You and Your Real Estate Agent
By: Jayson Schwarz LLM
In today’s marketplace realtors are an often valuable and important part of the process. Today we will explore the mysteries surrounding them.
How do you pick a realtor? Let’s see . . . Uncle Bob’s cousin’s sister’s aunt’s brother-in-law Bill, says that Sadie is a great agent and you should use her. That’s good enough for Bill and should be enough for you. WRONG!!! When you want to pick your realtor – BE CAREFUL, BE CHALLENGING, BE PRUDENT, BE INVESTIGATIVE and BE PICKY. Your realtor is one of the most important and one of the most expensive parts of buying or selling your home.
So what do I do? Firstly interview a number of agents. Let them sell you first. If they can’t sell you how can they sell your house or help you buy one. Ask for references and follow them up. Call people who they claim they did a great job for and speak to them. Check with your lawyer (you have a lawyer of course . . . get the lawyer first) and ask the agents to tell you how many houses they have listed and how many sold in the last 6 months. When selling ask for a written proposal as to how they will proceed (include where and how often they will advertise, conduct open houses, signage, etc.). You want a plan not a promise.
When selling, the agent will ask you to sign a “Listing Agreement”. This contract sets out the terms on which you are willing to sell your property. The Listing Agreement contains how much you will pay your realtor and/or the selling agent as well as the term the Listing Agreement is valid and binding. This is really important so be careful and negotiate the commission rate and the term. Use these items to force performance by the realtor. Be aware of the fact that the term is deemed to be extended for 90 days in the case of a purchaser who was introduced to the property – or to the vendor – during the original term by the agent and is entitled to be paid.
When buying the agent will ask you to sign a “Representation Agreement”. This commits you to the agent and protects the agent from taking you everywhere and then being dropped and commits him to you as well. Make sure the terms truly set out what you expect.