m seeing people that are putting caps out there. I’m seeing people that are dropping their percentage based on it.

Purchase price. Um, I’m seeing, um, I’ve only seen a few of these and they’re not really taking off, which I think is interesting where people will do like a flat fee where it’s like, Hey, look, I am 1, 500 to negotiate a contract and I’m a thousand dollars per 10 showings or whatever the number is. Right.

And you can just agree to that upfront. And every time we hit 10 showings, you get, you’re going to pay me 2, 000 or a thousand dollars cash. And we’ll, you know, and it goes to my [00:26:00] broker. We figure all that out. So like there’s ways people are getting creative. I think that’s Not taking off yet, but I could see a world in which like someone looks at that and goes, that for me is what I want.

I want this a la carte option. I’m going to go with this person.

Tim Ulbrich: here’s my theory for why that’s not taking off Nate. And you can tell me if I’m wrong, cause you’ve got a lot more experience than I do is because so many first time homebuyers in today’s market may go searching and actually not find something. I don’t know if they’re willing to incur the costs to be empty handed at the end of it.

Right. Because the way the agreements are structured it with, with a 3 percent model, we got to get to the finish line before a fee is paid. Yeah. And now I would argue if I’m an agent, I’m doing work. I could show somebody 10 homes. And if they come up empty handed, like that’s unfortunate, but I just spent a lot of time showing them 10 homes and hopefully we’re doing it well.

And it takes an investment of time. So I can see both sides of the coin and the story, but I, I would guess in a different market than we’re in, that might take off a little bit more. But, uh, I, I [00:27:00] suspect many people might think about, Hey, I could spend a thousand dollars going to see homes. And then actually, actually don’t ever end up getting one for whatever reason.

Maybe there isn’t, isn’t enough inventory or they just change your mind. Right.

Nate Hedrick: no, I think you’re right. I think that’s probably, that’s probably right. I think that that may start to shift if, if people change their mind or if inventory changes, like you said, or if it becomes more of a buyer’s market, um, that may start to change, but you’re right. You could go to 10 showings, put in 10 offers and still get nothing because you know, the housing market’s crazy and you’re getting beat out on offers.

Right. So yeah, I, I totally see that.

Tim Ulbrich: We’ve talked a little bit about this, but I want to pick your brain some more. This, this to me adds a new layer of attention to detail that’s needed that I’m not sure if I think back to my first time home by herself and in 2009, come out of residency, like. Give me the documents. I’m signing the papers.

We’re buying the home, right? I don’t know how much I’m reading the details of it, but what’s in this agreement now, I think is really important information, right? So what should people be looking for in [00:28:00] terms of, of course, read it, but are there specific parts of these agreements or things that may vary from one agent, one broker to another, that, that might help them determine what’s a good fit?

Nate Hedrick: There are a few. Yeah. So the first one is to look for, uh, the actual compensation and how that’s delivered. Right. So, um, is it delivered at closing? Like, is it delivered, uh, you know, even if you don’t close on the house, like, so I’ve, I’ve seen agreements out there and we don’t do this, but I’ve seen agreements out there where if you bring a willing and able buyer and you.

They back out for a non contract reason. Maybe we get to five days before closing and you get cold feet and you’re just like, look, Nate, I can’t like I can’t. It’s too much. I’m done. They can have my earnest money. I don’t care. There are contracts that are built. I’ve seen these out there where the agent still gets paid legally.

They should get a compensation of 3 percent or whatever. for that deal because they brought a willing and able buyer. They were ready to close on house. The seller was ready to close and you screwed it up, right? So watch for language like that, that says how that payment is made and when, right? [00:29:00] Super important.

Um, also look for how you can get out of these agreements, right? So it’s a lot of stress to say, Hey, I want to agree to work with Nate or whoever, um, for six months, let’s say under a, an agency agreement, right? Whoa, I’m not sure I’m ready to commit. How do I get out of that? So our contract, our standard language in our contract is that if you notify me within 72 hours, like we’re done, only the houses that I showed you, are we, are we responsible for?

So I can’t like show you one, two, three main street. You write me a letter, say, Nate, we’re done. And then you go to the seller directly. Right? If I’ve showed you the house, we’re, we’re together on that. But if you were like, Nate, it’s not working out like this is how you can walk away. So look for what that walk away language looks like and make sure that you’re comfortable with it.

So those are the big ones that I, that I think can, can try to trip people up. Um, and then also look for the last pieces where that compensation is coming from. So again, the goal is to get it from the seller. Um, but it should be listed pretty explicitly in the contract that that is the goal. The way our, our contract is written, uh, it basically says [00:30:00] like we are trying to get this from the, the goal is to make this a piece of the commission or the piece of the compensation from the seller.

Uh, the goal is not to make the buyer just pay for it out of pocket. So I think that language is important to have in there just so you can be, make sure that the goals are aligned with, with what your goals are.

Tim Ulbrich: The time piece is really interesting, Nate, and I’m connecting some dots. Now I had a conversation with a connection through one of my boys baseball last summer that was bemoaning a, uh, by this must’ve been actually right after the implementation, probably late summer, early fall, uh, was bemoaning this relationship he was in.

I think he said a year. Um, and it’s just a really good example of the 72 hours, right? Makes sense. Whatever you showed them. There should be a, an agreement and understanding for it, but there also should be an opportunity to change relationship, change. Maybe it’s not a good fit. We thought it was a good fit, whatever might be the case.

And man, you don’t want to be tied up long term if you don’t have to. So I don’t know, maybe there will be some rules and stuff that come around that a while, but that to me [00:31:00] seems really a long, a year.

Nate Hedrick: Yeah. I think that typically what I’ll see is, and you’ll see this, you have like listing agreements, right? So it’s the same idea. Uh, and this has always been the case. This has been the case for years. If I list a home and I have 25 people that see it in a six month period, well, you can’t. And the listing agreement on January 1st and then on January 3rd, except an offer from one of the people that, that saw the house.

I get like six months after that. Anybody that saw the house, if I can prove that they saw the house when I was the one that’s trying to show it, then I’m, I’m due compensation. That’s always been there. And so I think that’s pretty similar. Hopefully that person wasn’t actually locked up to that agent for a year.

They were just locked to the listings they saw, but perhaps, I mean, that could be out there.

Tim Ulbrich: Oh yeah, that’s true. That might’ve been it. Hopefully, uh, he was not happy. I remember that.

Nate Hedrick: I can, I can imagine. That sounds awful.

Tim Ulbrich: So Nate, I’m a prospective homebuyer listening, um, you know, um, I want to be in this crazy market at some point, maybe in the spring or summer, when is a good time to be thinking about looking for an [00:32:00] agent to begin that, that home buying search, that home buying journey.

Nate Hedrick: Typically I recommend three to six months before you think you’re sort of ready to buy a house. Like if you can see yourself, if your lease is running out in June, January or February is your time to start talking with agents and start that process. Um, just to kind of work backward, right? Like if you have a goal of like, Hey, we want to be moved in by.

The fall for the school district. Typically, you’re going to have a 30 to 40 day closing, right? So you got to work backward from that. And then you could have anywhere from a week to five months of looking for a house, right? It depends on your market and what the kind of averages are. So building in that.

three to six month window, make sure that you have a pretty good chance at getting everything done in time. Um, longer than that, if you’re, if you’re a year away, you’re probably looking too early. Interest rates are going to change. The market’s going to change. Um, you’re just going to be wasting you and your agent’s time if you’re looking at that stage, but that three to six month window tends to be kind of the sweet spot.

If I, if I, [00:33:00] based on my experience.

Tim Ulbrich: Yeah, Nate, as we’ve talked about before on this podcast and in other webinars, like the, the, a good real estate agent can, can be an important, not just team member, but the quarterback of the team, right? There’s a lot of questions that can come, uh, in the home buying process and that individual, especially with good experience can help you navigate a lot of those.

So we really believe this is one of the first puzzle pieces of the puzzle, not the first piece of the puzzle that we have to put in place, which is a good segue in to talking about the real estate RPH concierge service. Many of our listeners, if they’ve, if they’ve heard the show before, know that we’ve had the opportunity to partner with you now, five years, six years, seven years, and, uh, we, we love what you have done to help pharmacists, home buyers all across the country.

And you’ve actually had on a couple of previous buyers that have worked with you on the show, and we’ll link to those episodes in the show notes. If people want to get a feel for what that is all about, whether someone lives in Cleveland, in your backyard, in my backyard, in Columbus. Tulsa, Oklahoma, you name it across [00:34:00] the country.

The goal of the concierge service is to get them connected with a local agent that is a good fit, not only a good fit in that agent relationship with that buyer, but that also then has you in their corner and with them along the process, uh, throughout the home buying journey to help hold their hands.

So tell us more about that concierge service, whether it’s a first time home buyer, second time home buyer. Investor. It applies across the board.

Nate Hedrick: Yeah, I mean, you nailed it. The goal is really take the guesswork out of this process, right? We’re talking about all these interviews. We’re talking about it. It’s a lot of steps and a lot of things to figure out. And when I first did it, especially, uh, as a first time homebuyer, I had no idea what I was doing.

Like, and I don’t know if a 30 minute podcast is enough to like make me an expert on interviewing real estate agents. Right? So, so we said, why don’t we develop this service? It’s completely free. It starts with a 30 minute phone call with me. We’re going to go through and answer any questions you have.

Okay. figure out your goals, look at your budget, figure out where you want to buy, like what kind of property you want to buy, all those important questions. So we can narrow in on [00:35:00] what is going to be the right agent fit for you. Then we’ll go out and either connect you with one of our network agents, people we’ve worked with in the past that we’ve vetted, that we know have really good backgrounds and are working with clients right now.

Um, and either connect you with one of them or we’ll interview agents on your behalf until we can narrow down to somebody we think is a good fit. You move on, you work with that agent, you can either, Stick with them like we’d recommend, or if it’s not a good fit, come back and we can, you know, redo the process, right?

That only happens a fraction of the time, but we’re, you know, you’re not locked into anything. The goal here is to make this a great process. And so that’s, that’s kind of how we, how we build it. So completely free service. Uh, the idea being that it just takes the guesswork out for everybody.

Tim Ulbrich: So you can find more information on that real estate, rph. com. Uh, you can get to Nate’s website, get connected with him. You can also send us an email at any time info at your financial pharmacist. com. And just say, connect me with Nate and we’ll help make that introduction. Uh, as well, and, you know, Nate, I, I’m thinking about the [00:36:00] small percentage of people that are listening in Northeast Ohio, which obviously have you in their backyard.

That that’s an easy win, but to clarify again, it’s really the intent is no matter where you live in the country, uh, that, that Nate can be alongside of you to help you, uh, engage and find that agent, which is we’ve outlined in this episode today. All the more important in evaluating agents, making sure that’s a good fit in the context of the new, uh, buyer agreement.

So again, real estate, rph. com. You can get more information or send us an email info at your financial pharmacist. com. Nate, as always really appreciate your experience and, uh, the perspective you give. Thanks so much for coming on.

Nate Hedrick: Tim, thanks for having me on the show.

[END]

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