One agent...buyer's advantage

By
Real Estate Agent with Associated Brokers Of Pagosa
I am not sure that the general public understands the way in by which REALTORS® get their business and are paid. I don't mean that as an insult to anyone. Before I bought my first house or obtained my real estate license I was definitely in that category. I often get sideways looks when during conversation someone finds out that I am not a salaried employee of my broker, and that I indeed do not get a paycheck until I successfully help someone buy or sell real estate. Additionally, there is a lack of understanding when it comes to who pays who upon the closing of a property, or there are a lot of people out there who simply don't care. During the Christmas break I ran into one such confused couple.

   While entering a Mexican restaurant/Sports bar/Karaoke club (got to love small town conglomerates) I received a call about one of my listings in Pagosa Lakes. The lady on the phone and I begin the home buying question answer routine...."Who's the builder?" "What are the taxes?" "Is the plumbing copper or poly?" "How big is the lot?" " Is it 2 baths or 2.5?"- I reached into my mind to remember the details of the property and also gave her advice on 2 other homes in that subdivision and a place in one other area. During the conversation she dropped a few hints that she had been in a house or two, so I asked her if she was working with another REALTOR®. She said that she had been shown a home by an agent but that she was not committed. During that showing she had picked up a flyer and called another REALTOR®, and also picked up my flyer and called my office and spoke with Jon my associate. Now she is talking to me. For those of you keeping count, I am the 4th real estate professional (that I know of) that this couple has been in contact with in 48 hours!

Let me be clear hear. Without proper paperwork between a customer and any broker, the sky is the limit in communication with different real estate agents. She did not violate any ethical rules. I am a firm believer that there are ethics, and then over and above that, THERE IS THE RIGHT THING TO DO.  Let's take this beyond the theoretical and dive into the practical.

3 Reasons to be loyal to your real estate agent

1- By building relationship your needs and desires are known.

Flying through the ranks of agents without giving proper time to any one person severely depletes you chances of truly having your needs understood. Anyone who has spent a week previewing homes with a single agent knows this. The homes being shown on day 3 more than likely fit your needs a lot better than the first 3 homes you were in. Each feature that you like or dis-like is mentally bookmarked by a good agent, and put into the decision making process for future choices. It just makes sense that you would not want to re-set this process of relationship building over and over.

2- The commissions are the same.

This is a big factor with many. Here is a simple breakdown of how real estate commissions are paid.- Someone selling a home contracts with a Listing Broker to help them sell. There is an agreement of commission percentage between the two parties. For my example we will use 6%. That means probably 3% goes to the Listing Brokerage and 3% goes to the Selling Brokerage, assuming there are 2 agents involved. If there is only one agent involved there is still  a 6% commission paid. Sometimes a Listing Broker may give a discount for services if he or she is handling both sides of the transaction. This would be done with the Buyer's permission. Usually the commission is paid by the Seller. That means, as far as commission goes, it makes no financial difference to use an agent to go to bat for you while  purchaseing a home....which takes me to my next reason-

3- By having a REALTOR® work on your behalf you have an advocate in the process.

By choosing an agent that you can work well with and sticking with them, you will have a professional to help you in every step of your home purchase. It's not just about working through price and signing on the line. It's negotiation, understanding offers, counter offers, purchase contracts,  lending, inspection issues, addendums and disclosures. It's having the research savvy to quickly and with certainty find out about taxes, land information, utility issues, county records, liens, parcel history, sales history and survey information. It's having the experience to know about HOA issues, special assessments, CIC documents, the ever-changing price of utility services and the many many named fees of our beloved water and sanitation service!

This is just 3 of the many ways that it benefits you, the buyer, to find a trustworthy agent  and give them that trust to help you in your home buying process. Seek out an individual who has character, knows the area in which you are looking and you find easy to communicate with. Then lean on them as your agent and let them know that you believe in them. Working this way, you will discover far better results than dialing the number printed on every sign you pass or flyer you pick up.

Comments (9)

Bryan Washington
Keller Williams Realty, Eugene & Springfield - Eugene, OR

This is GREAT Stuff...and as an ABR, I believe in Exclusive Buyer Agency 100% of the time.

You definitely have your best interests served when you work with a Buyers Agent.

Jan 07, 2008 09:30 AM
Jim Albano
Prudential Damiano Realty - Little Falls, NJ
Team - Jean-Marie Vantuno / Realtors North Jersey Real Estate
Excellent post. It far to often that people shopping for homes call a multitude of agents (usually the one on the sign) instead of working with one dedicated agent. I don't really understand the thinking but perhaps they think they'll get a better deal by dealing with an agent who listed the property?
Jan 07, 2008 09:34 AM
Adam Brett
The Adam and Eric Group - Fullerton, CA
The Adam and Eric Group, Fullerton's Finest
I ama  very loyal person and expect the same.  However, it is my job to take someone away from their agent if they show up in my open house or call me for any reason.  If their agent was doing their job, there would be no reason for the buyer to call me.
Jan 07, 2008 09:43 AM
Rick Grand
nowhere - Eugene, OR
definitely a good blog. A lot of people don't understand how it all works. I love how they have contacted at least 4 brokers, you would have to wonder just how serious they are about who they work with and I wouldn't want to invest too much time just to find out they went with broker C. It seems that a lot of people in the public don't value our time and what we do for them. Would you want me to come into your work and take up 3 weeks of your time and then go elsewhere? You would want to be paid for your time. Loyalty! Pick an agent you are comfortable with and stick with him/her.
Jan 08, 2008 01:36 AM
Rick Tourgee
Robert Paul Properties, Inc. - Provincetown, MA
Provincetown and Cape Cod
I went through the courses to obtain my ABR accreditation, I now only with with Buyers under a contract to hire my services!  When I get a cal on a listing, I give the basic information on the property, then I go into my elevator pitch for an Exclusive Buyers Agreement.  if they continue to push for more information and finder details on the property, I explain that the finer details are for Buyer Clients as it is not fair to my current Exclusive Buyer Clients.
Jan 08, 2008 01:53 AM
Dena Stevens
Rocky Mountain Realty - Canon City, CO
Putting The Real Into Realtor Since 2004

Great post Chris, but I found this interesting. "For my example we will use 6%. That means probably 3% goes to the Listing Brokerage and 3% goes to the Selling Brokerage, assuming there are 2 agents involved."

On our MLS there is a little box that says variable commission. I always look at that - never assume it's a 50-50% deal. We even have listing agents who will not pay TB's, keep your eyes open!

Jan 08, 2008 05:38 AM
Chris Liverett
Associated Brokers Of Pagosa - Pagosa Springs, CO
Pagosa Springs Real Estate
Dena- Yes you are so correct!  Thats why I was sure to use the word "probably" I see this occasionally. I feel that it is a matter of duty to be a little more balanced with my colleagues than to give a variable, and so far the majority of our area agents feel the same way... good reminder to keep your eyes open- Thanks!
Jan 08, 2008 02:19 PM
Sandra Carlisle (Ayers)
Berkshire Hathaway California Properties - Newport Beach, CA
Real Estate Marketing & Sales

Great post!  But if I could add the following...

1.  If you were going into a lawsuit, would you walk in the day you went before the judge and ask the attorney representing the other side to defend you as well?  This is probably one of your biggest investments and someone should be on your side.  Believe me, YOU WILL PAY MORE than any commission cut the listing agent will give the seller.  The listing agents job is to get the most amount of money for the seller.  (And if they say you will get a better deal from them, they are screwing their seller and will do the same to you!)

2.  Let say you are working with multiple agents and everyone you are working with knows it...

You find the home of your dreams and you open escrow and the agent is ecstatic that he has something in escrow in this market.  You have the inspector out and "Uh Ohh," something is wrong.  There appears to be a crack in the foundation.  Is it serious or minor settling.  The inspector wont's say much beyond recommending another inspection by a structural engineer.  Your agent, working under the circumstances you set up by working with multiple agents has a couple of options.

He could risk losing the deal and potential paycheck by telling you the truth.

Or he might think, "I don't want this to fall out and who knows if this Yahoo will buy from me again or go with the other guy."  I think it's just some minor settling and a LOT of homes have cracks in the foundation.  Don't worry, we pay the inspector to be scary and find everything.  See, he even said that an electrician should come out to install that silly GFCI switch, you can get one at Home Depot for $7.  This home has been standing for 40 years without anyone getting electrocuted, same goes for the foundation, the home is still standing.  He just doesn't want to get sued and is covering all his bases.

3.  You work exclusively with ONE agent!

When the inspector finds a serious issue, you get honesty in return.  "If you love the home this much, let's get that structural engineer out here.  If it's nothing, you don't have to worry about it, if it's serious, we can solve that problem or walk away.  NOT A PROBLEM!!!"

The funny thing about working with one agent is that, if you really like a neighborhood and nothing is available that works, they will actually mail in and door knock to find your home!  Why??  Because they aren't spinning their wheels always trying to find that "Right Now" "Hope he picks me" buyer.  They have time to SERVE you and actually CARE about you!

Jan 19, 2008 02:21 PM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor
A great post Chris!  It should have a nice, shiny gold star!   I know that many people feel that working with the listing broker will save them money in the form of a lower commission which then goes into their pocket, but it usually costs them money!
Jan 22, 2008 01:44 PM