The phrase “I don’t sign an agreement with an agent until it’s clear that they are working for me!” is something I hear the most from home buyer clients.
Unfortunately, agents cannot work for you unless you sign a formal agreement that permits the agent to represent your interests in a real estate transaction. A customer is a person who is interested in buying or selling real property but has not signed a formal agreement with a broker. A client is someone who has signed a formal brokerage agreement with a broker.
Legally speaking, an agent cannot show you houses if you’re not a client. Agents can be held liable if they do not sign a contract. This limits what information an agent can disclose to potential clients or customers.
Take this as an example. You are a customer if you approach a realty firm and start asking questions about properties. You schedule an appointment to look at homes. You are taken to 5 homes by the agent. After you have seen them all, but without signing a formal brokerage agreement, the agent helps you choose the one that you like.
An agent has entered into a formal listing agreement for the seller of the property you are interested in. The agent is legally and ethically bound by the seller to represent their Judi Bola best interests and will receive a large commission. The agent may not be motivated to get you the best deal. It is a good idea to compile a list of agents you are interested in working for, then call them up to conduct an interview so you can choose the best buyer’s agent. The agent you choose can then easily sign a buyer brokerage agreement.
If you refuse to sign the Exclusive Buyer Brokerage Agreement the agent will require that you, as the customer, sign a Customer Acknowledgment. This acknowledgement states that you were offered formal agreement but declined it.
The law does not require the brokerage or agent to sign the customer acknowledgment. The customer is considered a customer until the Buyer Brokerage Agreement is signed.
Agents in Georgia, for example, cannot give advice or recommend lenders to customers. Agents cannot answer simple questions such as square footage.
Agents will not tell you they can’t answer your questions if there isn’t a contract. You will hear them say things like, “I need more research” or “I don’t know. Let me find out.” They will then try to get you to sign a contract. They will show you properties they have on the market if they can’t get you to sign a contract. They are the only agent who can negotiate and represent the seller’s best interests. This makes it easy for the seller to close the deal quickly and profitably.
You are not protected if you don’t have a formal agreement. The agent is actually not working for you. Many people believe that agents must work for their clients first, and then they get the privilege to sign the contract. This is a bad idea. Interviewing agents is the best way to find out if they are available to you.
Subdivision agents can’t represent buyers. So do not be fooled. You are not expected to be in the best interests of your new subdivision if you enter it. The agent is the builder. You must have an agent if you are going to enter the subdivision.
This is a list with pertinent questions that you can ask the agent during your interview.
– How many years have you been a full-time agent?
It is a two-fold question. You first need to find out how long an agent has been in the business, and if they have any expertise. Real estate can be volatile. An agent who has been in business for a while has shown a commitment to the company. However, this does not mean that inexperienced or new agents should be dismissed. Agents who are new to the field will be eager to succeed. They may also be less busy than an experienced agent, but may be able provide more attention than a more busier agent. You should not only be concerned about how long the agent has been in business but also their current or past employment status. Part-time agents are likely to have additional obligations that could limit their service and attention.
– What hours are you available?
This will help you to determine their availability. This question will help you to determine if your availability is consistent with when you can visit homes, provide documentation and talk with an agent about the transaction. It is important for home buyers to know how quickly they return calls. Are they more comfortable calling their office or their cell phones? Are they more likely to use email? Are they available during office hours? Your agent should be there for you if you have any questions, concerns or issues. You never know what you’re going to get.
– Which are your specialties?
Agents may specialize in a particular niche. They might specialize in first-time home buyers, or they may work with investors regularly. It shouldn’t be a dealbreaker if you interview an agent who doesn’t specialize in the type of deal you are looking for. It’s great if you are a first-time home buyer and the agent is a good fit for you.
– Is there a specific area where you would prefer to work?
This is an important question, as an agent who specializes in your area of interest will have a distinct advantage. However, this doesn’t mean you need to search for an agent in a different area. Sometimes an agent will show you homes in one neighborhood, but they might want to show you another area based on new information. This should not discourage agents from showing you homes in a specific area.
– How many houses are you currently listing?
This is a crucial question, even if you’re buying a house. It may help to determine if they prefer working with sellers or buyers. If they have multiple listings, they might have their own listings that they would like to show you. If this is the case, make sure they’re only showing you homes that fit your criteria. If the agent wants you to see the homes they are listing, that’s fine. If the agent is doing this solely to get a bigger paycheck, you might want to let them know that your needs are the priority. This may also be a good way to keep in touch with your agent if you decide to sell your house. They will also be able talk to you about your home’s ability to be sold again, even before you buy it.
– How many buyers do you currently work with?
Again, Mr. or Mrs. Realtor, would you rather work with sellers or buyers? This question, in conjunction with the previous one, will help you to understand which side the agent prefers to work on. It has been my experience that agents will answer the question on the side they are most comfortable contributing to. Although I don’t call agents liars (I’m not calling them that), remember that you are dealing with salespeople. They might not have a preference. However, if they are working with more buyers than sellers then this should give you some insight.
– Can you give me a list of references?
This question should be easy to answer. Agents should be able and willing to give references. It is also a good idea to provide written references. Some references prefer to be reached via email. Don’t let this discourage you. The agent who actually emails back their references wins! They win even though they may not be able to serve your real estate needs. Also, ask if any references are family members.
What makes you stand out from your competitors?
This question is not a problem for a good agent. An “elevator speech” is what they should have ready. It is usually a short way to explain how they will service you and what sets them apart from other agents. Agents are often asked this question on a regular basis. If they don’t know the answer or struggle to answer it, then this should be a red flag. Good agents will be able to tell you what they can do for you and how they intend to help. How can they help you if they don’t know the answer? You want an agent who is trustworthy, confident, assertive, friendly, and honest. It is important to have good negotiation skills and excellent analytical skills. To see if you list matches the agent’s unique selling proposition, you might want to make your own.