 Helpful
Real Estate Tips
For more real
estate tips, see our Tips Archive
Buying or Selling a Home with a
Realtor
As
promised this month’s article is helpful tips when Buying and
Selling A Home with a Realtor. I myself have bought and sold homes
FSBO, but I have also bought and sold homes through a Realtor. In
all fairness some of my experiences with both FSBO and with
Realtors were either very good or very bad. Hopefully with the
help of these articles your real estate experiences will be good
ones.
Some Helpful Tips for Buyers
Real estate agents are generally good at what
they do. An agent makes money dealing with buyers and sellers
every day so they have become “experts”. But first I suggest you
familiarize yourself with the agent's perspective.
An agent gets their license and starts selling real estate to make
a living. It is costly and requires many, many study hours and
attendance of classes. They aren't doing it for charity. They only
get paid if someone buys a home and closes on it. A lot of time
and work goes into showing houses, setting up appointments, doing
research, and putting a deal together.
Just like some buyers and sellers Agents too have been burned time
and time again. Since they do this for a living probably even more
so. Some buyers have real estate agents research listings, make
appointments to see houses, show them around town, get them back
into houses a second time, and never even make an offer. Even
worse, sometimes make an offer but with a DIFFERENT agent or a
FSBO. Most buyers don’t realize that if they see a house for sale
with another agent’s name and they have already viewed houses with
an agent, it would be honorable of the buyer to just call the
agent they have been working with. She or he can call that agent
on the sign and arrange an appointment for you. If you call the
agent on the sign on your own that agent would get the full
commission and your agent would get “0” since you did not inform
the agent on the sign that you are working with a realtor. If you
had informed them the commission would be split between the NOW
two agents. If an agent has been running all around town with you,
using their gas, has spent hours looking and pulling listings up
for you, when you ultimately find something that is also listed
YOU should include them! (my own opinion). You should respect
their time.
When dealing with a real estate agent, be sure
to be totally honest with them.
A real estate agent will be more inclined to work well with you if
they know everything about your situation up front. Answer their
questions honestly regarding your credit situation good or bad.
One or more blemishes on your credit report does not mean that you
can not buy a home! Even with a bankruptcy it can be possible.
With the correct information they will know how to guide you
through the home buying process. Be honest about your down payment
funds and closing funds. Of course a good agent will run a credit
report on you and verify that you have the funds.
Overall, real estate agents like to see people succeed. Moreover,
they would like to be a part of your success story, so be honest
with them and you will see how much further it will take you.
Some Helpful Tips for Sellers
There are
several different types of listing contracts, but very few of them
are used. The "Exclusive Right to Sell" is the most common, but
there is the "Open Listing," the "exclusive agency listing," and
the "One-time Show”.
An Open Listing
An “Open
Listing” is a good option for a seller who is trying to sell
their home by owner but is ALSO willing to work with real estate
agents. Basically, you are selling your home by owner but would
like to also work with agents. They will show your home to their
prospective buyer and if their client buys your home, the agent
earns a commission. If you sell your home on your own, they of
course do not get a commission.
This type of
listing has positive and negative drawbacks. The positive is the
obvious, the more clients and agents that come to view the house,
the more the word will be put out there regarding your home for
sale and hopefully you may even get a buyer. One consideration is
that when the agent does bring the buyer you will have to remember
that YOU are now paying a commission to the agent in the event of
a sale. The commission for this type of listing will usually be
around 3%. As a for sale by owner if you have some literature
outside in a bin it will be difficult to increase the price to
accommodate the commission you will now be paying in the event of
a sale. Yes you can run out and grab the flyers before the
appointment but if they are educated buyers they will probably
realize that there may be a price difference. They can always call
your sign tomorrow to find out the by owner price. You won’t be
able to sell it to them by owner since the agent brought them. I
suggest if you take this option to just figure in the commission
when you set your price for your For Sale by Owner flyer. On the
negative side, since there is nothing exclusive about an open
listing and a home seller can give out such listings to every
agent, no agent is going to market your home or put it in the
Multiple Listing Service. In a “hot” market though this agreement
may work very well, realtors may actually have a small inventory
of homes to show prospective buyers. Be Aware of some
realtors that will use your willingness to cooperate with them as
an attempt to get you to sign an exclusive listing with them. The
most common lure is to tell you that have someone interested in
your home but their broker will not allow them to do one day
listing agreement. Your initial reaction will be that you don’t
want to let this one get away!
One Day One Show Listing
A "one-time
show" or “one-day listing” is similar to an open listing. It is
used by real estate agents who are showing a FSBO (for sale by
owner) to a client. The home seller signs a real estate listing
agreement which identifies the potential buyer and guarantees the
agent a commission should that buyer purchase the home. This
listing agreement is for ONE day only. When signing be sure that
you are signing for one day (the date of the showing should be
visible) and not 90 days.
With both of
these options I have been impressed by agents who brought clients
to my home on a continued basis. Because these hard working agents
kept bringing clients, I felt comfortable enough to ultimately
list with them and sign an “Exclusive Right to Sell” agreement.
Realistically if they bring someone to my FSBO house and get a
commission have they lost anything? I have to laugh at the agents
that insist that if you list with them, they can sell your house
for you. As my husband always states to them, “Well if you knew my
house was for sale by FSBO and you knew I was cooperating with
brokers why did you not bring anyone then?” We knew why, because
they did not want to bother unless they actually had the listing!
Exclusive
Right to Sell Listing Agreement
Signing an
"exclusive right to sell" your property does not mean that there
will not be other agents involved. Your agent is the listing agent
and a large part of his or her job is to notify other agents that
your home is for sale. This is done by some marketing techniques
such as, sending out letters, postcards, or faxing the info. The
now informed agents will show your home to their clients.
Regardless of which agent sells the home your listing agent will
earn a commission. Once you have signed this type of agreement
even if your home is sold to a relative, friend, etc. you are
bound by this contract and the listing agent must receive the full
commission agreed upon.
An exclusive right to sell is the only type of listing that
most real estate agents will only accept. This is because they
feel they will have to spend money out of pocket to market your
property in the hopes they will earn a commission.
When signing this type of agreement you will have to decide how
many days you are willing to list for. Most agents require that
you sign for 90 days. They feel that they cannot effectively
market your home in a shorter time frame and want enough time to
recoup their expenses.
I usually try to sign for 30 days. This short time frame is
sometimes difficult to receive. My personal feeling is that if the
agent/seller relationship is not working out I would like it
terminated. If the Agent can effectively show me they are working
to sell my home, then I will most likely sign for the additional
60 days. I also sign agreements with a line added “seller or agent
may terminate this agreement at any time for any reason”. I don’t
do this to portray a bad light on an agent, but the less hassle
with getting out of a bad relationship, the happier I AM. My
feeling is if an Agent is hardworking and assured, they would not
have any problem with this. If they are not willing to agree to
this, there are other agents that may be willing to.
Suggested Questions to ask
Before Signing an agreement:
How long have you been a realtor?
Do you work full time or part time?
How many homes did you sell this year? Last year? Do you have
some kind of stats that show this?
How do you plan to market my home? What type of advertising are
you offering me for my home? (They should offer to list your home
in the local real estate magazines and newspapers. The insertion
deadlines for magazines will usually cause your house to not be
offered until the following issues. Suggesting that the agent
immediately advertise in the local paper will probably bring you
faster results.)
May I see your current listings?
Do you have a cell phone number?
Do you have a web address?
Do you have any testimonial letters that I may see?
Can I terminate the listing if I am not pleased with your
service? Suggest the prior “seller or agent may terminate this
agreement at any time for any reason”.
How many days do you require the listing to be?
As Always please pay attention to the Be Awares:
When Shopping
for a Home:
Be Aware
of an Agent who is very insistent upon you using a particular home
inspection company, home insurance company, mortgage company, etc.
Remember it is YOUR choice who you decide to hire and pay for
items pertaining to the purchase of your house. (Please refer to
the chapter “Real Estate Kickbacks” in The Be Aware of Real Estate
Handbook.). Of course if you have a good helpful agent who is
suggesting individuals in response to your inquiries, being in the
business helps for some good recommendations.
When Selling
Your Home:
Be Aware
of Real Estate “Listers”. Some “lazy” agents will run around town
signing up sellers to sell their homes but are counting on OTHER
agents to actually sell the home. Yes chances are that the agent
that you listed with may not be the one to actually sell your
home, but they should be at least trying to sell it. If they sell
it they will receive the FULL commission. If another agent sells
it they will have to split the commission 50-50. The 50-50 split
works just fine for some “lazy” realtors.
Be Aware
of Agents who are “pushy” about listing your house at a lesser
price than you desire. Ask them to show you evidence that your
house should be listed for a lesser price. Some agents convince
sellers to list at a good selling price for a quick sale and
assurance of a commission. Not to say that they can be “selective”
about the sold houses that they are showing you to make the price
less. I suggest you call “for sale signs” in the neighborhood to
try to get a general idea of what the prices are.
Be Aware
of an Agent who is very insistent upon you offering a home
warranty. (especially if it is obvious that your home is fairly
new or in great shape!) to prospective buyers. (Please see “Real
Estate Kickbacks” chapter in The Be Aware of Real Estate
Handbook).
Be Aware
of an Agent who is very insistent upon you using a particular
Title Company, Attorney, or any other individuals to help with
your house sale. (Please see “Real Estate Kickbacks” chapter in
The Be Aware of Real Estate Handbook.
Before signing your
listing agreement, read it carefully and ask questions!
Unfortunately there are so many other Be Awares to be
concerned with during your home buying, home selling experiences,
and closing. For more be awares, please order your copy of “The
Be Aware of Real Estate Handbook” today!!
In conclusion, when
I list with an agent I personally feel that I am listing with THAT
person, not the company they are working for and representing. It
is the agent that has impressed me, sold themselves to me and will
be working with me to sell my home. In my interview with them I
can express my concerns, which may be my pet’s safety or the
security of my valuables. I have gone as far as to insist that my
listing agent ALWAYS accompany other agents to my home when I am
not at home. This made me feel secure that my pets would not be
let out and lost and my valuables not stolen. Remember this is
YOUR home. You are just hiring someone to help you sell it. Good
luck and as always please feel free to contact me.
Irene
For more Be
Aware topics, tips, and real-life real estate experiences, please
order your copy of:
The
Be Aware of Real Estate Handbook Today!!
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