The buyer’s agent. Buyer’s agency. These are relatively new terms in real estate and most buyers entering into the market today do not know what they mean. Traditionally, the seller(s) hired an agent to represent the sale of their house — and the agent would negotiate and fight for their needs.
In recent years, this has expanded to the buyer. It makes sense when you think about it. As a buyer, you want (and need) someone working for you to find that house. How many people have time to call up twenty different agents and go see their listings? How comfortable do you feel when the agent is representing their own listing? Thus, the term buyer’s agent grew.
A buyer’s agent is a real estate agent that is dedicated to working specifically with a buyer. They will search for your home, make all the appointments, drive you from home to home — and then they will negotiate the best deal for you. Since this is a new idea many buyers are surprised when a real estate agent pulls out a contract and asks for them to sign a buyer’s agency contract. This contract means that the buyer will only work with this one agent and the agent will work for the buyer in finding the right home.
I will be honest: when I bought my first home, it was a shock to me. I didn’t know how to handle the situation. However, once going through it and then becoming an agent myself, I have learned some tips to share with you.
- You do not have to sign the contract. If you aren’t sure that you match up well with the agent, you don’t have to sign. They can still show you homes and represent you without you signing. By signing the contract, you are stating that you are going to be faithful to this one agent. Of course, the agent will feel more comfortable and be willing to invest more energy and time if they know you are faithful to them. But not signing does not mean they can’t show you homes.
- Meet more than one agent and be upfront about it. When you go to pick a lawyer, you usually see a few different ones to figure out who will do the best for you. It’s the same with a real estate agent. You should interview them, go see a few homes with them, talk with them, and see if you click. There is nothing more frustrating than spending a day with someone you don’t like. Finding a real estate agent is like picking a candy bar. They all have different flavors and satisfy different wants. One may show mostly million dollar homes, but you don’t want to work with them if you are in the $250,000 range because they don’t know your market. One might show city homes, but you don’t want them if you are looking to buy a farm. One might be aggressive and pushy whereas another is happy to spend the day touring houses. If you are trying to undercut a home’s value, you may want the aggressive and pushy agent. If you are just starting to look and plan on looking for the next year, you may want the calm agent.
- Think about it. You may decide you want to sign a buyer’s agency contract. That is wonderful and a really smart decision, but don’t feel pressured into signing in the car or inside the first home you see. Take home the contract, read it over, and look for your out clause. Make sure that if something goes wrong, you know how to terminate the contract.
Finally, remember that your agent is working for you — and they get paid by the seller when you pick a home. They want you to find a home as much as you want to find the home. So, be honest about money, time, and needs. They meet all kinds of people. You aren’t going to impress them or shock them. They have seen it all. So, just be honest and start searching for the right home, in the right neighborhood, and for the right value — for you!
Happy Home Shopping!!
Anna Domzalski is a real estate professional and Financial Bin contributor. You can contact Anna at firstname.lastname@example.org, email@example.com, and visit her website, RealEstateInBucks.com. You can also follow her on Twitter @AnnaDomzalski and on Facebook at facebook.com/AnnaDomzalskiSellingBucks.
Make sure to check out what else Anna had to say about selecting a buyer’s agent on Episode #1 of Real Estate Intervention on Financial Bin TV: