How To Work With Real Estate Agents

by Janet Wickell

How Real Estate Agents Differ

In most states a real estate agent must disclose which party he or she works for--by default usually the home seller, and disclosure typically occurs during the first substantial contact with a home buyer.

Here's a brief look at some of the details you might hear during disclosure:

Seller's Agent

• An agent working for the firm that holds a seller's listing. An agent working for a firm belonging to an affiliated or local Board of Realtors is called a seller's sub agent, and is in the same category.
• The agent's loyalty is with the seller.
• Buyers should not give confidential information to a seller's agent.
• Assume any agent is a seller's agent unless you've signed a contract to change that status.

Buyer's Agent

• An agent who has signed a contract to represent a buyer in a home search and sales transaction.
• The agent's loyalties are to the buyer.
• Buyer's agents should not disclose confidential information about the buyer to the seller or seller's agent.
• Some buyer's agents work exclusively with buyers, taking no listings.

Hiring a Buyer's Agent

by Janet Wickell

Any real estate agent can sell you a home, but a good buyer's agent can offer advice on every aspect of your purchase, including details about realistic pricing and negotiation strategies.

What Can a Buyer's Agent Do

• Agent's duty is to get the best possible price and terms for the buyer.
• Agent must disclose all material facts about property (bad roof, plumbing problems, etc.)
• Agent should disclose personal facts that indicate sellers will accept a reduced price (such as impending divorce, foreclosure, etc.)

Seller's Agents Have Different Obligations

• Agent's duty is to get the price and sales terms sought by the seller.
• Agent must disclose material facts.
• Agent cannot disclose personal information about sellers without permission.

I can't afford to pay a buyer's agent.

You probably won't have to.
Agencies usually share the seller's commission at closing, no matter whether an agent represents the seller or the buyer. Your buyer agency agreement should spell out exactly how a real estate agent will be compensated.

Ask your agent if there are possible scenarios where you would owe a commission (if you buy a for sale by owner, if the other agency doesn't share commissions, if you buy a home in another area).

The agent wants me to sign a buyer agency contract on the very first day, before we even look at houses.

Not a great idea. What if the agent doesn't follow-through after the first day? What if the two of you don't get along? What if the agent can't seem to understand what you're looking for? You need a little time to get to know one another before you commit to an agency agreement.

• Maybe it would be best to allow the agent to work as a seller's agent until you're sure about the relationship.
• Ask the agent to sign a buyer agency agreement that lasts just a few days.
• Sign a non-exclusive agreement, which makes the agent your buyer representative but doesn't tie you down to that agent exclusively?

So how do you find a great agent?

• Ask your friends for recommendations.
• Don't grill an agent with pat questions. Having a real conversation is a much better way to find out if your personalities match.
• If an agent exerts more pressure than you're comfortable with, move on.
• The agent should pay attention to what you say about your needs and wants.
• The agent should be responsive to calls or emails.
• The agent should take time to answer your questions.

Experienced buyer's agents can offer many insights, but don't discount a new agent. They usually aren't working with as many clients, so they have a lot more time to spend with each one.

Signing An Agency Agreement

A buyer agency agreement is a legal contract between you and the agent. Make sure you understand every clause of the contract before you sign. Will the agent be paid from the seller's commission at closing? Are there instances when that wouldn't happen? For instance, will you owe the agent a commission if you decide to purchase a for sale by owner home?

• Is the contract an exclusive agreement, binding you to that agent only, or a non-exclusive agreement, which allows you to work with other agents?
• How long does an exclusive buyer agency agreement commit you to working with that agent?
• How will the agent represent you if you decide to make an offer on one of her own listings or a listing within her office?
• Does the agency agreement cover any real estate you purchase, or only a specific type?
• Is the agreement specific to one city or county, or does it cover real estate purchased in any area? (You might want to work with multiple agents if you cannot find one who is familiar with all areas you are considering.)

A buyer agency agreement is negotiable. If you are uncomfortable with the effective dates or any clause requested by the agent, say so, and ask the agent to work with you to develop an agreement you are both happy with.
There are lots of good agents out there, so take some time to find someone you can work with.