If you are a home buyer you may ask yourself whether it is worth the expense of having a real estate professional involved in the transaction. You may think you can save money by doing it yourself. While this appears to be the case, people often spend a lot more money when they forego the option of professional help. By forfeiting professional help they deprive themselves of an array of services that can assure that there are no hidden pitfalls in the purchase. In more than a few cases, buyers without representation pay too much, make a bad investment or a legal or paperwork mistake that can lead to legal action. Like any other professional, an agent has the experience and knowledge available to warn you of potential problem areas in a home and in the home buying process.
In this age of specialization you can choose from a number of areas of expertise. A buyer's agent works exclusively to negotiate the lowest purchase price and best terms for the buyer. This agent serves the buyer with undivided loyalty, confidentiality, and full disclosure. A seller's agent works with loyalty and fidelity as the seller's advocate and negotiator, and is obligated to disclose to potential buyers all adverse material facts that are known about the property. A dual agent can work for both the buyer and the seller by written, informed consent of both parties and has fiduciary obligations to both. The agent can only disclose to one party what the other party allows to be revealed. A transaction broker assists the buyer or seller or both throughout a real estate transaction without being an agent or advocate for any of the parties. In any real estate transaction you have the right to know which party the real estate agent is representing.
Make them earn their money. From the beginning, you and your agent need to work together to determining and fine-tune your specific real estate needs. The first thing I do with a new client is invest a lot of time at the outset on what I call “the goal setting” process. Important elements that make up the goal setting process are answers to questions like: Where do you want to live? What are your parameters for a house? How many bedrooms do you need, minimum/maximum? Do you need a main floor bedroom? What about an in-law suite. Are overnight guest accommodations important to you? How far do you want to commute? Is a two story, ranch or split-level better for your family? What kind of community do you want to live in? Are School Districts important to you? How big a yard do you need?
These and many other questions help determine your goals and what you will ultimately buy. You are not expected to have all these answers at the tips of your fingertips. “Goal setting” as on-going evolving process that will change and grow as you are exposed to more information about what is available to you. As they evolve, your agent should be revising his or her research to consider your updated goals.
There are, of course, many other considerations you and your agent will need to work out. Buying a home does not occur in a vacuum and there are all kinds of behind the scene people and services involved. In the initial meetings your Agent will focus on your needs and desires and the representation agreement. However, as you work together you will discuss many other things you need to consider. For example, you are going to need a mortgage, escrow or settlement company, title insurance, a home inspection, etc. Since you are probably unfamiliar with companies that provide this service and how to work with them, your agent should work with you to assure that you get the best support in these areas.
Homebuyers often consider money as the most important issue when thinking about purchasing real estate. Since there is no such thing as unlimited purchasing power, money should be an early consideration. Since everyone has a limit on their resources, it is important for you and your agent to have a frank discussion about finances. However, you should expect your agent to help you leverage your resources by educating you on all of the options available to you. Today’s buyer often purchases a first home with the idea of moving up. If your long-term needs and desires are unaffordable in the short term, inform your agent of your eventual goal so he or she can help you achieve it. I have helped people buy several homes as they moved toward the fulfillment of their final dream.
The more your Realtor understands about you, the more she or he can apply the critical eye and experienced eye that you will need. The more you understand about your Agents obligations to you the more aggressive you can be about assuring you are properly represented. At a minimum you should expect them to handle your entire home buying interests including negotiating the best price and representing your interest through the closing. In addition, they should conduct price research on comparable properties; check the neighborhood, schools, employment, property sales history, etc. when you find a home that interests you. You should also count on them to point out defects, recommend inspections, suggest offering price and terms, and take care of the myriad of details involved in increasingly complex real estate transactions.
Insist that your Agent inform you of his or her working hours and response time so you can call them when you have a question or concern. A good agent will be on-call from early in the morning until late at night, and have a knowledgeable, competent staff to help you if they are taking care of other business. Make your agent show you enough properties to be entirely familiar with your needs and tastes. This type of in-depth understanding will help increase the probability that you find the property that is exactly right for you. As your representative your agent should be able and willing to devote as much time as you need to find your home. This means the Agent will not be able to handle more than five or six serious, committed buyers at a time. It is an incredibly demanding and time-consuming task to properly represent a client.
A note of caution, if you are the type of person that likes to search real estate ads and do drive-bys make sure you call your agent if you see something you like. Do not call an agent listed on a sign or at new construction sites. This agent is representing the seller and has no legal or ethical responsibility to you and you may put your buyer-agent in a position where he or she may not be able to fully represent your interests. When you engage an agent to represent you, you are showing that you have full faith and confidence in his or her abilities and knowledge. That means you trust him or her to aggressively represent your interests throughout the entire estate transaction—make them earn their money.
Hints to Help you Hire the Best Real Estate Agent
Find Out Who the Agent Represents
The first issue to determine is whether or not the agent can legally be your advocate.
You should always ask the agent if they represent buyers, sellers, or both. It is always wise to hire someone who has experience as both a buyer agent and a seller agent because you will need diverse experience when it comes to negotiating for your new home. However in order to make sure you do not lose your agent’s advocacy when conflict arises, you need to know how they handle conflicts that can come up. You should also find out how companies handle their listings. For instance, ReMax Agents are independent agents and listings are handled independently. This means that when you buy a home listed by a ReMax Agent other than your own, he or she is not in a dual agent role. Don't let anyone minimize the importance of this issue. A good company will have a lot of listings and a good process in place to make sure your interests are well represented if your agent happens to be the listing agent for the home of your dreams.
While buyer's agents look out for your interests, not all buyers' agents are the same. You need to dig deeper to find what experience they have and how long they have been in the business. You also need to find out if their firm lists many homes in your price range. These and other questions should be addressed during the interview process. See Interviewing Guide.
'Due Diligence' - What will the agent actually do
Even beyond the agency relationship distinction, an agent needs to be trained in something called “due diligence.”
You need an agent that goes beyond identifying and showing you homes. You need someone who maximizes the use of your time by matching your needs to the home they are showing you. You need someone who knows the market, the neighborhoods, the schools and where to find the best values. You need someone to take care of you both during and especially after the sale, to help you get thorough a home inspection, find the right mortgage and advise you on things you need to know. That is what I call performing “due diligence”.”
Technical terms are common in every industry. Agents use the technical terms and acronyms with ease, forgetting that they sound like they are speaking a foreign language to outsiders. Real estate has more than its share of technical terms. Your agent should help you understand all aspects of the sale. Buying a home is too big a purchase to have any uneasy feelings about what the agents mean when they talk about radon level thresholds, variable rate versus fixed rate mortgages, and zoning restrictions. See Real Estate Glossary and don’t hesitate to ask questions casey@margenau.com or (703) 827-5777.
A real estate agent is part teacher and generally loves to share with you the ins and outs of the business.
Expectations and Progress
Your first counseling session with an agent sets the stage for your relationship.
Discuss your expectations in detail. If you have started the home-buying process explain what you have done. Let your prospective agent know about any disappointments from previous agents, such as not returning phone calls, late for appointments, or vague answers to your questions. Make sure that the agent has a way of getting information to you.
Look for the ability to really listen to your needs and a desire to help you focus on your most important requirements. Your input will allow the agent to find the best home, community, school, and neighborhood that fits your budget. Communication is the most important asset to look for if you want to be satisfied with your satisfaction agent. See Interviewing Guide.
Share Your Feelings
Let your agent know if you have any concerns, worries or fears about buying a house.
A good agent will be able to explain the real estate buying process and help alleviate your fears. The purchase of a home is a large financial and emotional investment and it is natural to suffer some anxiety and start to second-guess yourself. Your agent should always be willing to answer your questions and deal with your fears. In walking you through the home-buying process they can help you decide whether to buy, how much to buy, and when to buy. If you are just starting and need to learn about pricing, house styles, and resale homes vs. new homes, etc., talk to your agent. If during the home-buying process you change your mind about the criteria for your home search, let your agent know. It is not unusual for buyers to change their mind as they look at more and more houses. Set up a signal with your agent so that when a seller-agent tries to push you in a direction you are not comfortable with, you can let them know they should intervene on your behalf. Finally, let your agent know you expect them to assist you once your decision is made and even after the sale. Finding mortgages, dealing with home inspections, and helping you find a mover are a few of the services you should expect when you hire a top agent. Remember your agent is your partner; make sure you have full trust in their abilities. See Interviewing Guide.
Know the Staff
Not every phone call to can be handled immediately by your agent.
A top agent has a top staff that allows you to talk to someone who is knowledgeable when the agent is busy. Sometimes you might just need a full data sheet on a house you saw for sale on your way to work or maybe just the price to see if it is in your range. Cultivate a relationship with the assistants so they can help you with the little pieces of information you need when the agent is not immediately available.
Define Your “Show Stoppers”
Make sure your agent knows about them.
Every real estate agent knows that no house is perfect. Even brand new homes have flaws for some buyers. The best approach for you and your agent is to understand your 'show stoppers' and avoid them. For example, if you know your schedule will not permit doing home repairs and updating, don't look at fixer-uppers no matter how cheap they are. If your young family needs a subdivision setting and you really want that private country setting, think again. You may have to compromise between what you want and your family needs. If you know that the interstate highway and the noise in the backyard will drive you nuts, don't make an appointment to see that good-looking home off the Beltway.
