Although Americans are smitten with the DIY craze, buying real estate is not a do-it-yourself project. Sure, it’s fine to surf the Internet to search for your dream home, but when it comes time to actually view the homes, make sure you are fully represented by your own real estate agent.
Many new homebuyers don’t understand that although it may be perfectly legal in your state for the seller’s agent to also represent the buyer, it isn’t wise. This situation is known as “dual agency,” a type of transaction that at one time was outlawed in all 50 states, and here’s why: The seller’s real estate agent has a duty to his or her client to act in the client’s best interests.
Now, how can this happen in a dual agency situation when the seller’s interests and the buyer’s interests are the exact opposite? Although agents feel they can offer the same ethical treatment to both parties, it doesn’t always happen. To protect your interests during the purchase process, secure your own representation. It costs you, as the buyer, nothing. The seller pays the buyer’s agent’s commission out of the proceeds of the sale.
Do I Need a “Buyer’s” Agent?
If having an agent who deals only with buyers is important to you, choose one who is a member of the National Association of Exclusive Buyer Agents. These agents work solely for buyers, avoiding the conflicts of interest inherent in the traditional seller-oriented purchase transactions. You can search for these agents on the association’s website.
There are several situations in which you absolutely must choose an agent who is a bona fide specialist:
- The purchase of a luxury home
- The mobile home purchase
- Buying a short sale
- The purchase of ranch property
Aside from these situations, pursue the best agent for your needs. Read on to find out how to go about finding this needle in a haystack.
Whether you need a real estate agent to list your home for sale or to assist you with buying a home, a referral is the best way to find one. Ask everyone you know, including family members, co-workers, neighbors, friends and local business people. The checkout lady at the grocery store may have just purchased a home and adores her agent. So don’t neglect to ask everyone you come into contact with and start compiling a list of names.
What if you’re relocating to an area and don’t have a network of contacts there? There are several other ways to find the perfect real estate agent for your needs:
- Online: The larger real estate sites, such as RealEstate.com, offer the opportunity to search for real estate agents in your area. At RealEstate.com, scroll to the bottom of the home page and click on “Professionals.”
- Relocation Representative: If you work for a large company and find yourself relocating as a result of this employment, consult the employee relocation representative for a list of agents to interview.
- Chamber of Commerce: Call the Chamber of Commerce located in the area where you are moving. The folks there typically have a directory of members and will be happy to refer you to several agents in the area.
Ask the Right Questions
Most guides to choosing the right real estate agent will counsel you to find out if the agent is full-time or part-time and suggest that you go with the full-time agent. The thinking behind this suggestion is that the full-time agent will have more time for you.
Not so fast. Ask a follow-up question: How big is your staff? The superstar agent with a staff of 15 is the agent you will probably never speak with or see until closing, if then. That’s not to say this person isn’t a good agent, but to remind you that if you’re looking for personal, one-on-one interaction with the agent you hire, don’t hire the superstar with a huge staff. If, on the other hand, you’re looking for speed and efficiency, the agent with a large staff is typically better able to provide that.
Ask the agent how many other clients he or she is currently working with. The more clients the agent has, the thinner his or her attention is spread. If you find a house online that you absolutely love, time is of the essence in a fast-moving market. Will the agent have time to accommodate your last-minute showing needs?
If it’s important to you that the agent has a certain amount of experience, by all means ask how long he has been in the business. Keep in mind, however, that new agents typically work securely under the wing of their brokers, so you are actually getting the wisdom and benefit of a highly experienced real estate pro, although second-hand.
As important as it is to ask the right questions, listening to the agent is equally as important. What types of questions does the agent ask? One of the most important is whether or not you have loan pre-approval. The savvy real estate agent understands that until you have seen a lender, looking at available homes is a waste of time, both yours and hers. Reject any agent who doesn’t pose this question.
Should I Sign an Agreement?
Many agents who consider themselves buyer specialists will ask that you sign a broker’s agreement.
This document commits you to working exclusively with the agent for a pre-determined amount of time. Broker’s agreements typically state that the agent will be compensated in the event the buyer switches to another agent and ends up purchasing a home shown by the original agent.
If the agent insists that you sign an agreement, ask for a short-term commitment. This way, should you decide the relationship between the two of you isn’t working out; you’re only locked into working with her for a short time. Agents typically ask for a 90-day commitment but the terms are negotiable, so choose a time period that you are comfortable with.
You are also within your rights to ask for a guarantee. Request that a clause be inserted into the agreement stating that if either party decides the business relationship isn’t a good fit, they will be released from the agreement.
Getting your finances in order and securing funding for the purchase of your home should always be the first steps in your home buying process. Finding the right real estate agent, while second on the to-do list, is no less important.