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Matthew J Bl…, Other/Just Looking in 33410

How do I know My Realtor really has my best Interest?

Asked by Matthew J Blum, 33410 Sun Jul 15, 2007

Are they just showing me properties that offer them the highest commission?

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Matthew,

It's always important to know the type of person who is shuttling you around. You have plenty of good advice below, so I'll keep it simple. If you are still asking this question after more than a few showings, it's time to look for another agent. Making a purchase with all of the financial and personal repercussions that come with a home, you must trust your agent fully. I'm not sure there is a list of questions or formula you can devise to determine whether your agent is looking out for your best interests (much like any service industry professional). They must simply earn it. An agent does that by pointing out the negatives of a home as well as the positive. If you have looked at 10 houses, and your agent simply points out the nice features in every home without offering any critical analysis, that agent is worthless. I tell my clients that I hope they live in the home I sell them forever, however, I want their business should they decide to sell at some point in the future. In this regard, I am also looking out for my own selfish interests. I want a saleable listing. So I will point out anything that could affect future resale, negative or positive. I will also want to make sure that my client gets a great value so that we can price the home effectively when the time comes. I already made this post longer than I intended, so I will summarize that you want to work with an agent who is chasing clients, not sales. Build a strong client base through excellent performance, and the sales will follow. If an agent simply chases the next sale, watch out. After a little time with an agent, it should become crystal clear which camp they pitch their tent in. Good luck.
Web Reference: http://rayandpaul.com
1 vote Thank Flag Link Thu Jul 26, 2007
Hi Matthew,

It is very important to know your agent and ask qualifying questions. Ask for a list via email of all the homes listed in the area you are considering that are within your criteria. Do some online research on MLS. If you are still concerned, ask the agent why they chose these homes. If you have signed a Buyer's Representation Agreement they usually state that the agent is working in your best interest and you could always remind the agent of that. Just ask questions, lots of them. An agent looking after your best interest will always answer them without hesitation. Best of Luck.
4 votes Thank Flag Link Sun Jul 15, 2007
Dear Matthew, it is extemely important that you interview agents and talk about the services they provide. Build a relationship up with one that you feel extremely comfortable with.

In general, the higher the price of the home, the more commission the agent will make. In my area buyers agents typically make 3% of the cost of the home.

With the agent first ensure that they aren't the type to show you three homes and basically say "choose one". Go through the list of potential properties with your criteria with them and pick out properties you would like to see.

When looking at properties is the agent pointing out potential resale issues or telling you what they think of the properties price per square foot?

Is the agent trying to push you to purchase one of their own listings or pushing you to buy a particular listing? If so, ask what the commission is on that property and if there are any bonuses.

Insist that your agent pull market comparables to see where the house that you eventually settle on falls price wise.

Most of all, though, do find an agent that you can trust and that truly enjoys working in real estate. For myself, and many out there getting the best deal possible for my client is the addictive part of the equation!!!

Chris Tesch
RE/MAX Bryan-College Station
Web Reference: http://www.ChrisTesch.com
3 votes Thank Flag Link Sun Jul 15, 2007
Hi Matthew,
You pose an excellent question here. I think for the most part you will have a good feeling about the agent you are working with after you have taken the time to have a consultation with them. If your agent asks the right probing questions to determine your needs assessment.

In my state of Colorado we represent buyers only after a a formal "buyer agency agreement" is signed. In this document we are legally obligated to represent the buyer. This agreement also confirms the broker' s commission to be $xx.xx I find this document is not worth the paper it is written on without a mutual trust between the parties. I prefer to work with buyers I can trust. I'm sure they feel equally the same about me.

With that said, most buyers participate in the selection of homes process. It is not a matter of showing only the ones that pay the highest commission. In fact it is my preference to start at the lowest of the price range and work our way up if necessary.

Finding the right home is a process. Most buyers don't really know what they want, until they can see what they can have.

During this process my goal as a real estate broker is to find a home to satisfy the client's desires. It is much easier to sell homes to people that like them, then to maneuver clients to purchase homes that pay a higher commission.

Satisfied clients are clients that come back to me to resell and refer their friends. That is my goal. I'm in this for the long haul!

Hopefully you can find an agent (there are many) who thinks like me. Good luck!
Web Reference: http://thedenver.blogs.com
2 votes Thank Flag Link Mon Jul 16, 2007
Mathew,

The very first thing you should do is ask your potential agent what her fiduciary duties are and if you become her client. If she doesn't know, walk out the door! The supreme court holds the fidciary duties as higher than marriage vows, so your agent better understand what she is offering. These duties are:
Obediance (follow all of your LEGAL and ETHICAL instructions)
Undivided Loyalty (represent YOUR best interest in the transaction)
Disclosure (provide you with all facts she can discover about the property, and the opposing party)
Confidentiality (Does not end with closing, must keep all of your personal information private...FOREVER)
Accounting (must be responsible for all funds pertaining to the transaction)
Reasonable care, skill and dilligence. (must use all of her training, knowledge, and ability to assist you in the transaction)

Come prepared with a list of questions about how your agent works. Does she explain to you the hours she works and how to contact her? Does she explain what is expected of you as a client. (A buyer agency contract is a bi-lateral contract, you are both agreeing to do certain things) Most buyer's agents have a provision in their contract concerning how they get paid. As a buyer's agent, I require a retainer fee (refundable at closing or end of contract) and also require the buyer to pay my fee should the seller refuse. You may balk at this, but you are employing me to represent you. This allows me to show you all of the properties that suit you. I can work with unrepresented sellers (I ask that they pay the fee the buyer is responsible for in the offer), discount brokers, ect. I can better serve you. Also, I try every means possible to have the seller pay my fee.

Ask about your state's regulations about dual agency and designated agency. Also ask about the company's and the agent's policy concerning agency. Does this agent take the time to fully explain every possible agency situation? Does your potential agent welcome questions? If she does not know the answer to a question, is she honest about that and does she offer to find the answer, or is she vague and evasive? Do your questions make her uncomfortable?

Does your agent have a service pledge or similar document that allows you to exit your agreement if she does not do as promised? Does she provide you with her broker's contact information and encourage you to contact her broker if you are unhappy?

Does your potential agent ask you important questions about what you are looking for? Is she showing you listings that fit that criteria and your requested price range? Is she listening? Is she taking enough time to determine your wants and needs before showing you properties?

Finally, keep in mind that this is a partnership. You are employing this agent to represent you. If you don't feel comfortable with this person, interview someone else. Purchasing a home can be a really enjoyable experience, so be sure to choose someone you feel good about.
1 vote Thank Flag Link Thu Jul 26, 2007
Good Question:
1. Trust your gut.
2. Sign a buyers broker agreement and read it first. It should indicate what responsibilities they have.
3. Ask friends and family for references.
4. Ask the realtor to committ to your preferences.

The buyers broker agreement should indicate what the realtors compensation will be. There could be properties that will offer them 3 or 4%, but if they've agreed to 3%, they would have to stick with that and if allowed by law rebate to you any bonus or extra commission. You could also always ask before signing a purchase agreeement what the compensation is.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Mon Jul 16, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
I think Freakonomics has taught a lot of individuals to be wary of "Buyer's Agents" and asked a really pointed question that bears answering: "how can someone who is representing my interests, really represent my interest when my purchase/loan essentially pays their commission, and the more I spend, the more I make, and some homes pay that representative more than others?" It's a great question, but in the context of a real estate transaction, where every property is different, and as NAR advertises, every market is different, a buyer's agent really can represent your best interests.

The first rule of equity building in real estate is that money is made on the buy. That's a great litmus test question to your agent: "how will you help me make money on the buy?" I would contend that a lot has been said about money being made on the sale, but that's not really the case. Every piece of real estate ha a variable price and a seller will not negotiate much off of their price if a buyer has a contingency holding up their closing, even in a bad seller's market. But that same seller will negotiate a lot for a different buyer that can close quickly, if that seller needs to get out. That's an example, a very profitable one, of how an agent actually represents the best interest of a buyer.

In Colorado we are a little different with transaction brokerage and buyer agency... to discuss that would probably muddy the waters for buyers and sellers in the other 49 states. But as Oliver Frascona likes to teach in continuing ed courses on the subject, there is a fundamental difference between these two types of agents, and as a consumer, you need to know this anywhere: a TB talks only about the property, an agent talks about more than the property (the people) and thus the motivation. So as a buyer, if you have a buyer's agent (or the reverse a seller's agent if you're selling), ask that agent to role play what they would do in a negotiation. There really aren't tricks, there are subtle questions. The best one as a buyer is back to my previous example: ask the other agent when the seller needs to close. If that gets given up, well, you as buyer now have power to accommodate that seller, and that power usually results in you getting terms, price, the copper pot rack, the plasma in the living room, whatever.

The last little bit I would suggest is to really make sure that agent is in tune with your problems and needs. If you didn't have a direct need, you wouldn't need an assistant (or advocate) who did this professionally. If someone is really listening to you, not just tracking with you, but confirming with you by re-stating and pursuing agreement as to what your needs/goals and desires are in the transaction, you can now begin to trust your gut because you have proof that the person is on-board with you.

Best of luck.
0 votes Thank Flag Link Thu Jul 26, 2007
FIRSTLY, READ THE AGENCY DISCLOSURES; READ THE STATE'S REAL ESTATE AUTHORITY'S OR THE BOARD OF REALTOR'S CANONS OF ETHICS. Then, interview your Realtor Candidates about thos issues. THEY ARE VERY IMPORTANT. EXAMPLES: http://www.com.state.oh.us/real/realrevcodes.htm
0 votes Thank Flag Link Sun Jul 15, 2007
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