Although Americans continue to be smitten with the DIY craze, buying real estate is not a do-it-yourself project. Surfing the Internet to search for your dream home is part of the process. But, when it comes time to viewing homes, make sure you have a buyers agent who’s there to represent you.
Many new homebuyers don’t understand that although it may be legal in your state for the seller’s agent to also represent the buyer, you must know how that works. This is “dual agency,” a type of transaction that at one time all 50 states didn’t allow it, and here’s why:
The seller’s real estate agent has a duty to his or her customer to act in the customer’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 today (I’ll be writing about how this may change in the future, later). The seller pays the buyers agent commission out of the proceeds of the sale.
Do I Need a Buyers Agent?
Some real estate agents specialize in working only with buyers. That said, a buyer’s agent has experience working on the buyer’s side of the transaction.
When looking for an agent to represent you in your home purchase, don’t feel you need to restrict yourself to an agent who professes to work solely with buyers.
There are several situations in which you should consider working with an agent who not necessarily works strictly with buyers, but who is a bona fide specialist in the following:
- The mobile home purchase
- Buying a short sale
- The purchase of ranch property
- The purchase of a farm
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.
Get Referrals
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 buyers agent for your needs:
- Online: Check reviews on Google.com.
- 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. That’s because a full-time agent will have more time for you, an most likely more experienced
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. If you’re looking for personal, one-on-one interaction with the agent you hire, don’t hire the superstar with a huge staff.
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 love, time is of the essence in a fast-moving market. Will the buyers 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 or she has been in the business. Keep in mind, however, that new agents work under the wing of their broker, 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 important. What types of questions does the buyers agent ask? One of the most important is whether or not you have loan pre-approval.
The savvy buyers agent knows that until you have seen a lender, looking at available homes is a waste of time, for both of you. Reject any agent who doesn’t pose this question.
Should I Sign a Buyers Agent Agreement?
Many agents who consider themselves buyers agent specialists will ask that you sign an exclusive buyers agent agreement.
This document commits you to working exclusively with the agent for a pre-determined amount of time. These agreements will state 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. A good buyers agent will 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 buyers agent, while second on the to-do list, is no less important.
