Hiring a Buyers Agent
Hiring a Buyers Agent
Hiring a buyers agent is NOT a piece of cake. My niece is going to be a first time home buyer in the Auburn, Alabama market. She and her husband are newlyweds and live in a “college” town where there happens to be a booming real estate market. They are new to the “town” life even though both of them went to college at Auburn University. Their questions about buying a home gave me a fresh opportunity to walk through the home buying process.
First of all – they did not know where to start. They had made some good decisions and some not so good decisions. Lets start with the good decisions.
CHECKED CREDIT RECORDS: both my niece and her husband had checked their credit records at Equifax, Transunion and Experion. They did not mention having to make corrections to their credit records but it is not unusual to find merged records, errors and just wrong information on credit records. And credit score dramatically affect a person’s ability to purchase a home.
PRE-APPROVED BY A MORTGAGE LENDER: being the smart and savvy folks they are – this young couple had already met with a mortgage lender and turned in the necessary documents (w-2s, 1099s, income tax returns etc) that were needed for a mortgage lender to pre-approve them for a house purchase. Inf fact, they were reviewing the various mortgage programs and trying to decide if they could do conventional financing or required FHA financing.
So far so good – they had done some homework and made some good decisions. Now the not so good.
HIRING A BUYERS AGENT: Unfortunately my niece and her cousin had made a rookie mistake in working with real estate agents. They had seen some houses on the real estate portals (Zillow, Trulia and Realtor.com) and contacted agents for showing through these portals. Sounds like an innocent mistake and no harm done. But unfortunately they had made a major mistake.
If you see a home listed on Zillow or Trulia, and you decide you want to see that home, there is a contact form on the screen where you can ask for more information or a showing. If you fill out the form online and hit “submit” you will be sending your contact info to 3 or 4 agents who pay to advertise on these real estate portals. So your info is not going to the listing agent – your info is going to a real estate agent who may or may not be competent, and almost assuredly will be working on behalf of the seller because of the way AGENCY works. (Agency is a legal relationship between the seller or Buyer and the real estate Broker). So my niece and her husband had contacted an agent who would probably NOT be working for them but would be representing the seller’s interests in the transaction.
Compounding the problem – my niece and her husband contacted several real estate agents for different houses.
I advised my niece and her husband to find a competent real estate agent in their neighborhood and hire them as their BUYER REPRESENTATIVE.
Yes – this requires a commitment to one real estate agent. Yes – they will have to sign a contract with the real estate agent for BUYER AGENCEY. But after that they would have the real estate agent working in their best interests and not the best interests of the seller.
HOW DO YOU HIRE A BUYER’S AGENT: My niece and her husband were ready to immediately start looking at houses. They have house buying “fever”. When I told them they needed to interview buyers agents you could feel the wind being sucked out of their sails. Yes, interviewing buyers agents might take a week – but it would be time they would make up over and over again during the purchase of a home.
Criteria to weed out buyers agents
1. Member of National Association of Realtors – if they are not members of the professional organization that represents Realtors interests in congress – and has a strict code of ethics for membership – then I personally would pass.
2. Have professional education and experience credentials that show they have high standards of professionalism when conducting their business. The two highest levels of professionalism are Graduate Realtors Institute (GRI) and Certified Residential Specialist (CRS). If they don’t have one of these then look for the ABR designation Accredited Buyers Representative which has the buyers elements of these educational standards.
3. Reviews from friends in the community.
4. Online reviews on Zillow, Trulia or Realtor.com (these can be faked or jacked up so they are a distant second to reviews from your personal friends and associates).
After you have screened several agents – hold personal interviews – 20 to 30 minutes each – with the agents who appear to meet your criteria. Check and see if the chemistry is right between the two of you. Meet some place easy like Starbux or Chick-fil-A where you can control the environment and make a quick getaway if you don’t feel right. Do not ignore your gut feeling no matter how right they look on paper.
Lastly, ask to see the buyers agency agreement. Set the agreement to run for a fixed amount of time (60 to 90 days) and read the document. Now sign it – yes make a commitment – to that Buyers Agent and start your house hunt.