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What Is a Buyer’s Agent? A Trusted Guide Who’ll Help You Find a Home

November 14, 2019

real estate agent shaking hands; what is a buyer's agent?

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Ready to house hunt? It’s a jungle out there: Prepare for a flurry of paperwork, stampedes of buyers competing for the same digs, and other challenges, before you get your hands on those house keys.

We won’t lie: The process can be complex and stressful—especially if you are a first-time buyer. Having a real estate pro by your side can make all the difference.

You might have heard of buyer’s agents, selling agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent?

True to their name, buyer’s agents help real estate buyers navigate the real estate market; they can also save you tons of time and money on the road to your new home.

Read on to learn how a real estate buyer’s agent can help, and how to find the right one for you.

Benefits of using a buyer’s agent when buying real estate

“A buyer’s agent will guide you through the home-buying transaction and be at your disposal for any questions or concerns,” says Shane Wilcox, a Realtor® with Partners Trust. Here are some of the things a buyer’s agent can do:

  • Find the right property. After determining what the clients are looking for and what they can afford, the agent will schedule appointments to tour homes that fit the bill. The agent can also explain the ins and outs of various properties and neighborhoods, to help buyers decide which home is right for them, by explaining the pros and cons of various options.
  • Negotiate the offer. The buyer’s agent will advise clients on an appropriate price to offer and present it to the seller’s agent. “Then they will negotiate on your behalf and write up the contracts for you,” says Matt Laricy, a Realtor with Americorp Real Estate in Chicago. This is where the agent’s experience in negotiating deals can save you money and help you avoid pitfalls like a fixer-upper that’s more trouble than it’s worth.
  • Recommend other professionals. A buyer’s agent should also be able to refer you to reliable mortgage brokers, real estate attorneys, home inspectors, movers, and other real estate professionals. This can also help expedite each step of the process and move you to a successful real estate sale all the faster.
  • Help overcome setbacks. If the home inspector’s report or appraisal brings new issues to light, a buyer’s agent can advise you on how to proceed with the transaction, and then act as a buffer between you and the sellers or their broker. If negotiations become heated or hostile, it’s extremely helpful to have an experienced professional keeping calm and offering productive solutions.

Buyer’s agent vs. listing agent: What’s the difference?

Buyer’s agents are legally bound to help buyers, whereas listing agents—the real estate agent representing the home listing—have a fiduciary duty to the home seller.

“That’s why it’s in your best interest as a buyer to get an agent who is there to represent you,” explains Alex Cortez, a Realtor with Wailea Village Properties in Kihei, HI.

“Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently fight for your interests and rights.”

Let’s say, for instance, you walked up to the listing agent at an open house. You might gush about how you love the home and want to buy it, but add that you will need to move soon—because you’re expecting your second child and need to decorate the nursery, pronto, or because the lease on your rental is up in a couple of months.

A seller’s agent could then use this information against you by informing the sellers that your clock is ticking, so they shouldn’t budge too much on their asking price—if at all.

Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this info private from sellers (and their agents), so it can’t be used against you.

Some states, recognizing this problem, required a disclosure of dual agency when a broker represents both sides of a real estate transaction.

However, you may still not be comfortable after signing an agreement saying you know someone is a double agent. You might want to hire an agent who is not representing the owner, and who is looking out for your best interests.

How to find a buyer’s agent

A good buyer’s agent can ease your way to homeownership—and a bad one can result in a bumpy ride.

You should not just take the first buyer’s agent you meet (as two-thirds of home buyers do), or blindly accept the recommendation of a friend (more than half do this). Instead, it’s best to interview at least three agents and ask them a few questions, including the following:

  • What neighborhoods do you specialize in? Real estate requires local expertise, so you should find an agent who’s extremely familiar with the areas you’re interested in.
  • What’s your schedule and availability? Part-time real estate agents who are committed can do a fine job, but if the house of your dreams pops up or you encounter last-minute closing snafus, you want an agent who will be readily reachable.
  • How long have you been a real estate agent? You ideally want someone with a couple of years of experience, and a proven track record of selling homes.

To find real estate agents in your area, head to realtor.com/realestateagents, where you can also read online reviews provided by past clients and learn more.

The agent/buyer contract

Once you agree to work with someone, you will have to sign a contract called an “exclusive buyer agency agreement,” outlining the agent’s services and compensation (more on that next).

This contract also means that this person will be your sole representative and that you won’t work with other buyer’s agents.

How much do buyer’s agents cost?

Home buyers don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller pays the commission for both the seller’s and buyer’s agents.

Typically, the commission is the equivalent of about 6% of the home’s sales price, which is split evenly between both agents (on a $200,000 home, that would be $6,000 apiece).

The post What Is a Buyer’s Agent? A Trusted Guide Who’ll Help You Find a Home appeared first on Real Estate News & Insights | realtor.com®.

Should You Use the Same Real Estate Agent to Buy and Sell a Home?

May 10, 2019

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When you’re in the middle of selling a home and buying a new one, the question inevitably comes up: Can’t I just use the same agent for both transactions—wouldn’t that make things easier? After gathering expert insight from the pros, we came up with the definitive guide on when using the same agent makes sense, and when it doesn’t.

When should I use the same real estate agent to buy and sell a home?

The answer isn’t cut and dried, we’re afraid: It will all depend on your circumstances. Using one agent for both buying and selling might seem like the easiest solution, but that’s true only if your agent is up to the task on both ends of the sale. This means your agent is comfortable with representing you as both a seller and a buyer, and also that she’s familiar with both neighborhoods.

Licensed real estate agent Alyssa Martin of Nest Seekers International in New York City explains that this is one benefit of working with a bigger company.

“If someone is moving from Chelsea to Jersey City, I’m able to collaborate with someone in Jersey City,” she says.

For bigger moves (e.g., from New York to Florida), agents like Martin can even act as a liaison, helping their seller clients locate a buyer’s agent in the new location.

When should I get two different agents?

Staci Donegan of Seabolt Real Estate, in Savannah, GA, explains that some moves are simply too big for one agent to handle—especially if the agent is focused on one neighborhood and the client is moving out of it.

“In this situation,” she says, “I would help my client find another agent, even interview them. It just can’t be me—because that would be a disservice to the client.”

Pros of working with the same agent

You’ll often hear people offer rave reviews about working with one agent instead of two, and that’s because there are a few potential benefits worth mentioning.

To start, your real estate agent knows you best.

“You have the synergy of working together,” Donegan says. “During the selling process, I know exactly what they love about their house, what they hate about their house—it’s just the perfect transition from the selling side to the buying side. I know what they’re looking for and what’s important to them.”

Another benefit of working with the same agent is the potential to save money when you sell.

“I would cut commission significantly, and I would go out of pocket on marketing costs,” Martin says.

How to determine if your real estate agent can do both transactions

When deciding on which agent (or agents) to work with for your move, it’s important to ask the right questions.

It bears repeating: Make sure your agent is an expert in both neighborhoods involved. And don’t forget to ask whether your real estate professional tends to act more as a listing agent or a buyer’s agent.

“The questions become really important,” Martin says, “like, ‘What areas have you sold in and had buyers in?’ Make sure they have experience on both sides of the process.”

Martin also emphasizes the importance of your real estate agent’s network.

“Relationships with mortgage brokers and closing attorneys are important,” she says. “If you don’t have that, it’s hard to get your client the best deal.”

Another question you’ll want to ask is whether or not the agent has experience working with clients like you. For example, if you’re buying an investment property or you’re in the military and require a VA loan, your agent might have difficulty pulling this off if she hasn’t done it before.

“When working with an agent, make sure they have the skills they need for that transaction,” Donegan says.

If you really like your listing agent and the new home is outside of the agent’s market, you might consider asking her for help finding a buyer’s agent. Since she knows what matters to you better than anyone, she’ll be a great resource in connecting you with the right person.

The final word

Ultimately, there seems to be a consensus that working with the same real estate agent is a good idea—but only when it makes sense for your transaction.

“Things can be easier with less people at the closing table,” Martin says. But the experts also agree on this final point as well: Having two qualified agents is much, much better than having one underqualified one.

The post Should You Use the Same Real Estate Agent to Buy and Sell a Home? appeared first on Real Estate News & Insights | realtor.com®.

Real Estate Agent, Broker, Realtor: What’s the Difference?

May 8, 2019

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Whether you want to buy or sell a home, you’ll want some help. So who should you hire? Real estate professionals go by various names, including real estate agent, real estate broker, or Realtor®. So what’s the difference?

Sometimes consumers use these titles interchangeably, but rest assured, there are some important differences, as well as varying requirements for using particular titles.

Here’s a rundown of the real estate professional titles you’ll come across, and what they mean.

Real estate agent

A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate.

To get that license, states require that individuals take prelicensing training. The required number of training hours can vary significantly by jurisdiction. In Virginia, for example, real estate agents must take 60 hours of prelicensing training, but in California they need to take 135 hours.

Once that training is done, aspiring agents take a written licensing exam. These exams are typically divided into two portions: one on federal real estate laws and general real estate principles, the second on state-specific laws.

Once they pass their exams, they’ve earned the title of a “real estate agent” and can begin working with home buyers, sellers, and renters.

Real estate broker

A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.

Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent prelicensing course.

Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.

As a result, “brokers have in-depth knowledge of the real estate business,” says Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA.

To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.

There are three types of real estate brokers, each with subtle differences in the role they perform:

  • Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
  • Managing broker: This person oversees the day-to-day operation of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
  • Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.

 

Realtor

In order to become a Realtor—a licensed agent with the ability to use that widely respected title—an agent needs to be a member of the National Association of Realtors®.

As a member, a person subscribes to the standards of the association and its code of ethics.

“Essentially, the NAR hold us to a higher standard,” says Peggy Yee, a Realtor in Falls Church, VA. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits.

Listing agent

A listing agent is a real estate agent who represents a home seller. Listing agents help home sellers with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.

Generally, listing agents don’t receive a dime unless your home gets sold. If it does, the typical agent commission is 5% to 6% of the price of your home (which is typically split between the listing agent and the buyer’s agent), but a listing agent’s fee can vary depending on the scope of their services and their housing market.

Buyer’s agent

True to their name, buyer’s agents represent home buyers and assist them through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

Fortunately for home buyers, they don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller usually pays the commission for both the seller’s agent and the buyer’s agent from the listing agent’s fee.

Rental agent

In addition to helping people buy and sell homes, many real estate professionals help consumers find properties to rent. But what these agents do depends on the location—whether it’s a large city or a small town—and the agent.

Sometimes a rental agent will guide your search from the very start, helping you find the right neighborhood, apartment size, and price range, then go with you to open houses. More likely though, you’ll already have a lot of that information decided, and the agent will send you listings that might be of interest to you.

Once you’ve decided on a rental and have been approved by the landlord or management company, your agent should help you read and understand your lease.

“Most tenants can find a place without a real estate agent, but they forget to seek out someone who can help them understand what they’re signing when they sign a lease,” says Dillar Schwartz, a real estate agent in Austin, TX.

Rental agents will also represent landlords to help them find tenants—but the fee an agent will charge a landlord depends on what market they work in. In many places, the landlord pays the real estate agent to help find a desirable tenant. In more competitive rental markets, however, the tenant may be responsible for the real estate agent fee, sometimes called a “broker fee.” These fees can be as low as $50 to $75 for a credit check or application, but more common rates are one month’s rent or 15% of the annual rent on the apartment.

How to find a real estate agent, broker, or Realtor who’s right for you

Many people find an agent to help them through word of mouth or online. You can search for a variety of real estate professionals in your area at realtor.com’s Find a Realtor database, which includes their sales performance, specialties, reviews, and other helpful information. It’s a good idea to talk to at least three agents in person, and ask the agents some key questions to find out if they’re a good fit for you.

Michele Lerner contributed to this article.

The post Real Estate Agent, Broker, Realtor: What’s the Difference? appeared first on Real Estate News & Insights | realtor.com®.

Real Estate Professionals Explained: Agent, Broker, Realtor

February 20, 2019

real estate professionals

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Real estate professionals go by different names. There are agents, brokers, Realtors®, seller’s agents, buyer’s agents. The list goes on.

If you’re entering the real estate market for the first time, you may find real estate professionals’ various titles a little confusing. But you’ll benefit from knowing the difference. Other professions have managers and employees, but in this area of business, it’s a little different. People tend to use these titles interchangeably, but there are some important differences between the roles of the various professionals, as well as different requirements for using particular titles.

Titles for real estate professionals

The real estate profession is regulated by state governments, which have different requirements for earning a license. In general, though, the titles you may come across include the following:

  • Real estate agent: Anyone who earns a real estate license can be called a real estate agent, whether that license is as a sales professional or an associate broker. They look at listings on the multiple listing service and help you buy or sell your house. State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license.
  • Realtor®: A real estate agent who is a member of the National Association of Realtors®, which means that he or she must uphold the standards of the association and its code of ethics.
  • Real estate broker: A person who has taken education beyond the agent level as required by state laws and has passed a broker’s license exam. Brokers can work alone or can hire agents to work for them.
  • Real estate salesperson: Another name for a real estate agent.
  • Real estate associate broker: Someone who has taken additional education classes and earned a broker’s license but chooses to work under the management of a broker.

 

Working with real estate professionals

While you are more likely to work directly with a real estate salesperson or an associate broker when buying, selling, or renting property, some brokers provide services for buyers and sellers themselves. If you have hired a real estate agent to help you buy or sell a property, that agent typically reports to a broker. The broker handles the earnest money deposit and establishes the escrow account. They will be an invaluable resource in the whole process.

In addition, the broker bears responsibility for the actions of the real estate agents under his or her supervision. While the majority of property transactions go through without any glitches, a broker will step in if there are any problems with your home or rental property purchase or sale (e.g., issues with your mortgage or inspection).

If you are unhappy with your real estate agent and cannot resolve the issues directly, your next step should be to talk with the broker to ask for help and perhaps other real estate professionals for you to consult.

Experience and education

Real estate brokers not only have higher education requirements than real estate salespersons, they also must have knowledge and experience working as an agent. For example, in Virginia the license requirements are as follows:

  • A salesperson must take 60 hours of classes and pass an exam with both state and national sections.
  • A broker must take 180 hours of broker-specific classes, pass an exam with both state and national sections, and have actively worked as a real estate salesperson for 36 of the previous 48 months.

 

When you are looking for real estate professionals, it is wise to work with a member of the National Association of Realtors who is committed to maintaining the professionalism of the real estate business. You can choose to work with a salesperson or a broker, but as a homeowner you should take the time to interview your agent and ask for references.

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