This one really confuses the public. In this business I’ve worked with all kinds of
buyers, from surgeons to hourly laborers, they can perform open heart surgery
or lay a new patio in your yard but they don’t have a clue as to how to be
properly represented when purchasing a home.
I recently met a buyer
at one of my open houses who was relocating to Birmingham. I asked him if he was working with a local
agent and his response to me was, “No, we do a lot of our own research, then we
drive around, attend open houses or call the number on the sign. When we find one we like we will probably
work with that agent. I can save
commission that way, so why do I need a buyer’s agent?” I explained to him some of the advantages of
working with a buyer’s agent in their search for Birmingham
homes but then he said
to me “With my company, I’ve moved around a lot, you know this isn’t my first
rodeo.” With his last comment I was
about to cut him loose, let him ride off into the sunset but then I thought let
me try this one more time. What I said
to him was this. “You do you have a
computer, right?” His answer was yes.”
Do you look at a lot of homes on the net?”
Sure was his reply. “Do you have adequate antivirus protection, like
Norton or McAfee? “Dude, of course I do. I would never go on line without
having adequate virus protection.” Well,
look at hiring a buyer’s agent as your antivirus protection of real estate, you
should never go out and look at homes without being properly represented, a
buyer’s agent will have your back, his fiduciary responsibility will be to you
not the seller. That agent you meet at
an open house or the one who answers the phone when you call off a sign is
working for the seller, his loyalty is to get the best price for his seller,
and not you! I shook his hand, gave him my card and wished
him well. I think he got it, but only time will tell.
Typically
at my initial consult I explain to my prospective client the various
representations and in the outset I will be representing them as a single
agent. This is the most common form of
representation and seems to be the most desirable in the buyer’s eyes. I mean why not have someone work exclusively for
you? Agents
who represent clients under single agency owe a fiduciary responsibility to the
client. Those agents cannot share confidential information with the other party or the
other party's agent. Single agency agents must use care and due diligence to
perform duties, disclose all material
facts and be honest.
Once this single agency relationship is established, the real
work begins. The home buyers puts all their trust in
me, it is my job to find them their dream home. I have to prove to them that there is a
real value to working with a buyer’s agent.
From that first meeting I suggest that they get with a local
lender and get prequalified so they know how much to go “shopping for”. No sense looking at $200,000 homes if you
only qualify to buy one for $150,000. The buyers have discussed with me their ideal location,
number of bedrooms and baths, possibly school systems, and price. From here I prepare for the buyers a list of homes
that fit their criteria, fill up my gas tank and hit the road.
There are many misconceptions regarding
representation and here in Alabama the scenario becomes even more complicated
because not only do we offer single agency and transaction agency, but we allow
consensual dual agency. Consensual dual
agency is when the agent can represent both sides of a transaction. It sounds complicated
but it’s not and in some cases people feel it is a conflict of interest. If a Realtor uses common sense and are fair to both
parties dual agency can work well, and I have closed many transactions representing
both parties. I prefer this type of
dual agency representation for several reasons.
Having control of both the buyer and seller and knowing all the “pieces
of the puzzle," as I call it helps me get to the closing table without any
bumps in the road.
Oh yea,
remember the buyer I met at my open house?
The cowboy who told me this “wasn’t his first rodeo?” Well, he
called. I was a bit skeptical at first but
after sitting down with him I realized he was a contender and not a pretender,
so I took him on as a client, gassed up the car and hit the road (or should
I say trail)…..