A real estate agent/Realtor/broker is someone who acts as our friend, philosopher, and guide, helping us look for our dream home. However, there are certain things that even this friend, philosopher, and guide will hide until asked.
Did You Know?
The National Association of Realtors is the largest real estate organization in the United States whose membership exceeds one million.
When it comes to buying or selling a house, it is quite natural to be oblivious to the tricks of the trade. Hence, hiring a real estate agent is probably the best way to go about it.
A real estate agent might seem the one person you can trust to get a good deal, but one should never forget that he/she is simply a salesperson who is working for a commission, who will probably do anything to ensure that the sale is done.
It may be quite difficult to be upfront about certain things you aren't sure of, but if all your doubts are cleared now, you probably won't regret it later. Don't expect the agent to be extremely honest, he/she isn't going to divulge any details that might put him/her in a soup or minimize his earnings.
You need to be smart and should be aware of all the things that a real estate agent might not reveal. Here are a few things that a real estate agent will simply not tell you, at times even if asked.
His/Her Commission is Negotiable
Most agents earn their bread through the commission from the sale price, though some have a fixed rate.
Their earnings usually depend on the various services offered, and most importantly on the price offered for the house. Different agents charge different commission, so it won't hurt to ask a few questions about how they plan to get you a good deal, and how much would go to them.
Also many of them may tempt you with a free valuation if you sign up with them, but don't be fooled by this offer as home valuation is usually done free by many agents. Most agents might also negotiate their commission, so this is something that you should definitely ask your agent.
The Cons of the Neighborhood
'This is one of the safest neighborhoods in the city. It is filled with the nicest neighbors who are always ready to help, and you don't have to worry about a thing.' An agent who wants to make a quick buck won't necessarily share any information to the buyer about the neighborhood that might seem unappealing.
The neighborhood might really look fantastic, but there might be an office building coming up, a bar that is about to open, or you might also be moving beside a registered sex offender. Agents typically tell you only the good points and leave it to you find out the bad points yourself.
Sometimes, even on asking they might not reveal the entire truth, so it would be wise if you found out about good schools, crime statistics, parks, and nearby hospitals yourself.
How an Open House is More Beneficial to Him/Her
Keeping an open house is a great way to attract potential buyers, but many times the only one who benefits from an open house is the agent.
An open house gives him/her a database of clients; the agent gets to meet potential buyers who aren't interested in the house, but might show an interest in some other properties. There is also a high chance of clients entering in pairs and stealing valuables.
Also, there might be a chance of other agents coming in with their clients, and trying to work out a secret deal with your agent. Hence, it is advised that at least one of the owners should be present during an open house.
The Number of Offers Made
It is the agent's duty to inform you about all the offers that come in. But sometimes he/she doesn't do it. Why? There can be a number of reasons.
He/She hasn't found any of the existing offers worthy enough, or he/she wants to wait for a bigger commission. Whatever his/her reason is, you must be well informed about all the offers made, whether big or small. If you are not stern enough, the agent can pass off various deals that may be good for you, just because he wants a higher commission.
It is not just the commission, but there are certain things that can also be negotiated if you sign up for a Seller's Contract with the agent. In most instances the contract is valid for six months, but as a consumer you can opt for three months.
This way if you aren't satisfied with the services, you can terminate the agreement sooner. Another important thing to remember is to ask about any hidden fees in the contract. Most agents will inform you about extra charges upfront, but others might include it somewhere in the contract where it might not be easily visible.
The Importance of a Final Walk Through
A final walk through is your last chance to check the property before sealing the deal to ensure that all the necessary repairs were done properly.
It is important and should never be skipped. Check each and every corner of the house before signing the papers. Ensure that all the owner's items have been removed, and all the items that you wanted to stay are still there. You really don't want the previous owners coming back for some furniture, window treatments, or chandeliers a week after you move in.
His/Her Inability to give Legal Advice
Always remember that a real estate agent and an attorney are two different individuals. The problem here is most agents tend to give legal advice, and cause problems for their clients.
If you have a question or need a legal opinion regarding real estate, get in touch with a real estate lawyer because it is illegal for a agent to give legal advice. You can also get the attorney to review your contract to ensure that you don't face any major disappointments later.
The Cons of the House
As a buyer, you do believe that the agent is familiar with the place. After all, he/she can't stop raving about the wooden flooring, the amazing bedrooms, the new kitchen, the big closets, etc.
However, you also need to check what he/she is hiding from you. This is where the Home Inspector comes in. A home inspector is a professional who inspects houses before the sale is made, and he/she might figure out defects, but choose to remain quiet in turn for a share in the agent's commission.
The best thing to do here is to get in touch with the American Society of Home Inspectors and seek the services of a reliable professional, who can inform you about the state of the home.
Real estate is a fairly easy business to get into, and is filled with inexperienced people. Hence, it is advised to do some research before selecting an agent.
Use the Internet to find out more about your agent. Or if you know of anyone who has used his services before, check with them if they were satisfied with his/her services. Ratings and testimonials of other clients are also things that will tell you about the agent's reliability and experience.
Do You Really Need Him/Her?
This is something that you'll never hear from an agent. In some instances you really don't need an agent to purchase or sell a home. Sure, having one doesn't hurt, but how many professional agents have you come across who actually know what they are doing.
Search and you will find many homes which are on sale by the owner. Look for the 'For Sale by the Owner' sign, and you might probably come across a better deal. The selling price might also be lower as the concept of commission is eliminated.