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Is
Your Agent Working for You? Don't take if for granted that any Realtor you meet
is on your side. It's hard to go through the
home buying process without having a good real estate agent on your side. The
process of choosing a realtor seems simple enough: you go to the nearest real
estate agent's office and they show you the houses they have available. If you
find a property you like, the home buying process is over. If you don't, you
wait a little longer or try another realtor.
But don't move onto our
mortgage articles just yet. There are several different types of real estate
agents, each with very different priorities and they're not easy to tell apart.
In order to make sure that you're getting the best information and the best deal
when you're buying a home you need to know which type of realtor you're dealing
with and which type you want to deal with. Choosing the right real estate agent
is almost as important as choosing the right real estate.
The three main types of
realtors – and a few tips on what they can and can't do for you – are listed
below:
Sellers'
Agents Most real estate agents do
most of their work as a seller's agents. This means that they have an agreement
with the owners of properties that are on the market: the seller allows the
realtor to try to sell their home by showing it to buyers and marketing it to
other agents. In exchange, the seller's agent receives a fee, usually a
percentage of the home's final sale price.
Not surprisingly, the
primary loyalty of sellers' agents is to the seller. Various legal and
professional codes require that a seller's agent promote the best interests of
the seller and avoid telling potential buyers anything that may be detrimental
to the seller's interest.
Of course, these same codes
require that a seller's agent not deliberately hide important information from
potential buyers. If a seller's agent knows a home's foundation is cracking they
have to let the buyer know about it. However, throughout the process their job
is to get the seller the highest price possible (and thus get themselves the
largest commission possible).
If you're a seller,
deciding how to select a seller's agent means figuring out how well connected,
how knowledgeable and how loyal potential realtors are.
Buyers'
Agents If a seller's agent is like
a prosecuting attorney than a buyer's agent is like a defense lawyer. A buyer's
agent is a real estate agent whose primary objective is to get the buyer lowest
price possible on the home they want. A buyer's agent hunts around for homes
that fit your needs and when it comes time to negotiate a price, they represent
you during the bargaining. Just like a seller's agent is prohibited from giving
away too much information to the buyer during the sales process, your buyer's
agent is prohibited from doing anything that will hurt your chances of getting a
property for the lowest price possible.
Occasionally, buyer's
agents may work for the same real estate agency as the seller's agent
representing the home you're interested in (this is known as a “designated
agency” arrangement). However, for the purposes of your transaction the
relationship is kept adversarial.
Of course, buyers' agents
have to be paid. In some cases, buyers' agents simply charge their clients a
fee. However, in most cases both a buyer's and a seller's agent are involved in
selling a home. Oftentimes the seller's agent will negotiate a deal to split
their commission with the buyer's agent. When this happens the buyer doesn't
have to pay anything.
Dual
Agents In rare cases you can end
up with a dual agent. A dual agent is a realtor who is working as a seller's
agent for a particular property and, should you become interested in the
property, serves as your buyer's agent as well. If it sounds a little confusing,
it is: dual agents are supposed to simultaneously be representing your interests
and the interests of the seller.
In these cases the dual agent is prohibited from sharing too much information about one party with the other. However, if you do contract with a dual agent it's best to remember that their loyalties are divided. Dual agent arrangements tend to work best when the buyer is prepared to pay the seller's asking price and both parties want to close the deal quickly.Open Listing
In an open listing, no single agency has an exclusive on selling the property and the owner can sell it himself without paying a commission to anyone. A seller can sign an Open Listing with multiple agencies. If the seller does pay a commission, it's to the selling agency only. No commissions would be shared in an Open Listing scenario.
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Disclosure
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