by Ruth Jones Online on Wednesday, June 1, 2011 at 11:26am
So often as real estate agents we take it for granted that our buyers understand the purchasing process, what their agent does for them and even how we get paid. This is not always the case. I have put together a summary to help buyers understand how the process works, so they can make choices that fit their needs. The goal is to form a mutual relationship based on respect, designed to last well beyond their purchase.
Before you shop….Select that agent
Like any profession… Real Estate agents come with different level of skills involving communication, education, professionalism, even accessibility. Make a list of what is important to you.
Work hours– If you are someone who is only available during evening hours or on weekends, make sure that your agent is willing to work during those time frames.
Communications– Do you prefer text, email or phone? Make sure you and your realtor are comfortable with the same method of communication. Also discuss the frequency of communication.
Education and Experience– Don’t be afraid to ask about experience and education. Continuing education is a licensing requirement for real estate agents. In addition to basic continuing education hours, there are certifications that can be earned with a focus on a certain aspect of real estate, such as commercial, negotiations, working specifically with buyers or sellers. Examples are the “ABR” Accredited Buyer Representation, or ”GRI” Graduate Institute of Realtors, or EPro, with a technology focus. Typically a realtor will list these certifications on their business cards, but don’t hesitate to ask.
Personality– Even if an agent meets most of the above criteria, you will want to select an agent that blends well with your own personality. Common sense will prevail here, if you feel there is something annoying with an agent, then move on to another. Your relationship should be based on trust and compatibility.
Understanding how a real estate agent gets paid.
When a seller lists their property, they contract with the listing company to pay a commission, most often based on a percentage of the sale price, when the home is sold. This is paid at closing, and typically split between the listing agency and the buyer’s agency (referred to as the selling office commission). As a buyer you are not responsible to pay any portion of the real estate commission, but your agent does get paid as a result of your purchase. It is important to look at this as a business relationship between you and the agent you have chosen to work with. Many clients/realtor relationships last a lifetime.
Working with your agent.
Once you find an agent, it’s time to get down to business. You and your agent will discuss what you want to purchase, your budget, how you are planning to pay for it, and any timelines you might be working within. After which, your agent will begin the process of weeding through potential properties, calling agents, verifying lending and setting up appointments. It’s common for an agent to put in several unseen hours researching, selecting and scheduling to set up a single afternoon of viewing homes. Rarely do buyers find the perfect home on their first journey out with an agent, but each appt helps fine tune the buyer’s likes and dislikes. Purchasing a home is a large investment and it can take time to find the perfect fit.
Loyalty and Trust.. Win Win
Understanding how your agent gets paid can prevent unintentionally leaving your agent out on payday. The agent that writes the contract on behalf of the buyer is the agent that gets paid the “selling office commission”. So if you have an agent investing hours, gas and working hard to find you a home and you want them to be the one getting paid, they need to be the one who writes the contract. Navigating from agent to agent or using two agents, means someone is doing a lot of work and is not going to be compensated. The relationship with your realtor can last a lifetime. Someone you can seek advice from well beyond your initial purchase. Your agent will keep you informed on the market as your investment grows, and be there when you are ready to sell or purchase again.
Dedicate yourself an agent. If it turns out that the relationship with the agent you selected is not working, then make it clear and find one you can work with.
Using the seller’s agent?
Understanding the reasons a seller is willing to pay a commission to sell their home will help you understand the role your agent will play.
1) Exposure being the obvious reason a seller would want their home listed
2) Laws. There are a lot of legalities that go with selling a home in order to protect both the buyer and seller.
3) Contracts can be complicated and although designed to protect everyone, can be written with more protection or to meet specific needs of either the buyer or seller.
4) The right price. No one wants to get a year down the road to suddenly discover they sold too low or paid too much.
5) The listing agent has been contracted to represent the seller and put the seller’s needs above all others. To ensure you have someone putting your needs first, work with an agent you know and trust. Remember the listing contract is set and ready to compensate both the listing and the buyer’s agents (selling office commission). Working towards a clean professional transaction is the goal, and everyone wins.
Shopping in another area?
If you find yourself relocating out of the area, or shopping in multiple areas, your agent can refer you to equally trusted agent with similar skills and personality in those other areas. Agencies are linked and so are agents with certain certifications, networking back and forth. Your agent will likely suggest a trusted agent from a linked agency to cover the other areas. Referring agents often share or split commissions so that everyone is compensated and you remain in good hands. Don’t hesitate to tell your agent that you are looking in multiple areas.
Looking for an agent to represent you and your needs? Call your Real Estate Action Team today.