Why Search for a Realtor®?
When someone decides it is time to sell their home, they interview several Realtors® from different companies to determine which one is best for them. They want someone who will represent them and someone they feel will do an effective job at marketing their home.
However, when someone decides to buy a home, they usually end up with their Realtor® through sheer accident. Why don't homebuyers search for a Realtor® the same way that homesellers do?
Instead, homebuyers usually end up with a Realtor® as a result of answering an advertisement. The advertisement will give a brief summary of a home available for sale along with the price, but it says nothing at all about the Realtor®. The ad also does not say whether the property backs to a busy street or if the "ocean view" is available only by leaning out of the second story window with a pair of binoculars.
You see, there are listing agents and selling agents. Listing agents are the ones who "list" a home for sale on the Multiple Listing Service, and they deal primarily with sellers. Selling agents or "buyer's" agents do not usually list very many homes for sale. They deal mostly with homebuyers.
Buyer's agents sell the homes that are placed in the MLS by the listing agents.
Most agents concentrate primarily on one side or the other. This is not a "hard and fast" rule. There are also agents who split their time equally between buyers and sellers. Often, these are the very best Realtors®. The fact of the matter is, if you are buying a home who do you want on your side? A Realtor® who deals primarily with sellers? Or one who deals mostly with buyers?
If you call on an advertisement in a newspaper or one of those home selling magazines, you are most likely calling the listing agent. Listing agents place ads for several reasons. First, they need to show the seller that they are doing something to sell their home. Second, by showing how much they advertise, they can also attract other individuals who are thinking of selling their homes. They point to their ads as an example of what they will do to market the house.
What sellers don't realize is that a listing agent's main marketing emphasis is directed toward other Realtors®, not the general public. Their main goal is to convince the selling agents (buyer's agents) to find buyers and make offers. This is a good thing because if you are selling a home, you want as many Realtors® as possible bringing buyers around to take a look. Most of a listing agent's marketing efforts toward other Realtors® are invisible to the general public, but it is where an effective listing agent does a home seller the most good.
One reason listing agents advertise homes in newspapers and magazines is to show their clients that they are aggressively marketing the property. When home sellers constantly see ads from a particular Realtor®, they are inclined to want to list with that Realtor®. So even though the ads look like they are directed toward home buyers, they often have another purpose. To attract home sellers.
Selling agents (buyer's agents) do advertise homes for sale in order to attract buyers. However, they don't really expect you to actually purchase the home you originally call on. They would be happy if you do, but it happens so rarely that they do not expect it.
When you call on a real estate ad, you often schedule an appointment to go look at the advertised home. While you are out looking at that home, you will probably want to look at a few others, too. Eventually, you and the Realtor® will zero in on what you need and like in the proper price range and you will make an offer.
That is one way of finding your Realtor® by accident.
Suppose you call the Realtor® who is listing the property you "might" be interested in and it turns out that the house is absolutely perfect and affordable and you want to make an offer? Do you want the same agent who listed the home for sale and represents the seller to also represent you? The odds are that everything would be okay if you did, but it is risky. It would be like both the husband and the wife using the same attorney to represent each of them in a divorce. A more extreme example would be if you sued somebody and agreed to let the opposing lawyer represent you, too.
When you make an offer to buy a house, you are entering a negotiation. The seller wants as high a price as possible and the buyer wants the lowest price possible. If a Realtor® represents both sides, there is a conflict of interest, though an ethical Realtor® can equally represent both sides. Most Realtors® are very ethical and take their responsibilities seriously. However, If the listing Realtor® knows how much you are willing to pay for a home or the loan amount you have been qualified for, and that information gets somehow passed on to the seller even though they are also representing you as the homebuyer, you are at a disadvantage.
There are other ways that having the same Realtor® represent both sides of the transaction can be a negative as well.
Actually, the best thing for you to do when you see an advertisement in the paper is to call your own Realtor® and tell them about the ad. Since addresses usually do not appear in advertisements, your Realtor® will call the listing agent and find out which property is featured in the ad. It may be a great home for you, but it may also be a property the Realtor® has already disregarded because it backed up to a busy noisy street and you have told your Realtor® you wanted a quiet neighborhood.
First you have to have a Realtor® you can call. How do you find one?
Referrals are always a good way to go. Perhaps a friend, co-worker, or family member recently bought a house in the same community and had a good experience. However, if they bought a house twenty miles from where you want to move, it may not be a good idea to use the same Realtor®. You want one who knows the area in detail, and has already previewed many of the homes available for sale in that community. Community knowledge should be important to you because you are not just buying a house. You are buying a home.
Every Realtor® can show you every property available for sale in the Multiple Listing Service. Since that is true, you can call any real estate office and find a Realtor® willing to show you houses for sale. The problem is that you do not know if you are talking to an excellent Realtor® or a lazy inactive one. Your first step should be to shop for a Realtor®, not to shop for property. Shop for a Realtor® the way you would shop for a good attorney, accountant, mechanic, plumber, doctor, financial advisor, or other professional.
for a Realtor® That Will Represent You Properly.
If you imagine that automobiles are sold like real estate, you can see why you need to shop for a Realtor® of your own. Imagine there are no more car lots or dealerships. Instead of working for dealerships, all car salesman are freelancers, working for anyone. New cars are just parked on streets all over the place and they have "For Sale" signs on them. So if you want a Ford, there are no more Ford dealerships you can go to and look at all the new cars. No more Lexus dealerships or any other kind of dealerships, either. If you want to look for a new car on your own, you just drive around and see what you can find. Even then, you can only look at the outside, because you don't have the keys.
However, there are a group of individuals who have the keys and are hooked into a computer that tells them basic details about all the vehicles and where they are all located. They get paid a commission for selling the cars. Some of this new type of car salesman just sit around with their list hoping for people to call on ads they run. Some of them, however, also go out and locate the new cars, physically inspect the interior and exterior, and flip on the ignition to listen to the sound of the engine. They are interested in finding the best cars so their customers refer future clients to them.
As a buyer, who would you rather deal with? Someone who has a key and a list? Or someone who really expends some effort to make sure they have satisfied clients?
You want someone good working for you.
One way to find candidates to interview is to talk to professionals from real estate related professions and ask their opinion. If you know someone who is employed as an escrow officer, title representative, homeowners insurance salesman, or loan officer, they will be able to recommend Realtor®s from the area they work in. If you talk to a loan officer, be sure it is someone who deals primarily with purchase money first trust deeds and mortgages instead of refinances, second trust deeds, or finance companies. Since the latter do not deal with Realtor®s on a regular basis, they will not know who to recommend.
You could just make phone calls to real estate offices and ask questions. Ask the manager to recommend someone or ask a Realtor® who he/she would recommend from another office. This will be a little tricky because the Realtor® you ask will be "giving away" a commission, but you will find out who they respect as a competitor.
A new alternative to finding a Realtor® is the internet. Look for Realtor®s who advertise themselves, not property. That way you have a pretty good idea you are getting a "buyer's" agent instead of a listing agent. Look to see if their web page offers something to you in the way of information or other services instead of just telling you they are "number one." You want someone of value to represent you, not someone who is full of "puff."
When you interview Realtors® for the job, you want someone who will be concerned about you and will take care of your interests. You want someone who demonstrates ready knowledge of homes available for sale and does not have to call you back after they "check on the computer." This ready knowledge demonstrates they have actually been out previewing homes and don't just sit around waiting for the phone to ring. You also want someone sharp enough to ask you questions as well, including your financial and debt information. By asking these questions, a good Realtor® will be able to determine the proper price range you should be looking in. By asking about your family, an agent will be able to tell if what you need in a home is something available in your price range. You want a Realtor® who is bold enough to talk straight with you instead of always telling you what you want to hear.
Finally, any decent agent will always ask for an appointment to meet with you, too. It is only natural, since they earn their living by commissions. However, Realtors® are also supposed to act as your agent, looking out for your interests before their own. You want a Realtor® who takes that responsibility very seriously. If someone seems too much like simply a salesman, then maybe you should look a little further
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