I want you to think about what type of real estate agent you need before you start searching for an agent. Some stand for the seller. Others stand for the consumer. And others are doing both. Here’s a short description of each.
A buyer’s agent, as you might expect, represents the buyer in a property transaction. This involves locating listings in the price range of the client, arranging viewings, leading the way when it is time to make a proposal, and directing discussions with the seller to secure the best deal for the buyer. If a contract has been signed, the agent will direct the buyer through the closing stage.
Here’s where it could get a little complicated. When a seller signs a contract from the buyer, the agent assisting the buyer becomes known as the selling agent since that person is responsible for “selling” the property to the buyer. The crucial thing to always keep in mind is the real estate agent continues to serve the interests of the customer.
On the other side, the real estate agent of the seller-also known as the selling agent-represents the interest of the seller. A seller’s agent makes suggestions on a home’s selling price, lists the property sold on the multiple listing sites or MLS. The representative of the seller often holds open houses and negotiates on behalf of the seller.
Double-ended real estate deals aren’t the only dangers lurking in the murky waters of today’s hot real estate market. Because even when realtors are only working on one side of the sale, it can be hard for a buyer or a seller to know if they’ve found the right person to really look out for them.
While researching Marketplace’s recent report on double-ended deals in Canada’s housing market, we asked a few real estate experts for their best tips on what to ask a realtor before signing up in the first place. Here’s what they told us.
DO YOUR HOMEWORK
“Think about what you’ve got to do to get a job today,” former TREB president Stephen Moranis says. You’d need to fill out an application, attach a resume, offer some references, and if you’re lucky to meet in person for at least one round of interviews. “I’m not saying you necessarily have to be that crazy, but I don’t think consumers take enough time interviewing an agent both for if they’re a seller or if they’re a buyer.
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Moranis advises interviewing two or three realtors before settling on one. And sometimes, going with your gut is the best policy. “At the end of the day, I think your most important element is sort of the subjective stuff,” Moranis says. “Are you comfortable with this person? Can you relate to them? Can you communicate with them? Are they on the same wavelength as you?”
LEARN THEIR HISTORY
That’s not to suggest that harder questions don’t matter, too. In particular, business professor Cynthia Holmes at Ryerson University in Toronto says she thinks experience with your specific neighborhood — and the type of property you’re looking to buy or sell is key.
“Make sure that agent has experience in your location and with houses that are similar to yours,” she says. “Because market knowledge is very important, and market knowledge is related to the location in large part.”
She advises asking a prospective realtor specifically about local factors. “I would ask the agent what their experience is in the neighborhood and how many sales have they already achieved there,” she says. “How many listings do they currently have?”
Moranis says there are reams of data related to real estate transactions, all of which are accessible to realtors. But customers never ask for it. “I want to see the real straight goods on the trading in this particular neighborhood,” Moranis says. That means not just sales volumes and selling prices — get numbers on how long houses tend to be on the market for, and what agents and brokers brought bids and offers to past sales.
“The facts are all available,” he says. ” You know the agents have access to all that information — why wouldn’t I want to walk through all that with you?”
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If a realtor isn’t willing to be open about the number, walk away. And thanks to increased scrutiny on realtor commissions in recent years, it’s helpful to always remember: the fee is negotiable.
WHAT’S THE PLAN?
Once you’ve found someone you want to work with, the next step is to figure out what they have in store for you. A big way that realtors differentiate themselves these days, Holmes says, is with their marketing plans. In hot markets, hanging up a shingle and having an open house can get you foot traffic, but a smart realtor has a plan to set your property apart. Will they have open houses, list your property on various websites, and arrange for a virtual tour?
“If they’ll give out postcard mailings if they’ll take professional photos if they’ll stage your house,” Holmes says. “Not all of those things are typical, so it’s good to get a good idea about what the agent,” has planned, she says.
AVOID THE DOUBLE-ENDED DEAL IF YOU CAN
While Marketplace this week uncovered abuses in double-ended deals — where one realtor represents both sides of a sale — not everyone is convinced they are shady by default.
“I’ve seen agents who do it right,” real estate lawyer Mark Weisleder says. “I’m not in the camp that thinks they should ban it.”
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Weisleder says it’s not necessarily against your best interest to work with a realtor who’s doing both sides of the deal, as long as they do it the way some of the better ones he knows of are already doing: bring in someone at arm’s length when it comes time to present all bids to the seller.
“In my opinion, a third person, usually a manager, should present all offers to the seller so that no one is perceived to have an unfair advantage,” he said.
Weisleder says a good agent where a double-ended deal is potential if there are multiple offers, would set up a system like that “to convey to everybody that the process is going to be fair.”
“If I was a buyer or a competing agent,” he said, “I’d say that looks pretty fair.”