When someone decides it is time to sell their home, they interview several REALTORS® from different companies to determine which one is best for them. They want someone who will represent them and someone they feel will do an effective job at marketing their home. However, when someone decides to buy a home, they usually end up with their REALTOR® through sheer accident.
Why don’t homebuyers search for a REALTOR® the same way that homesellers do?
Instead, homebuyers usually end up with a REALTOR® as a result of answering an advertisement. The advertisement will give a brief summary of a home available for sale along with the price, but it says nothing at all about the REALTOR®.
You see, there are two "sides" to every sale. The seller's side is represented by the listing agent. The buyer's side is represented by the selling agent. The selling agent can also be referred to as the buyer's agent. Selling agents (buyer’s agents) do not usually list very many homes for sale. They deal mostly with homebuyers. Selling agents "sell" the homes that are placed in the Multiple Listing Service by the listing agents.
Most agents concentrate primarily on one side or the other. This is not a "hard and fast" rule. There are also agents who split their time equally between buyers and sellers. Often, these are the very best REALTORS®. The fact of the matter is, if you are buying a home who do you want on your side? A REALTOR® who deals primarily with sellers? Or one who deals mostly with buyers?
If you call on a single classified advertisement in a newspaper, an ad in one of those home selling magazines, or a listing on the internet, you are most likely calling the listing agent.
First, very few people actually buy the house they call about.
For argument's sake, suppose that you call the REALTOR® who is listing the property you "might" be interested in. It turns out that the house is absolutely perfect and affordable and you want to make an offer. Do you want the same agent who represents the seller to also represent you?
When you make an offer to buy a house, you are entering a negotiation. The seller wants as high a price as possible and the buyer wants the lowest price possible. Plus, there is more to buying a house than just settling on a price. If a REALTOR® represents both sides, there is a potential conflict of interest, although an ethical REALTOR® can often equally represent both sides. In such a case, however, the agent becomes more of a transaction facilitator than an agent working actively on behalf of either the buyer or seller.
You must keep in mind that there are times when it might not work out, too. The listing agent may choose to represent only the seller and that would leave you without your own advocate.
Most real estate transactions go fine, but almost every one has a challenge or two. These challenges are often routine, but sometimes not. Because the agent has divided loyalties, one side or another may doubt where those loyalties truly lie. Mistrust develops. This can take a small problem and blow it way out of proportion. At that point it becomes a crisis.
Having an agent on your side as your advocate removes the mistrust and helps keep things on an even keel. If a challenge develops, you know where your agent stands.
Plus, the seller pays for it -- you don't.
Listing agents place ads for several reasons. First, they need to show the seller that they are doing something to sell their home. Second, by showing how much they advertise, they can also attract other individuals who are thinking of selling their homes.
They point to their ads to show their clients that they are aggressively marketing the property. When other home sellers constantly see ads from a particular REALTOR®, they are inclined to want to list with that REALTOR®, too. So even though the ads look like they are directed toward home buyers, they often have another purpose. To attract home sellers.
What sellers don't realize is that a listing agent's true marketing emphasis is directed toward other REALTORS®, not the general public. Their main goal is to convince the selling agents (buyer's agents) to find buyers and make offers. This is a good thing because if you are selling a home, you want as many REALTORS® as possible bringing buyers around to take a look. Most of a listing agent's marketing efforts toward other REALTORS® are invisible to the general public, but it is where an effective listing agent does a home seller the most good.
Selling agents (buyer's agents) do advertise homes for sale in order to attract buyers. Although the ads do market a specific property, they are mostly intended to attract buyers in general -- not a buyer for that specific property. The agent would be happy if you did buy the property you called on, but it happens so rarely that they do not expect it.
What happens when you call on a real estate ad is that you often schedule an appointment to go look at the advertised home. While you are out looking at that home, you will probably want to look at others -- so the agent will show you a few other homes, too. Eventually, you and the REALTOR® will zero in on what you need and like in the proper price range and you will make an offer.
That is how most buyers find their REALTOR® -- by "accident."
Actually, the best thing for you to do when you see an advertisement in the paper is to call your own REALTOR® and tell them about the ad. Since addresses usually do not appear in advertisements, your REALTOR® will call the listing agent and find out the MLS number for the property. If the listing is on the internet, it probably already provides the MLS number.
The house may turn out to be a great home for you, but it may also be a property the REALTOR® has already disregarded because it backed up to a busy noisy street and you have told your REALTOR® you wanted a quiet neighborhood.
First you have to have a REALTOR® you can call. How do you find one?
Referrals are always a good way to go. Perhaps a friend, co-worker, or family member recently bought a house in the same community and had a good experience. However, if they bought a house twenty miles from where you want to move, it may not be a good idea to use the same REALTOR®.
You want an agent who knows the area in detail and has already previewed many of the homes available for sale in that community. Community knowledge should be important to you because you are not just buying a house. You are buying a home in a local neighborhood in a specific community.
Every REALTOR® can show you every property available for sale in the Multiple Listing Service. Since that is true, you can call any real estate office and find a REALTOR® willing to show you houses for sale. The problem is that you do not know if you are talking to an excellent REALTOR® or a lazy inactive one.
Your first step should be to shop for a REALTOR®, not to shop for property. Shop for a REALTOR® the way you would shop for a good attorney, accountant, mechanic, plumber, doctor, financial advisor, or other professional.
Now that we have the Internet, you have more information at your fingertips than buyers from the past. The web is a good place to start. There are lots of directories that list agents, plus search engines, too. Peruse the sites. If an agent has lots of information on their site and seems genuinely concerned about informing homebuyers, that's probably a better choice than someone whose web site only talks about how good they are.
The client should be the focus, not the agent. At the same time, agents have to market themselves -- or else you won't notice them.
Imagine that automobiles are sold like real estate, with no more car lots or dealerships. Both new and used cars are just parked on the street. So if you want a Ford, there are no more Ford dealerships. No more Lexus dealerships or any other kind of dealerships, either. If you want to look for a car on your own, you just drive around and see what you can find. Even then, you can only look at the outside, because you don't have the keys.
There are some people that have the keys. They also have a computer that tells them where all the cars are parked, what model and year they are, what size engine they have, and how many miles are on the odometer. They get paid a commission for selling the cars.
Some of these commissioned agents just sit around and look at the computer, waiting for the phone to ring. Some of them go out and locate the new cars, physically inspect the interior and exterior, and flip on the ignition to listen to the sound of the engine. They are interested in finding the best cars so their customers refer future clients to them.
Who would you rather call?
One way to find candidates to interview is to talk to professionals from real estate related professions and ask their opinion. If you know someone who is employed as an escrow officer, title representative, homeowners insurance salesman, or loan officer, they will be able to recommend REALTORS® from the area they work in.
If you talk to a loan officer, be sure it is someone who deals primarily with purchase money first trust deeds and mortgages instead of refinances, second trust deeds, or finance companies. Since the latter do not deal with REALTORS® on a regular basis, they will not know who to recommend.
You could just make phone calls to real estate offices and ask questions. Ask the manager to recommend someone or ask a REALTOR® who he/she would recommend from another office. This will be a little tricky because the REALTOR® you ask will be "giving away" a commission, but you will find out who they respect as a competitor.
A new alternative to finding a REALTOR® is the internet. Look for REALTORS® who advertise themselves, not property. That way you have a pretty good idea you are getting a "buyer’s" agent instead of a listing agent. Look to see if their web page offers something to you in the way of information or other services instead of just telling you they are "number one." You want someone of value to represent you, not someone who is full of "puff."
When you interview REALTORS® for the job, you want someone who will be concerned about you and will take care of your interests. You want someone who demonstrates ready knowledge of homes available for sale and does not have to call you back after they "check on the computer." This ready knowledge demonstrates they have actually been out previewing homes and don't just sit around waiting for the phone to ring.
You also want someone sharp enough to ask you questions as well, including your financial and debt information. By asking these questions, a good REALTOR® will be able to determine the proper price range you should be looking in. By asking about your family, an agent will be able to tell if what you need in a home is something available in your price range. You want a REALTOR® who is bold enough to talk straight with you instead of always telling you what you want to hear.
Finally, any decent agent will always ask for an appointment to meet with you, too. It is only natural, since they earn their living by commissions. However, REALTORS® are also supposed to act as your agent, looking out for your interests before their own. You want a REALTOR® who takes that responsibility very seriously. If someone seems too much like simply a salesman, then maybe you should look a little further.
© Copyright 2006 by Terry Light and RealEstate ABC
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