Tuesday, April 10, 2007

Finding the Best Match When Shopping for a Buyer Agent

By June Fletcher
Wall Street Journal

Like anyone else in business, real-estate agents flock to where the money and power is. And right now, it's in the hands of buyers.

Currently, 64% of consumers use buyer agents when they purchase a home. Agents want to push that number higher. According to the National Association of Realtors, the fastest-growing designation that agents are in training to acquire is Accredited Buyer Representative.

Still, most agents hedge their bets: They want to represent sellers in good times, and buyers in bad. Since most of the past decade has been a seller's market, few agents have made it their business practice to represent buyers exclusively. Out of 60,000 agents who are members of the Real Estate Buyer's Agent Council, only 2% are exclusive buyer agents who never take a home listing, NAR says.

As a buyer, it's always beneficial to have someone carry your spear in negotiations with a seller or builder. And it's best for the buyer if the agent never takes listings, since you never have to worry about divided loyalties.

But since it may be difficult to find an exclusive buyers agent, how do you evaluate what you're more likely to find -- an agent who divides his or her time between getting and showing listings and representing buyers?

The system, as it exists now, is hardly ideal for buyers. Most people meet real-estate agents by visiting open houses or inquiring about ads they've seen in the newspaper or on the Internet. Inevitably, an agent will ask you if you are "working" with another agent. If you say no, he will send or give you some listings and ask if you'd like to visit some of the houses. If you do, he will "claim" you, at least when it comes to that house. In some states, you may also be asked to sign an exclusive buyer's agency agreement. Should you decide to buy the home, the agent will expect to represent you during the sale.

This practice has obvious time-saving advantages for agents, but it's not ideal for buyers. Shopping for an agent is a lot like dating: You're unlikely to fall in love with the first one you encounter. Even if first impressions are good, you may decide that the chemistry isn't working after you've spent a day or two touring houses...or you may decide that you'd like to play the field a bit before committing to a particular person.

So how much loyalty do you owe an agent? The legal answer is -- none, at least if you haven't signed a buyer's agreement. Personally, however, it's much harder to shrug off someone who's spent time squiring you around and sending you e-mails, even if -- as happened to me one time -- the agent is so fond of pastrami and pickle sandwiches that you can barely stand to be in a car with her.

Janet Branton, a senior vice president at NAR, says buyers have a right to an agent who makes them feel comfortable and will represent them competently. But out of courtesy, you should inform agents if you no longer want to work with them. You don't have to defend or justify your reasons (while home shopping in Chicago recently, Ms. Branton stopped working with one agent because he was too busy to show her homes; another because he refused to use e-mail), but it's polite to let them know why.

You should also give this information to any new agent you decide to work with. That's because if the first agent showed you a house and you decide to buy it using a different agent, the first agent may still have a right to receive the buyer's commission (which is typically -- but not always -- paid by the seller at closing).

Squabbles over commissions are handled between agents or go to an agent arbitration board, and buyers are rarely called in to testify, Ms. Branton says.
Still, I doubt that most buyers want the agent they eventually choose to be cheated out of a commission.

The bottom line: Shop around for agents until you find the right one for you, and don't let anyone guilt-trip you into a relationship that makes you uncomfortable. "Nobody owns you," says Ms. Branton. But once you have found that agent, be upfront about other ones you've "tried out," and which listings you've visited with them. And then be loyal -- you'll be rewarded with better service.

Richard's notes... When a home-buyer calls me, I always recommend that they choose someone they can trust and enjoy to work with. It's also true from the agents perspective. If you expect your agent to provide you updated property information incuding any pocket listings, you have to demonstrate your commitment to the agent by getting pre-approved through their perferred mortgage broker. It's kind of like give-and-take.

Keep in mind that real estate agents meet all kinds of people. Not everyone is a loyal person with a great job and excellent credit. As like buyers and sellers, we have a right to choose the person we want to work with. If you feel comfortable, then go for it!
To search for homes, visit: http://www.homes.la

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