How do I find the right realtor for my needs?
Swarms of aggressive realtors descended on the nervous first-time home-buyers…
As a home buyer you will never find a shortage of realtors anxious to represent you in your real estate transaction (and even more anxious to collect their commission.) Choosing a bad agent can be a lot like ordering a bad first course at a restaurant – it taints the entire process from start to finish and makes you wish you had stayed home that evening.
There are a lot of bad agents out there, and thus a lot of opportunities for you to get stuck with the nasty taste of regret in your mouth. Let’s talk about some of the ways to evaluate realtors so you stick with the winners – and filter out the losers.
You should begin by asking family and friends for a recommendation. If someone else that you trust had a good experience with an agent, that’s a good sign. Make sure your agent is familiar with the different home builders in your area, and can distinguish the good builders from the lousy ones. Your realtor should listen carefully to your needs and should be able to take you to properties that suit you. A classic sign of a bad agent is that the realtor will take you to see many “junk” properties that are a waste of your time.
Open houses are a great place to meet realtors because you can quickly get a sense of whether or not they know the local market (and real estate in general). You should attend open houses at the beginning of your home search as a way of interviewing a large number of realtors. You’ll collect a lot of business cards that you can use to narrow down the field of potential candidates to represent you. Be sure to ask each realtor a lot of questions about the property at the open house. A good realtor will know their listing inside and out. If you hear "don't know" too many times, move on to the next realtor.
These days, realtors are trained to get potential buyers to sign a “Buyer Exclusivity Agreement” immediately. It is not necessary to do this – take your time to get to know the realtor. After all, chemistry is important! You may end up spending more time than you'd like with your realtor. The realtor should be comfortable showing you several properties before you agree to sign any agreements. Be sure to read the entire Buyer Agreement prior to signing. Consider hiring a real estate attorney to review any documents prior to signing them.
Dual agency, single agency, listing agent, exclusive buyer’s broker…what does it all mean?
Single agency occurs when a listing agent from one broker represents the seller and an agent from another broker represents the buyer. Both agents have a fiduciary (i.e. legal) responsibility to their clients. Information that the client shares with her agent is kept confidential. It also means that the listing agent’s primary responsibility is to get the best price and terms possible for the seller while the buyer agent is responsible for getting the best price and terms possible for the buyer.
Dual agency happens in one of two ways:
- The listing agent and buyer’s agent work for the same broker. The agents may not even know each other.
- The listing agent is also the buyer’s agent.
If the agent represents the buyer and the seller simultaneously, it is important to remember that although the agent cannot share confidential information, the agent must also remain neutral throughout the negotiation process. This can cause messy conflicts an opportunities for an unethical agent to rip off the buyer and the seller.
Despite these disadvantages, there is one great advantage of working with a dual agent: the dual agent has a bigger incentive to make the deal go through since the agent is due commission from both sides for a single transaction. During the negotiations, either side may ask the agent to lower their realtor’s commission.
Buyer’s Agent An exclusive buyer agent only works with buyers. This kind of agent does not take listings from sellers. This is usually the best kind of agent to have if you are a buyer because your agent will (at least theoretically) work towards getting you the best possible price and terms on the property you are purchasing. To find more, check out: http://www.naeba.org/.
How can I be sure that my interests will be protected?
Even with a buyer’s agent you can not be sure that your interests will be protected. After all, the buyer’s agent only gets paid when you purchase a property. As a result, that buyer’s agent has a financial incentive for you to make a purchase at any price.
One of the best ways to protect your interests is to hire a good real estate attorney to review all agreements, contracts, and papers that you will sign. Many documents you will see during your real estate transaction will be long and boring. Often you won’t even know what they mean. An attorney can help you navigate the mess of papers that will be directed at you during the home buying process. It is also likely that the attorney will know who are the good agents – and where the good properties are – in your area.