Who works for you?
Before you know the answers, you have to consider the questions!
Finding answers is easy. Sometimes we find right answers, sometimes we find answers that are wrong. When you are involved in a real estate transaction right answers are important. But it’s not very helpful to have the right answers to the wrong questions!
One of the most under-estimated and overlooked questions facing real estate buyers and sellers is “How will you approach your purchase or sale?” It’s not a hard question, but it is a big one!
Your approach includes the role of agencies and agents. Understand that as a buyer or seller you are not required to work with any particular agent except the one you choose.
Another often unasked (and therefore unanswered) question is “How are you going to choose that agency and agent?” Here’s one example of what can happen when you don’t.
Let’s say you are considering purchasing a home… you see one of interest and there’s what we call a “rider” on the sign encouraging you to call the listing agent. Before you dial that number, be aware that it’s overwhelmingly likely the listing agent represents the seller of the home. Do you know what that means? For one thing, it means that agent must put the seller’s interests above everyone else’s-including yours-unless or until you become his or her client.
Let’s say in the course of talking with that agent you happen to mention that you “can spend up to $150,000.” You discover this home is listed at $149,000. If nothing changes… you look at the home and decide to offer $140,000. Don’t forget the agent you are dealing with represents the seller… when he or she presents the offer he has to put the seller’s interest first. Do you suppose he or she might tell the seller, “Well, they’re offering less, but the told me they can spend …”
Of course the agent is supposed to tell you clearly that he or she represents the seller, but when buyers get excited they don’t always hear things and don’t always consider all the implications.
The point of this is not to frighten anyone or to make things complicated. The point is to encourage you to ask yourself (and any prospective agent) the right questions. Those questions include who is working for you and how they will do it. Those questions are best asked before you start looking at specific properties.
The good news is the state of Maine has helped us make this very simple. In rather plain language, if you do not have a written agreement with your agent/agency you do not have someone working on your behalf. In the above example, an agreement with your agent would “prevent” him or her from disclosing your confidential information. By the way, don’t let the idea of a written agreement frighten or intimidate you. Just as you are not required to work with a particular agent, you are not required to sign a “standard contract.” You and the agent you chose should work out the details of your agreement together. You should clearly understand any agreement you sign.
Much of this is explained clearly on the one page “Real Estate Brokerage Relationships Form” developed by the Maine Real Estate Commission for consumers.
There is plenty of general advice out there regarding how to select an agent… some of it is very good and some of it isn’t! But remember that it starts with a concious decision to choose an agent – do not just stumble on to one!