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Is it time to stop renting and maybe buy a home of your own? The first step is to find a trusted real estate agent. Realtors act as your advocate throughout the homebuying process, making sure your wants and needs are fulfilled. There are a few things you should know prior to the transaction, so you’re better prepared for the process ahead. Here are some details your agent would like you to know:
They Work on Commission
It’s rare to come across a real estate agent who is a salaried employee— generally, they work on commission. This means they don’t get paid unless the transaction is completed and closes. The average commission ranges between 3-6% of the purchase price of the property. If that sounds like easy money, it’s not. Realtors don’t have set hours, so they’ll most likely be working days, nights, weekends, and holidays to ensure that you see enough listings to find the home you’re looking for. There are also risks involved֫—if a transaction falls through due to inspections, lack of funding, cold feet, or any other reason, they don’t get paid.
You Are Not Their Only Client
Top-notch real estate agents will always make an effort to work around your busy schedule and be available when you need them. Having said that, it’s important to be courteous regarding scheduling and appointments. If you have an appointment to meet your agent for a viewing at four o’clock, you should be there at four o’clock. Take into consideration that they may have other clients that they need to meet as well.
Open House Etiquette
Visiting open houses is the best way to get a feel for a home and its neighborhood, but you should be aware that there is some open house etiquette to follow. In general, visiting open houses without your agent is frowned upon, so it’s best to have your agent schedule the viewing and be with you as your representation. If you do visit an open house without your agent, be sure to let the hosting agent know that you already have someone you’re working with. An open house is a no-poaching zone in the world of real estate. If you have questions about the house or the seller’s motivation for selling it, have your agent ask as their nuanced approach surely won’t offend the sellers.
Understanding the Broker Agreement
There are quite a few different buyer broker agreements in use, but there are three which are used most often. These are the Non-Exclusive/Not for Compensation, the Non-Exclusive/Right to Represent, and the Exclusive Right to Represent. The agreements were developed so that the buyer and the agent have a clear understanding of their working relationship. Your agent may ask you to sign an Exclusive Right to Represent to make it clear that you have a contract to work with them solely and not any other broker or agent, or they may ask you to sign a Non-Exclusive/Not for Compensation to allow you to work with multiple brokers or agents. Whichever the agreement, be sure to read it through and ask questions up front to ensure that you have a understand the terms of your contract fully. Make sure you ask about the termination clause. Your agent should agree to release you from the buyer’s broker agreement in the case that you are not satisfied with their performance. If it turns out to be a bad fit, technically the agent is not required to release the contract, however, every ethical agent will. Communication is paramount, and the agent needs to understand your expectations, and you’ll need to understand exactly what their services entail. Don’t be afraid to ask for clarification.
Your Realtor acts as your representative in one of the largest financial transactions of your life. The better prepared you are for the process, the smoother it will go.
If you’d like a recommendation for an experienced, local Realtor—please reach out. I’d be happy to provide you with helpful information.