Buyers and sellers often enter the market with misconceptions about real estate agents \u2014 how they work, how the process works and what the agency relationship is all about. It\u2019s helpful to point out, without getting too far into the weeds, that in any one real estate transaction, there are most likely two agents: one for the buyer and one for the seller. Here are five myths (and five truths) about working with both buyer\u2019s and seller\u2019s agents.<\/p>\n
Most people assume that their agent is pocketing the entire commission. That would be nice, but it\u2019s just not accurate.<\/p>\n
First, it\u2019s helpful to know that the seller pays the commission, and they split it four ways: between the two brokerages and the two agents. Finally, the brokerage commission isn\u2019t fixed or set in stone, and sellers can sometimes negotiate it.<\/p>\n
If you\u2019re a seller, you sign a contract with the real estate agent and their brokerage. That contract includes a term \u2014 typically six months to a year. Once you sign the agreement, you could be stuck with their agent through the term. But that\u2019s not always the case.<\/p>\n
If things aren\u2019t working out, it\u2019s possible to ask the agent or the brokerage manager to release you from the agreement early. Buyers are rarely under a contract. Buyer\u2019s agents work for free until their clients find a home. It can be as quick as a month, or it can take up to a year or more. And sometimes a buyer never purchases a house, and the agent doesn\u2019t get paid.<\/p>\n
Before jumping into an agent\u2019s car and asking them to play tour guide, consider a sit-down consultation or a call, and read their online reviews to see if they\u2019re the right fit. Otherwise, start slow, and if you don\u2019t feel comfortable, let them know early on \u2014 it\u2019s more difficult to break up with your agent if too much time passes.<\/p>\n
Today\u2019s buyers get most things on demand, from food to a ride to the airport. When it comes to real estate, buyers now assume they need only their smartphone to purchase a home, since most property listings live online.<\/p>\n
First-time buyers or buyers new to an area don\u2019t know what they don\u2019t know, and they need an advocate. The listing agent represents the seller\u2019s interests and has a fiduciary responsibility<\/a> to negotiate the best price and terms for the seller. So working directly with the selling agent presents a conflict of interest in favor of the seller.<\/p>\n An excellent buyer\u2019s agent lives and breathes their local market. They\u2019ve likely been inside and know the history of dozens of homes nearby. They\u2019re connected to the community, and they know the best inspectors, lenders, architects, and attorneys. They\u2019ve facilitated many transactions, which means they know all the red flags and can tell you when to run away from (or toward) a home.<\/p>\n Many people think that all agents are created equal.<\/p>\n A great local agent can make an incredible difference, so never settle. The right agent can save you time and money, keep you out of trouble and protect you. Consider an agent who has lived and worked in the same town for around ten years. They know the streets like the back of their hand. They have deep relationships with the other local agents. They have the inside track on upcoming deals and past transactions that can\u2019t be explained by looking at data online.<\/p>\n Compare that agent to one who is visiting an area for the first time. Some agents aren\u2019t forthright and might be more interested in making a sale. Many others care more about building a long-term relationship with you because their business is based on referrals.<\/p>\n In a previous generation, sellers who wouldn\u2019t deal with any agents tried to sell their home directly to a buyer to save the commission.<\/p>\n Smart sellers understand that real estate is complicated and that most buyers have separate representation. And many FSBO sellers<\/a> will offer payment to a buyer\u2019s agent as an incentive to bring their buyer clients to the home. If you see an FSBO home on the market, don\u2019t be afraid to ask your agent to step in. Most of the time the seller will compensate them, and you can benefit from their knowledge and experience.<\/p>\n","protected":false},"excerpt":{"rendered":" Buyers and sellers often enter the market with misconceptions about real estate agents \u2014 how they work, how the process works and what the agency relationship is all about. It\u2019s helpful to point out, without getting too far into the weeds, that in any one real estate transaction, there are most likely two agents: one […]<\/p>\n4. One agent is just as good as the next<\/h2>\n
Truth<\/h3>\n
5. You can\u2019t buy a for sale by owner (FSBO) home if you have an agent<\/h2>\n
Truth<\/h3>\n