When you purchase a home, it is almost certainly the most expensive item you will ever purchase – and you are almost certainly inexperienced with the home buying process. As a result, it’s advantageous to have a real estate agent on your side.
Many potential homebuyers are unfamiliar with the specifics of how their interaction with a real estate agent works, which may lead to misconceptions that might result in financial losses for them. Make certain that you hire and work with a real estate agent with an open mind, and that you are aware of the 13 points below.
We spoke to a representative from Sheldon Bosley Knight Estate Agent, who is an estate agent and they say, “Avoiding a commission is possible if you find a buyer on your own.
So, you’re about to sign a contract with a seller’s agent, and your neighbour’s buddy or cousin’s employer has already inspected the property. If the boss makes an offer after you sign the contract, you’ll have to go through your agent, correct? Not so quickly. Before signing with the agent, make a written disclosure of any legitimate prospective buyers who have already expressed interest. If a disclosed buyer chooses to complete the transaction, you are not required to use a broker – or to pay the broker’s commission.”
Small firms can be just as effective as large ones
While large real estate agencies may have established brands and substantial marketing budgets, this does not always mean they are the best or only option.
Larger agencies are generally less likely to negotiate commissions than smaller agencies, and agents may get a lower commission share, providing them with less motivation to work hard to sell for the best price. Agents at large agencies may also be under intense pressure to achieve sales targets, which means they may be stretched too thin to provide the attention your property needs.
A small firm may offer superior customer service in certain cases — and the internet has leveled the playing field, allowing numerous tiny agents to advertise your property equally as successfully as large ones. The key is to avoid getting influenced by trade names but instead interview many agents until you discover one you like— but also to ensure that any agent from a small brokerage is a qualified, full-time real estate agent if you choose that route.
Obtaining the best price is not always the primary objective.
Real estate agents are compensated more if your home sells for a higher price, so they will work diligently to obtain the best price. Right? Maybe. While it is possible for a realtor to sell your property in a month for a lower price and move on to the next transaction, it may not be worth the effort to spend a few extra months marketing and showing your home in order to improve your bottom line. Additionally, agents may prefer higher volume, even at the expense of price, due to the risk of transactions collapsing.
Agents may even act unethically by bringing you an offer from an unrepresented buyer while “forgetting” to bring you a competing bid from the buyer’s representative. While an agent may lose their license for such an offense, uncovering the unreported offer may be difficult, and some agents are prepared to take the risk if it means double their income.
This commission fee is possibly negotiable.
Generally, commission fees are paid to the buyer’s and seller’s agents when a property is sold. They usually total 6%, with each agency receiving 3%. This may seem to be non-negotiable since it is an industry norm, and any vendor with whom you deal may agree.
However, agents often negotiate. If the house you’re purchasing is very expensive, for example, they may be prepared to reduce the interest rate by a percentage point. (After all, a 3% commission on a $1.5 million house is a staggering $45,000, and lowering it to 2% still nets them a sizable $30,000.) Additionally, you may be able to negotiate a reduced price when signing up with an agency, since an agent who is really interested in you as a client may be ready to bargain.
They may be involved in a conflict of interest.
This is a significant issue. If you’re seeking to purchase a house and hire a real estate agent, keep in mind that the agent may not always be acting in your best interests since you’re not the one paying them. The seller is always responsible for paying the commissions of both the buyer’s and seller’s agents. Thus, your agent may be considering the seller’s interests to some extent during the search and purchasing process – and may provide certain information about you to the seller’s representatives.
Conclusion
When you work with real estate agents, many factors come into play, and the real estate agent may not always inform you of all you need to know. We hope that this article has helped you to become more aware of some of the things that your real estate agent may have not informed you about in the process.
