Finding Your Realtor
When someone decides it is time to sell their home, they interview several Realtors from different companies to determine which one is best for them. They want someone who will represent them and someone they feel will do an effective job at marketing their home.
However, when someone decides to buy a home, they usually end up with their
Realtor through sheer accident. Why don’t home buyers search for a Realtor the
same way that home sellers do?
Instead, homebuyers usually end up with a Realtor as a result of answering an advertisement. The advertisement will give a brief summary of a home available for sale along with the price, but it says nothing at all about the Realtor.
So… does it really make a difference?
Listing Agents and Selling Agents
You see, there are two “sides” to every sale. The listing side and the selling side. Most deals have an agent representing each side, so there are generally two agents involved The seller’s side is represented by the listing agent. The buyer’s side is represented by the selling agent (also known as the buyer’s agent).
Agents can deal with both buyers and sellers, but the majority tend to focus their efforts on one or the other. Some even exclusively handle either buyers or sellers.
So What Should You Do?
We simply recommend that you take as much care to hire a real estate agent as
you would for any other professional. Ask questions. Ask about education,
experience, and focus.
After all, buying your next house is probably the biggest purchase you’ve ever made in your life. Does it make more sense to find your agent by accident…or by design?
Do You Make an Offer With the Listing Agent?
For argument’s sake, suppose you see a property that is “just perfect” and you don’t have an agent yet? Do you make an offer with the listing agent?
Well, most deals have two agents involved. The listing agent markets the house and represents the seller. The selling agent represents the buyer. The seller pays the real estate commissions to both agents.
When you make an offer directly to the listing agent, there is only one agent involved instead of two – so things work a little differently.
Agency and Disclosure
When you make an offer directly with the listing agent, the agent will disclose the possible working relationships that exist – whether they are going to represent both you and the seller, or just represent the seller. There will be a document you sign called an “agency disclosure” that spells out the relationship.
When representing both sides, an ethical agent becomes more of a transaction facilitator or perhaps a “dual” agent, depending on what state you are in. In effect, they are not an actual advocate of either party but mostly an information provider and communication conduit.
The agent will convey offers and counter-offers back and forth, but won’t provide opinions to one party or the other on how “negotiable” the other party might be. In addition, they will answer questions, explain things as the transaction progresses, make suggestions about whether getting inspections is a good idea – and so on – but they won’t be your advocate or the advocate of the seller.
If the agent discloses that they are acting just for the seller, then they are the advocate of the seller — and you are on your own.
Road Bumps & Conclusion?
Most real estate transactions go fine, but almost every one has a challenge or two. These challenges are often routine, but sometimes not. One party may come out on top in a dispute and the other may feel that they did not.
When there is only one agent, the buyer may sometimes feel that the agent took the seller’s side in a dispute. Often the criticism is not merited, but human nature being what it is – it happens.
In the end, make an informed decision. If you are considering making an offer directly to the listing agent, ask questions. What are you giving up by not having your own agent? What will you gain by presenting an offer via the listing agent? When you get your answers, make your decision on what you want to do.
Why Listing Agents Advertise – is it What You Think?
Listing agents place ads for several reasons. First, they need to show the seller that they are doing something to sell their home. Second, by showing how much they advertise, they can also attract other individuals who are thinking of selling their homes.
They point to their ads to show their clients that they are aggressively marketing the property. When other home sellers constantly see ads from a particular Realtor, they are inclined to want to list with that Realtor, too. So even though the ads look like they are directed toward home buyers, they often have another purpose. To attract home sellers.
What sellers don’t normally realize is that a listing agent’s true marketing emphasis is directed toward other Realtors, not the general public. Their main goal is to convince the selling agents (buyer’s agents) to find buyers and make offers. This is a good thing because if you are selling a home, you want as many Realtors as possible bringing buyers around to take a look. Most of a listing agent’s marketing efforts toward other Realtors are invisible to the general public, but it is where an effective listing agent does a home seller the most good.
Additionally, many listing agents now have “teams.” One member of the team will probably be a licensed agent who acts in the way described just below:
Selling agents (buyer’s agents) do advertise homes for sale in order to attract buyers. Although the ads do market a specific property, they are mostly intended to attract buyers in general — not a buyer for that specific property. The agent would be happy if you did buy the property you called on, but it happens so rarely that they do not expect it.
What happens when you call on a real estate ad is that you often schedule an appointment to go look at the advertised home. While you are out looking at that home, you will probably want to look at others — so the agent will show you a few other homes, too. Eventually, you and the Realtor will zero in on what you need and like in the proper price range and you will make an offer.
That is how most buyers find their Realtor — by “accident.”
Finding and Using Your Own Realtor
Actually, the best thing for you to do when you see an advertisement in the paper is to call your own Realtor and tell them about the ad. Since addresses usually do not appear in advertisements, your Realtor will call the listing agent and find out the MLS number for the property. If the listing is on the internet, it probably already provides the MLS number.
The MLS number allows the agent to access the listing directly on the Multiple Listing Service computer. That reveals a lot more information than what is available to you on the web.
The house may turn out to be a great home for you, but it may also be a property the Realtor has already disregarded because it backed up to a busy noisy street and you have told your Realtor you wanted a quiet neighborhood.
You Have to Find an Agent – How Do You Do That?
If you’re reading this, you’re probably on the Internet. One key to a successful relationship between a real estate agent and their client is that, in addition to representing your interests competently, they educate you about the process as it unfolds. So don’t simply look for property on the web – look for an agent that informs you about the process.
Referrals are always a good way to go. Perhaps a friend, co-worker, or family member recently bought a house in the same community and had a good experience. However, if they bought a house twenty miles from where you want to move, it may not be a good idea to use the same Realtor.
You want an agent who knows the area in detail and has already previewed many of the homes available for sale in that community. Community knowledge should be important to you because you are not just buying a house.
You are buying a home in a local neighborhood in a specific community.
Every Realtor can show you every property available for sale in the Multiple Listing Service. Since that is true, you can call any real estate office and find a Realtor willing to show you houses for sale. The problem is that you do not know if you are talking to an excellent Realtor or a lazy inactive one.
Shopping for an Agent
Your first step should be to shop for a Realtor, not to shop for property. Shop for a Realtor the way you would shop for a good attorney, accountant, mechanic, plumber, doctor, financial advisor, or other professional.
Now that we have the Internet, you have more information at your fingertips than buyers from the past. The web is a good place to start. There are lots of directories that list agents, plus search engines, too. Peruse the sites. If an agent has lots of information on their site and seems genuinely concerned about informing homebuyers, that’s probably a better choice than someone whose web site only talks about how good they are.
The client should be the focus, not the agent. At the same time, agents have to market themselves aggressively – or else you won’t notice them.
If Automobiles Were Houses
Imagine that automobiles are sold like real estate, with no more car lots or dealerships. Both new and used cars are just parked on the street. So if you want a Ford, there are no more Ford dealerships. No more Lexus dealerships or any other kind of dealerships, either. If you want to look for a car on your own, you just drive around and see what you can find. Even then, you can only look at the outside, because you don’t have the keys.
There are some people that have the keys. They also have a computer that tells them where all the cars are parked, what model and year they are, what size engine they have, and how many miles are on the odometer. They get paid a commission for selling the cars.
Some of these commissioned agents just sit around and look at the computer, waiting for the phone to ring. Some of them go out and locate the new cars, physically inspect the interior and exterior, and flip on the ignition to listen to the sound of the engine. They are interested in finding the best cars so their customers refer future clients to them.
Who would you rather call?
How to Conduct the Search for a Good Realtor
One way to find candidates to interview is to talk to professionals from real estate related professions and ask their opinion. If you know someone who is employed as an escrow officer, title representative, homeowners insurance salesman, or loan officer, they will be able to recommend Realtors from the area they work in.
If you talk to a loan officer, be sure it is someone who deals primarily with purchase money first trust deeds and mortgages instead of refinances, second trust deeds, or finance companies. Since the latter do not deal with Realtors on a regular basis, they will not know who to recommend.
You could just make phone calls to real estate offices and ask questions. Ask the manager to recommend someone or ask a Realtor who he/she would recommend from another office. This will be a little tricky because the Realtor you ask will be “giving away” a commission, but you will find out who they respect as a competitor.
A new alternative to finding a Realtor is the internet. Look for Realtors who advertise themselves, not property. That way you have a pretty good idea you are getting a “buyer’s” agent instead of a listing agent. Look to see if their web page offers something to you in the way of information or other services instead of just telling you they are “number one.” You want someone of value to represent you, not someone who is full of “puff.”
Interviewing a Good Realtor
When you interview Realtors for the job, you want someone who will be concerned about you and will take care of your interests. You want someone who demonstrates ready knowledge of homes available for sale and does not have to call you back after they “check on the computer.” This ready knowledge demonstrates they have actually been out previewing homes and don’t just sit around waiting for the phone to ring.
You also want someone sharp enough to ask you questions as well, including your financial and debt information. By asking these questions, a good Realtor will be able to determine the proper price range you should be looking in. By asking about your family, an agent will be able to tell if what you need in a home is something available in your price range. You want a Realtor who is bold enough to talk straight with you instead of always telling you what you want to hear.
When a Realtor Asks to Meet With You
Finally, any decent agent will always ask for an appointment to meet with you, too. It is only natural, since they earn their living by commissions. However, Realtors are also supposed to act as your agent, looking out for your interests before their own. You want a Realtor who takes that responsibility very seriously. If someone seems too much like simply a salesman, then maybe you should look a little further.