Why buy or Sell with a Real Estate Agent

Understand home financing better. One of the most valuable benefits of working with an agent is their help with understanding how much you can afford for a new home. Aside from recommending trusted lenders, real estate agents are spectacular resources for insights into neighborhood specific information and trends.

Your real estate agent might have great information on HOA obligations for a specific building or development, and could save you huge headaches from upcoming fees or special assessments. For first-time homebuyers, agents can be invaluable in helping you understand all of the added costs of owning a home, such as: taxes, insurance, maintenance, and the like.

Get the most up-to-date property listings, comparisons, and benchmarks. There are dozens of resources to search for homes, but the most up-to-date and reliable data is always going to come from the MLS or directly from the broker. While you, and millions of others, can lean on all of the resources available publicly online to get an idea of the market, your real estate agent is going to be able to keep you updated to-the-minute on the status of properties.

They will be your best resource for information on how long a home has been on the market, if it’s been listed more than once, how it compares to neighboring properties, and any insights from previous inspections.

Get marketing & guidance from a seller’s perspective. The agent will provide comparative market analysis that will be a strong estimate of the home’s value for pricing based on comparable sales in the area, condition of the property, and state of the market.

Skilled agents will also provide valuable exposure to court prospective buyers. Only licensed agents and brokers can add your listing to the local Multiple Listing Service (MLS) for syndication to other agents and even web portals.

Ultimately, your representative will help guide you through the complex selling process. They will verify that any buyers you are working with are pre-screened, pre-qualified, and generally capable of completing the transaction. The agent will work with the buyer to negotiate the final price, as well as any adjustments that are requested based on inspection results (with your direction being the final say). They will also handle any earnest money deposits from buyers and prepare certain documentation within their domain such as purchase contracts.

In most states, the relationship you create and have with the real estate agent is called “agency”.

IMPORTANT: Agency means that the principal, you, gives the agent the right to act on the your behalf.

How agency develops between a homebuyer and their agent varies widely and you should understand how this relationship is created in your area. In some cases it can be the simple act of walking through a potential home with your agent; in others it is only created when you sign a purchase contract and the agent is listed as your representative.

Buyer’s agent

This agent represents the buyer in the real estate transaction. Compensation for this type of agency is usually commission based and happens after the transaction has closed. Often times the seller’s broker will split the commission with the buyer’s broker. Before you agree to a relationship, know how the compensation structure will work.

Seller’s agent

This type of agency represents the seller in a transaction. Also known commonly as the “Listing Agent”, this agent holds the listing and has a responsibility to the seller to secure the best price and terms possible in the sale.

Dual agency

This is uncommon, but happens when an agent represents both the seller and the buyer in a real estate transaction. Laws in most states severely restrict what a dual agent can do. In most situations, it’s not a good idea to have a dual agent because of the conflicting responsibilities to each party.

Eco-brokers

These are agents that understand sustainable real estate, commonly known as “green” living. These agents will know how to make improvements in indoor air quality, what types of eco-friendly retrofits will be the most cost-effective, and how to piece together the state and local tax credits or grants for green projects.

The agent plays such an important role in the home buying process; don’t just go with the first one you meet. There’s nothing more valuable than someone who is willing to share from personal experience with an agent. Ask family, friends, and co-workers about agents they have worked with. Recommendations are going to be invaluable, but ultimately your needs are unique so be prepared to vet any referrals.

Your agent has certain obligations to you in the real estate transaction. He should work in your best interest and typically have a fiduciary responsibility to you. The agent should consult with you before delivering counteroffers in negotiations and contract-related communications. While an agent is your representative, he should obey your requests.

Here are some considerations when qualifying an agent to represent you:

Interview the agent and ask how many homes the agent has listed and sold in the past few months. If you can, get references from past clients and follow up to get a better understanding of how the agent works.

Make sure the agent can take care of your needs with questions you have or things you don’t understand about the home buying process. For instance, you may have questions about mortgage insurance, which is required for many first-time homebuyers. If they can’t explain concepts in easy to understand terms or put you in touch with someone who can, they may not be the best choice.

The way an agent communicates is another important consideration, especially when you prefer to exchange information with him in various ways, such as by email, telephone, and text messaging.

Be clear that the agent is representing you and that you are working with a buyer’s agent if you’re a buyer, or a seller’s agent if you’re a seller. Also, ask about the agent’s commission and any requirements of buyers or sellers agreements. Some agents will want exclusivity, meaning that you will be working only with them. In this case be very aware of the term of the agreement and details that could lock you in to a relationship that isn’t working.

Once you’ve decided with whom you want to work, be open, honest, and fair with your agent. Expect regular contact with your agent, but remember the agent also has other clients. When you tour a home with an agent be sure to tell them what you like and dislike. The agent can use this information to find houses that more closely match what you are looking for.

THE BEST POLICY: Expect honesty from your agent. If you are unrealistic about the type of home you can get for your money, your agent should tell you.

Be sure to give the agent feedback about why you are unhappy. If you bring up issues with the agent and he doesn’t satisfactorily deal with problems, you can fire him. Check out the terms of any contract you may have signed.