Home Buyer, Meet REALTOR® – REALTOR®, Meet Home Buyer
Buying real estate is a major financial decision. Whether it’s’ your first home, or your tenth it is important that you are comfortable with the guidance you are receiving from your real estate agent. A recent survey that was conducted of home buyers revealed five different areas that buyers wanted to know about, but quite often did not discuss with the agent.
Here are the five areas that identified as something they wanted to know, but were afraid to ask.
The first issue was that of real estate agent fees. First-time homebuyers, may be unsure of how the buyer’s agent gets paid. Often times they are reluctant to make the first step in buying a home for fear of having to pay the commission, and they are uncomfortable approaching the agent or setting up an initial meeting.
Let me comment about how commission is paid, and how it is split. Lets’ assume that you are the buyer and you are looking at a house with a list price of $500,000. And let us further assume that the commission is 6.0%, which results in a commission of $30,000. That commission is paid by the seller at closing, not the buyer.
That may sound like a lot of money, and it is; but let me show you what happens to that $30,000. Generally, the commission is split between the sellers’ broker and the buyers’ broker, often times 50/50. So, $15,000 would go to each side of the transaction. Of the $15,000 that goes to the buyers’ broker, a percentage goes to the actual brokerage company, and the remaining amout goes to the buyers’ agent. For simplicity, let’s assume that the broker and the agent split it 50/50. That means that the agent now gets $7,500 of the $30,000.
The buyers’ agent who gets the $7,500 has several expenses that comes out of that money. Most brokerages charge an advertising fee of a certain percent – lets’ say 5.0%. That amount is now down to $7,125. At that point the agent has a lot of expenses: state license fees, REALTOR® fees, Errors and Omission insurance; continuing education fees, car expenses; advertising, office expenses and on and on which all gets paid by the agent from the commission. The same goes for the sellers agent. The percentages and fees will vary depending on the brokerage and many other factors, but I think you get the idea.
Clients should feel comfortable asking about the commission; however, it is important to understand that the commission is generally the responsibility of the sellers side.
The second issue, and one that I think is critically important, is that of communication. The number one complaint that clients have with their agent, for both the selling and buying side, is that of communication. Whether it is not enough, too much, phone calls when they wanted text messages, text messages when they wanted emails, emails when they wanted phone calls, and any other combination you can imagine.
The number one complaint the agents have with their clients, for both selling and buying side, is again communication. Whether it is not enough, too much, phone calls when they wanted text messages, text messages when they wanted emails, emails when they wanted phone calls, and any other combination you can imagine. You get the idea; communication is critically important.
And let us not forget that one client may want communication one way and the significant other may want it another. It is very important to have the discussion up front so everyone is clear on the matter.
The first client I ever had was a lesson for me. I would send them an email (which is what they both wanted) of homes that I thought they would be interested in. My productive time is early morning hours. The next morning I would receive a reply from them that they sent about 1:00 AM. This went on for several days – I sent out emails early in the morning, and they responded in the wee hours of the following day – until we forged a list of homes they wanted to see. They bought a house the next week. Talk about communication -or should I say “Communicate about how you want to communicate.”
The third issue is one that goes hand-in-hand with communication and that is expectations. I recently had a client that was a sure-fired sale. But they never seemed to react to anything I sent them. They were actively searching on my website, but never wanted to see anything. I was very discouraged until I learned that the husband was going to be reassigned in the area, and they were waiting until he found the area he would be covering before they committed to a house. Clearly my expectations did not match theirs!
Whether you are a buyer or seller, the agent and you should discuss your expectations. If you as the buyer or seller need to make a move by a specific date, tell the agent. If you are in no hurry, tell the agent. Otherwise, the agent may take your slow response and disinterested.
The fourth issue is that of experience. This is one issue that I may disagree with many real estate agents. The idea of experience often times equates to years of selling real estate. Experience is a great asset, don’t get me wrong. But if those years of experience have resulted in doing things the same way all those years, I doubt that you will be getting the best agent. By the same token, I have seen new agents who are educated in real estate and have a firm commitment to working in the best interest of the clients. If you are considering me as your REALTOR®, I will undoubtedly tout my “years of experience.” But do not discount a new agent. Remember, they have a wealth of expertise with the brokerage company from which they can rely.
The fifth issue is important and quite often goes unnoticed, and that is the relationship between clients and REALTORS®. I mentioned before, having an agent that represents you is critically important. Home buyers, especially first-time homebuyers should feel comfortable with the guidance they receive from the REALTOR®. For everything to a home inspector, deciding how much earnest money they should put down. A good REALTOR® should emphasize that they will work with the buyers to closing and beyond. I have always requested a copy of any home inspection that is done on behalf of my buyers. More than once I have been contacted by the buyers six months later asking if I had a copy because they wanted to follow up on some minor repairs.
If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.
As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712=8808 or email me at RolandLow1@gmail.com.