The Rules of Real Estate (or Working With a Realtor) - As Presented by Joe Minnesota!
How Realtors Get Paid:
- Traditionally, Realtors are paid a commission by the sellers of a property. Typically a listing agent will list a home for a certain percentage of the final sales price (sometimes less any seller paid closing costs). The listing agent then offers a portion of that percentage to a buyer's agent through the multiple listing service (MLS). If a buyer's agent from the MLS brings a buyer with an acceptable offer, that buyer's agent will earn the commission offered by the listing agent upon successful closing of the home.
- Procuring cause is a big issue for Realtors. Open houses, traditional sellers or new construction opens, are good ways for Realtors to meet potential buyers. Unfortunately, they have the seller's best intentions in mind, not yours. Realtors who have an open house, and register someone in the open, typically do not pay out a buyer's agent if you do not already have representation at the time you went through the open house. You can always have a Realtor advise you after the fact, but if you want that service, you'll typically have to pay for it out of pocket at closing. To avoid this, read below for the rules of buying a home.
Rules of Buying a Home:
- Representation: Be represented by a buyer's agent and buyer's broker. If you do not have a representation agreement with a Realtor, everyone you meet will be representing the seller and their best interests, not yours! If you go into an open house, the Realtor's best interests are focused on getting the seller the most amount of money and the best terms possible. That Realtor does not have your best interests at heart, no matter how nice they might seem. Working with a buyer's agent ensures your needs and concerns are put first! They'll help you negotiate the best price and terms possible and ensure you get the home you want and don't have to settle for home #2 on your list. Oh, one last thing... it's FREE to work with a buyer's agent, so why not have a professional in your corner?!?!
- All things go through your Realtor: Once you have representation, EVERYTHING goes through your Realtor. If you find a home you like online, call your Realtor. If you see a home you like while driving down the road, call your Realtor. If you see an open house and want to go in, call your Realtor. Everything, and I mean everything, goes through your Realtor. The reason being is "procuring cause." If you have a buyer's agent representing you, you want them to make all the arrangements for you to see a home. You do not want to involve the listing agent until you're ready to write an offer and your buyer's agent will take care of that for you. Remember, the listing agent only has the seller's best interest in mind, not yours, so even something as innocent as an open house might seem ok to you, but you're putting yourself in potential danger in a "procuring cause" dispute between the agent at the open house and your buyer's agent. If the agent at the open house says they were the procuring cause attracting you as a buyer, you, not the seller, might be responsible for paying your buyer's agent at the closing table. EVERYTHING goes through your Realtor first!
- No cameras/video cameras: When viewing homes, leave the cameras in the car. Sellers do not want you taking photos or video of their private homes. They're being kind enough to let you come through the home, return the favor by not taking photos of their home and personal belongings. It's just a courtesy. If you want to see photos, check out www.Realtor.com or the home's virtual tour. Remember, your Realtor can always take you through the home again if you like it or want to see it again to refresh your memory.
Rules of Selling a Home:
- Don't Let 'Em In: Safety is number one for you, the seller. If an agent comes by for a showing and doesn't have a confirmed showing appointment, do not let them in. Call your Realtor right away and find out what's going on. If you are concerned for your safety, call the police first, then your Realtor after the police arrive. If someone stops by and wants to see the home but doesn't have an agent, don't open the door! Have them call your Realtor for a showing, or call your Realtor yourself and the Realtor will meet the buyer in a safe off-site location first to confirm they are really a buyer. Anyone who is authorized to be in your home should make an appointment through the proper channels and should enter by using the lockbox code to get in.
- Safety and Your Valuables: When your home is listed for sale, store, secure, or move your valuable items. Realtors can't keep an eye on their buyers, or their kids, at all times. If you have valuables, put them in a secure place or out of sight for all showings. If you plan to move (you should be, your home is for sale) pack them and store them in a safe location. Thieves today are stealing Wiis, controllers, cell phones, money, jewelry, iPods, electronic gadgets, and more. Out of sight, out of mind for thieves.
- Keepsakes: If you have an item in your home you're emotionally attached to and it's not going to be a part of the real estate sale, pack it. Don't leave out that gorgeous mirror from Grandma, that antique chair from Great-Grandpa, or that stained glass piece of art you plan to move. If a buyer wants it, they'll ask for it and they may make the deal contingent on getting that item you don't plan on selling!