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Are you tired of renting and instead are thinking of buying a home of your own? The next step is to find a real estate agent. Agents act as your advocate throughout the home purchasing process, ensuring that your wants and needs are satisfied. However, there are some things you should know prior to the transaction so you’re prepared for the process. Here are a few details your agent would like you to know.
They Work on Commission
You will rarely find a real estate agent who is a salaried employee – generally, they work on commission. Basically, this means that they don’t get paid unless the transaction closes and is completed. An agent’s commission normally ranges between 3-6% of the purchase price of the property. Sounds like easy money right? Not really. There are no set hours agents have, so they’ll most likely be working days, nights, weekends, and holidays to ensure that you see the listings available and find the home you are looking for. There are also risks involved – should a transaction fall through due to inspections, lack of funding, cold feet, or any other various reason, they won’t be paid.
You’re Not Their Only Client
A good real estate agent will be sure to work around your busy schedule and be available when you need them. With that said, it’s important to be courteous regarding appointments and scheduling. If you have an appointment to meet your agent for a showing at three o’clock, you should be there at three o’clock. Take into consideration that they may have other clients that they need to meet as well.
Open House Protocol
Touring open houses is a great way to get a feel for a home and its neighborhood, however, be aware that there actually is an open house protocol that should be followed. Typically going rogue and touring open houses without your agent is frowned upon, so it’s best to have your agent set up the showing and be by your side as your representation. If you do happen upon an open house without your agent, be sure to let the hosting agent know that you are already working with someone. An open house is a no-poaching zone in the ethical world of real estate. If you have any questions about the home or the seller’s motivation for selling it, have your agent ask as their experienced approach surely won’t offend the sellers.
Understanding a Buyer's Broker Agreement
There are many different buyer broker agreements used, but there are three which are most commonly used. These are Non Exclusive/Not for Compensation, a Non Exclusive/Right to Represent, and the Exclusive Right to Represent. The agreements were created so that the buyer and the agent have a clear understanding of their working relationship. Your agent may want you to sign an Exclusive Right to Represent to make it clear that you have a contract to solely work with them and no other broker or agent, or they may have you sign a Non Exclusive/Not for Compensation to allow you the freedom to work with multiple brokers or agents. No matter the agreement, be sure to read it thoroughly and ask any question you may have up front to ensure that you have a clear understanding of the terms of your contract. Be sure to discuss the termination clause. You should have an agent that will agree to release you from the buyer’s broker agreement in the case that you may not be satisfied with their services. The agent is not required to release the contract, however, if it’s not a good fit, any ethical agent will. It’s all about communication, and the agent needs to know your expectations and you’ll need to know what their services entail. Don’t be afraid to ask.
Your real estate agent will act as your advocate in one of the largest transactions of your life. The better prepared you are for the process, the smoother it will go. What do you look for in a real estate agent?