Real estate agents are a great resource as long as buyers understand what agents do and who they represent. It can get a little complicated — so here are some tips to remember. 1. Sellers are represented by listing agents while buyers, of course, get buyer agents. Most agents act in both capacities and probably have clients on each side of the roster at any given time. Be sure you know whether the house your buyer agent is talking up as a “perfect 10” is one of his or her listings. If it is, it is called dual agency — one agent representing both sides of the deal — and it needs to be disclosed to all parties.
2. The real estate agent at an open house may be the listing agent who has the contract to sell it or it could be a buyer agent who is doing the open house to drum up new business. While open houses can be a good way to connect with buyer agents, remember the seller of the home will be told anything you say during that open house — because that is who the agent represents at that moment. Only if you take them on as your buyer agent, do you get the protection of confidentiality.
3. Buyer agents do not work for free so while they may show you a few houses without a contract, they soon will want you to sign an exclusive right-to-represent document. It is not as restrictive as it sounds. You set the length of time and write in other terms and conditions. It means your agent is paid a commission — most of the time by the seller — on any house you buy during the contract. It may also cover houses you see while the contract is in force but purchase after it has expired.
If you don’t want it to cover houses you see on your own, such as for-sale-by owner properties that may not pay an agent commission, write that into the terms. If you do not want to see dual agency houses note that in the contract.
4. Successful real estate agents form groups, bringing in less experienced agents and assistants to expand their business. So you might not actually deal with that group’s big-name experienced agent, who has moved into more of a management position. If you are looking for that special, experienced agent to guide you personally, ask friends and family for recommendations of someone who practices on their own.
5. If you choose to go house hunting without a buyer agent you still can get help filling out paperwork. A listing agent does not have to declare dual agency if they do only ministerial actions, such as helping a buyer fill out a sales contract. The listing agent cannot give any advice, such as how much to offer on the property, but they can make sure — and it is to their sellers’ advantage to make sure — the contract process flows smoothly to settlement.
