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Working With Real Estate Agents: Common Myths

Discussing finances

What’s the biggest myth you’ve heard about working with a real-estate agent? Most people would answer that they’ve heard real estate agents aren’t that helpful with finding a home and they’re just in it for the money. Others would say that real estate agents get you to sign a Faustian-like contract that is impossible to get out of. However, both myths aren’t true and working with an agent can be very helpful for a first-time home buyer.

Before you write agents off completely, follow these tips:

Myth No. 1 — I'll get the best deal on the house I want if I only call the agent listed on the For Sale sign.

That agent is contractually bound to represent and get the best deal for the home seller. Work with the agent in a fair and professional manner, but do not disclose confidential information to the agent.

Bottom Line:
If you tell a seller's agent the top dollar you will pay for a house, the agent must pass that on to the seller. Take time to learn about agent’s duties and loyalties before you start home shopping.

Myth No.2 — The agent told me I had to sign a Buyers Agency agreement before he could work with me. I did and know I'm unhappy with the relationship.

You may know you’re a good match with an agent on the very first day you meet, but what if you aren't sure? The laws regarding buyer's agreements vary from state to state, and some states do require an agreement before homes are shown. You can dissolve the agreement, but you may be liable for commission if you buy with another agent. If you don't live in a state where this is legally required and an agent asks you to sign an agency agreement before you feel comfortable about it, try one of these alternatives:

• Ask the agent to work under a verbal buyer agency agreement for a short time. Some states allow this, giving you time to become familiar with the agent before you sign a formal agreement.

• Ask the agent to write a buyer agency agreement that covers a very short period, such as a day or a week.

• Find out if the agent can offer a non-exclusive buyer agency agreement. The agent would be your buyer's agent, but you would not be tied exclusively to her.

• Let the agent continue to be a seller's agent--just don't disclose confidential information.

Bottom Line:
If your state requires a buyers agreement be made before an agent shows you different homes and you aren't comfortable with your current agent, it may be best to work with someone else.

Myth No.3 — I can find more homes for sale by calling more than one agent.

Maybe, but maybe not. If you’re home shopping in a specific area, and the agencies belong to Multiple Listing Services, it means they all have access to the same properties.

Ask agents what areas they cover. Small-town agents may work a multi-county area. Agents in a city may restrict themselves to certain neighborhoods or subdivisions.

If you sign agreements with more than one buyer's agent, make sure the contracts are worded so that areas and duties do not overlap. For instance, Agent X works for you only in County A. Agent Y works for you only in County B.

Bottom Line:

Researching and showing properties is time-consuming, so you'll get better service if you find an agent you like (within a given area) and stick with that agent.

Myth No.4 — The agent with the most listings in town is the best agent to call.

Think about that. If an agent has that many listings to deal with, how much time do they have for buyers, especially buyers who may want to look at properties other than theirs?

Many top agents are turning to team systems, so time may not be an issue, but it's something to ask about when you interview an agent.

Bottom Line:
A brand new (competent) agent can be every bit as effective as a seasoned pro. Someone working with fewer clients will have your needs in mind constantly. Hire the person, not a lineup of listings.

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