Thursday, January 25, 2007

Home Buying Process (2): Finding a Realtor®




1. Why do I need an agent? I can find listings on the internet. And can’t I save money by dealing just with the listing agent?

With so many internet search engines yes, you could probably find a home, though a Realtor can help you find it faster and avoid finding the wrong one.

But finding a home is only the first part of a long process where the benefits of representation really pay off. (To follow.) Note Buyer Agency wasn’t codified into Oregon law until 1994, and was done so then because so much of a transaction leaned to the side of the seller. Get representation!

As to saving money: not likely. Yes, some listing agents will drop their commission if they represent both the buyer and seller, but there are three parties who want part of that savings: The buyer (you), the seller and the agent. The agent is usually the big winner, especially because any savings a buyer may glean could possibly have been negotiated by someone representing only the buyer’s interest.

Incidentally, most good agents I know will represent both buyer and seller (dual agency) only in perfect circumstances, say a mother selling to her son. There are just too many legal pitfalls in representing one party in whose interest it is to get the highest possible price and another whose interest is paying the lowest.

Can’t say it often enough: Get representation!

[Side bar: A number of internet based companies have introduced models which, in return for using their services, part of the buyer’s agent commission is rebated to the buyer. That’s illegal under Oregon law.]

2. OK, ok, ok! How?

Interview. Remember an agent is being paid for his or her services, and in a very real sense it’s the buyer that does the paying because it’s built into the price of the property. You deserve the best.

Now I suppose I should offer a litany of appropriate questions – here are some good ones (ht Rain City Guide) – but that misses what should the point of the interview: Connect.

I’m a big believer in intuition. If you trust it, you can tell more about a person in ten minutes face-to-face than you can from a hundred emailed well rehearsed answers to standard questions. If you have to be talked into liking someone, it’s probably the wrong person.

You’re looking for three things: Honesty, knowledge, and dedication.

Honesty: Agents are bound by law and ethics to customer loyalty, which broadly means your needs supersede any needs of the agent. Most agents are intensely faithful to that; some, though, will walk you through home with higher commissions and bonuses first. You must be able to trust!

Knowledge is more than just knowing the market and the idiosyncrasies of a transaction; it’s knowing people. Believe it or not, you may not know exactly what you want. Just by watching, a good agent can narrow the focus after no more than a dozen homes, and often can tell you’ve found the right home even before you do! So concentrate not just on the answers you’re getting to questions, but the questions being asked of you.

Dedication. A good buyer’s agent rarely works with more than four or five active (i.e. ready to buy) buyers at a time; more than that stretches the ability to properly serve each. Make sure the agent will be there throughout the process: a great deal of the work comes after the sale agreement is signed!

3. Anything else?

Yes. Loyalty works both ways. Find a good agent and stick with that agent. Many will ask you to sign a Buyer’s Agent Agreement, as much a guarantee to you that you’ll be given full attention as any agent benefit. Good agents will always ask “Are you already working with an agent?” in the first thirty seconds of a conversation, and the absolutely most certain way of diluting the quality of your representation is to work with several agents simultaneously. Loyalty pays!

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