Real estate agents have different levels of knowledge and|
experience. They play a pivotal
role in home buying and selling.
Hence, it is very important to learn how to
find a top notch agent,
and later work effectively with the professional you have hired.
Who Is Who In Real Estate
Agents - The real estate industry is highly regulated by provincial governments which set bonding, educational
and performance standards.
An agent (sales associate) is a licensed real estate trade professional contracted by a broker.
Brokers - A broker's licence requires more qualifications, beyond those of an agent.
Every real estate office
must have a broker to ensure that its agents adhere to the requirements of the Real Estate Act and that they have appropriate support with any difficulties they can't manage.
Realtors - Only brokers and real estate agents who are members of the Canadian Real Estate Association can use this title. Membership is acquired through further training and licensing, and realtors must strictly comply with the Association's Code of Ethics designed to protect the public.
Seller's Agents - Agents representing sellers must take every action to obtain the highest price and the best conditions of sale. They owe full loyalty to the seller. Buyers should not expect any tips from the seller's agent to get a better deal at the expense of the seller. The selling agent however, has a legal obligation to inform the buyer of any problems with the house being sold.
Buyer's Agents - An agent buying a house on your behalf owes
a fiduciary duty to you. Although your agent gets paid out of the seller's agent commission (usually 50/50 split), he or she has a legal obligation to negotiate for you
the best deal possible.
Buying agents have to put the buyer's interest ahead of their own, even if it means a lower commission. In order to protect home buyers most Canadian provinces implemented Buyer Agency Agreements which must clarify if an agent is working solely for the buyer.
Dual Agency - Sometimes both the buyer and seller will have the same agent, or they will have different agents working for the same broker. This situation is called dual agency and you will be asked to accept it in writing. You should be aware that the agent's loyalty to one party may be in conflict with the duty owed to you.
Why to Hire an Agent
Guidance - What to buy and where to look for a house? Should you buy or sell first? How to price a house for sale? These are just few examples of many critical issues your agent can help you with. He or she will work for you and guide you through the whole process to protect you from making costly mistakes.
Paperwork - Real estate transactions require a great deal of documents. Mishandled paperwork can cost you lots of money, wasted time and frustration. You need a professional to help you arrange a flow of all documents on time and in proper order.
Preparing the House for Sale - Good agents know how to present the house at its best, and they can tell you what small changes or improvements can be made before you let your buyers in.
MLS Listing - Agents have access to MLS - the most popular real estate resource. When selling or buying your agent can use the MLS, where most of available properties on the market are listed.
Marketing and Advertising - Aside from MLS listing you can have your house advertised by your agent in local newspapers, broker's website or through professional contacts.
Open House - Seller's agent will take care of an open house,
so other agents or buyers can see the house and ask questions. When buying, you can count on your agent to find open house events you might be interested in.
Negotiations - Fine negotiation skills define seasoned real estate agents. They can make a difference when everything is negotiable. If you recruit a good agent you should be able to get the most and the best out of the deal.
Transaction Quality - The ultimate decision on all aspects of the deal will be yours. However, your agent can advise you on transaction merits according to his/her knowledge of the market and industry standards.
Coordination - There are many parties involved in real estate transactions - sellers, buyers, lenders, appraisers, inspectors, lawyers and insurance providers.
A good agent, like a good manager will stay on the top of the whole process to ensure efficient and timely closing.
Referrals - One more benefit of having an agent is that you can ask for a referral for different services. Agents are industry insiders and usually can recommend other good real estate professionals they had positive experience with.
It's always a good idea to comparison shop before deciding who will work for you. Ask your agent for a list of professionals instead of one reference. Then you can arrange to meet two or three of them and make your own choice.
How to Hire an Agent
Most of real estate agents are honest and hard working professionals who sell and buy homes for their clients without incidents. If you do your homework and follow the rules most likely you will end up working with a good agent.
Ask your family members, friends or co-workers if they can recommend an agent who earned their trust, and they liked working with.
Search for an agent who primarily works in the area you want to move in. Many homes for sale are not publicized and an agent with established professional network can be very helpful.
Consider established real estate companies instead of small unaffiliated brokerages.
The largest and most reputable agencies are Royal LePage, RE/MAX and Coldwell Banker.
Give your preference to brokers and realtors since they are the most experienced and knowledgeable real estate professionals.
Choose someone who is working full-time, and is available after business hours. Part time agents may have other commitments or less business connections.
When you find some agents, arrange a meeting to ask questions. See how you two can
get along, and how responsive the agent is to your needs and concerns.
Once you provide a detailed list of your buying criteria make sure it is final. Don't waste your agent's time by changing your mind after you have seen a couple of homes.
When you are unhappy with your agent, ask the agent's broker for help to resolve existing problems. If they still persist the broker can designate another agent from the same office to work with you. Should you decide to hire someone working for another broker you may have to wait until the listing contract expires. If your agent has exclusive rights to sell you owe the commission to that agent when your house gets sold within specified time.
How to work with an agent
The bottom line is that agents' incomes depend on the total volume of sales, and there's no guarantee that all agents have their clients' best interest at
Do not allow high pressure tactics to make immediate decisions.
Never tell anyone that you are desperate to sell or buy quickly.
Stick to the appraisal value if you are pushed to lower the price of your home.
Disregard buying suggestions at the price level higher than your limit.
Verify prices if you are told that all homes in the area cost more than you are willing to pay.
When buying a home, get own lawyer and inspector to avoid agent's affiliations with 'sale facilitators'.
See if you can find a better deal when you were referred to a lender since your agent
may collect a finder's fee.
Have everything you want in writing and don't accept verbal promises.
Ensure you understand your contract with the agent before you sign it.
Don't sign a listing contract longer than for 90 days. A long term agreement will tie you up if your relationship with an agent turns bad.
What questions to ask
If you sell in a slow market ask how your home will be marketed. Look for signs of well defined strategy which goes beyond listing with MLS and waiting for things to happen.
Test how much agents can lower the commission. It is not written in stone and you can negotiate, starting from the number they give you.
When selling ask if they can offer some incentive to buyers' agents. 0.5% or more can make a difference when you need to sell quickly.
Inquire about the number of properties bought and sold. They are objective performance indicators.
Ask for information about recently sold homes in their area. You can learn more about local markets when you know the difference between listing and selling prices.
Clarify your agent's role - buyer's or seller's agency vs. dual agency.