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Choosing an Agency Relationship  Home buyers today can benefit from new, consumer-friendly options through "agency choices" as they conduct their home search and purchase. They can make some important decisions about the services they receive before they even start to look at homes. For example, do you want to be a "customer" or a "client" and what difference does it make? If you want the real estate agent to represent your best interests, including negotiation for the lowest price and best terms, you want 'client' status which means the agent will work as a Buyer's Agent (also referred to as Buyer's Broker).
Discuss Compensation Real estate agents have the option of working for buyers, sellers, or both, depending on your request for services, their background and training, and company policy of their agencies. The 'customer' status means that the real estate agent will represent the home sellers (Seller's Agent) and will not be able to negotiate on your behalf or provide advice to help you make comparisons and get the best price and terms. The 'agency choices' option should also trigger a discussion about fees for services. Generally speaking, home buyers use the services of real estate agents who are compensated for their services, primarily by commissions built into the sale price of the home, whether the agent works on their behalf or the seller's. While it may not seem like the buyers have to pay commissions and the services of agents are free, it is important to remember that the buyers do bring all of the money to the closing table that covers the price of the home AND the commissions. Many real estate agents who represent buyers receive their fees from the commissions set aside for the Listing and Selling sides of the transaction. This means that home buyers do not have to pay anything extra to have an agent represent their interests and, perhaps more importantly, do not have to accept the 'customer' status of having two agents who are working for the seller involved in the sale. Home buyers should take advantage of the Selling side commission that is built into the price of the home and make the effort to get an agent to represent their interests. The Selection Process Savvy home buyers also know that they have the right to interview agents to see how they will perform for them and to change agents if they are not satisfied. The variety of services available, the different skill levels and training of practitioners, and the company policies of the firms they work for all play a role in how your needs will be met.You may hear someone say that they met the agent at an Open House or called the Listing Agent about a particular house and that is how they found an agent. Since it is not uncommon for new agents or part-timers to conduct Open Houses and do "up-time" answering the phones at the real estate offices, they may end up with someone who hasn't had much experience. A better approach may be to look for someone who specializes in helping buyers and to do an interview to learn about 'agency choices' and what to expect from the agent. The emergence and growth of buyer agency has prompted many traditional agents to declare themselves even though they practice dual agency. The consumer advocates are in agreement that home buyer should beware dual agency as they lose important rights when as agent ends up working as a facilitator and cannot have the agent exclusively on their side of the transaction. |
