Which Level of Service Do You Choose?
When it’s time to buy a home, you have choices—not only in the type of property you want to purchase, but also in the real estate professional you select to assist with your transaction. Your relationship with an agent can take many forms and it’s important to understand the differences in the services you will receive. Each state sets it’s own rules regarding how a customer or client relationship is established and each agent has some latitude in defining what services are (or are not) included.
Most real estate agents earn their living by representing buyers and sellers in property transactions. While commission rates and/or terms vary from one listed property to another, there’s no question about which agent and brokerage firm is representing the sellers. The yard sign alone makes that clear.
However, problems can surface on the other side of the transaction if a buyer (intentionally or unwittingly) does things that lead two different agents to believe they are representing that buyer. Examples include:
- A buyer has been searching for homes with
an agent’s help. On impulse, he attends
an open house and starts talking to the
hosting agent about what kind of home he
is searching for, failing to mention that he is
already working with another agent.
- A couple, early in their home search,
notice two different houses for sale with
two different agents. They call each agent,
asking to see the homes.
In each of these cases, a buyer has demonstrated purchasing interest with more than one real estate agent. depending on other details of the circumstances—and how your province or territory defines the way agency relationships are formed—it is possible that a dispute could arise between agents regarding who should receive a commission if the buyer proceeds with a purchase. This is one reason why it’s in everyone’s best interest, including yours, to shop for an agent before you shop for a home, and to formalize your relationship with a signed buyer representation agreement. In return for providing these services and assisting you with various transaction details, buyer’s agents expect you to remain loyal to them, making it clear to any other agents that you are already being represented.
Agency relationships are based on mutual consent, so if your buyer’s representative isn’t living up to your expectations, you can cancel the agreement. Most importantly, you should discuss expectations early on. Each buyer’s agent has their own style and preferred way of working with clients. And each agent has their own buyer’s representation agreement, outlining their obligations to you and what they expect in return. Taking time to discuss shared expectations at the beginning of your relationship is the surest way to avoid misunderstandings and form a strong partnership—one that allows your buyer’s rep to serve you to their greatest ability and help you achieve the best possible result in your home purchase.
Reasons to Hire an ABR
Buying a home is unlike any other purchase. Before attempting to do this on your own, consider why it’s smarter to work with an Accredited Buyer’s Representative (ABR®).
- A skilled professional will be covering your back.In real estate transactions, having representation (either as a buyer or seller) means that an industry professional is obligated to protect and promote your interests, including keeping certain information confidential and sharing information with you that might benefit your position. Accredited Buyer’s Representatives have gone a step further, completing specialized training in the best practices for buyer representation. An ABR® designee stands out in the crowd!
- You’ll simplify many complex aspects of your transaction.Let’s face it. If you aren’t already familiar with complex real estate contracts, disclosure forms and mortgage applications, these documents can be confusing and daunting. Most buyers genuinely appreciate having a knowledgeable resource to answer their questions.
- You’ll be working with an up-to-date expert.An ABR® designee has a keen understanding of buyers’ concerns. Further, they are committed to maintaining their professional edge by staying current on the latest issues and trends in buyer representation.
- You’ll know your buyer representative has proven experience.One qualification of earning the ABR® designation is proof of completed transactions with other homebuyers. It’s impossible for an inexperienced real estate agent to obtain the ABR®.
- You can improve your negotiating results.Deciding on an offer price for a house is tricky business, requiring careful analysis of other comparable homes for sale, recently sold homes, and other market factors. Plus, your offer price is just one facet of your negotiating strategy. An ABR® designee can advise you on every negotiating detail, including counseling you on the pluses and minuses of including various contingencies.
- You can get a higher level of service without paying more.In the vast majority of circumstances, listing agreements are structured so that a buyer’s agent’s commission is paid out of the seller’s proceeds. In the rare instance where this is not the case, you still have options. ABR® designees can explain those options before you begin your home search, helping you make informed decisions if you encounter such a scenario.
Some information obtained from and used with permission of REBAC