My blog generates email and some of it is not spam. I recently received an email from a person who wanted to see a condo that is on the market.
The condo is not my listing but I can show any property listed by any REALTOR. I do however have to ask the person if they are currently under contract with a real estate agent. They hate to be asked that question. I can not work with a buyer who has an exclusive contract with another agent.
By contract I mean a contract for exclusive representation by a real estate agent who will represent the buyer. Buyers agents get paid through the sellers comission, but can only represent buyers that they have under contract.
The woman who sent me the email responded by saying that she thinks she is under contract. I followed up with another email and a phone call in an attempt to figure out if I could show her the condo. Had it been my listing I would have just shown it to her because it would be within the scope of my duties and responsibilities to the seller. I found it disturbing that she thinks she is under contract but does not know. Anyone who signs a buyers contract with an agent will know that they did, and must have a copy of that signed contract for it to be legally binding.
She believes that she entered into a contract with a REALTOR because she filled out an on line form. I looked at the form and it is a bit misleading but is not a legally binding Minnesota real estate contract because it had no beginning or ending dates on it and was missing some other key pieces.
Since she believed that she was under contract I encouraged her to contact the agent and ask to see the condo. She did say that she wanted to work with that agent but he did not respond to her email right away so she moved on thinking she could get me to show her the condo and then worry about the other details later. I feel her pain, she just wants to see the condo, because she needs a place to live.
She has never met the agent and does not know him. I asked why she chose him and she said "he looks like an earnest young man". I went and looked him up, he is maybe 25 years old and has had a real estate license for about six months. With so many agents in the business it is possible to find an agent who has some experience.
Is this really a good way to choose a REALTOR? He could be fantastic, or maybe not so fantastic. The woman just wanted to see the condo. This I understand. When I explained to her what a buyers agent does she seemed blown away when I mentioned the contracts and explained representation.
Buying a house is a big deal and so is choosing an agent. My suggestion is to ask friends, family members, co-workers and neighbors if they know anyone who does a good job. Interview the agents, ask a lot of questions, ask for references. Choose someone that you feel you can trust. Since you may be spending some time with your Realtor you may want to make sure that he or she is someone that you don’t mind being with.
Are they interested and knowledgeable on the neighborhoods and housing styles that you are most interested in? Do they have time for you? It makes no difference which real estate company they work with because it isn’t the real estate company that shows or sells houses, it is the agents.
On line lead aggregators that have all of our listings and encourage consumers to "find an agent" are referral services. No one checks the quality of the agents, any agent can sign up and pay for the leads. Don’t become a lead.
Don’t entrust your biggest most expensive purchase to an earnest face on the internet and don’t give away your contact information by filling out an on-line form so that you can become a lead for someone to put into their ‘drip email marketing campaign, you are smarter than that. It is alright to find an agent on the internet. I have met many of my clients that way but the internet is just an introduction. Ask questions and get references before signing anything.
For some guidance please see the Minnesota Attorney General’s Home Buyers Handbook. It is a little out of date, and in a PDF format but it is still the best resource around and is not written by anyone who is trying to sell something.
Hey, I have an earnest face!
Seriously, this is good advice. Every agent has to start somewhere, and I’ve certainly worked with clients who chose me because “I looked nice”, but hopefully they *stuck* with me because they knew I would watch out for their best interests!
Lisa – I think it is your inner beauty that keeps them coming back. You are lovely inside and out!
“Don’t entrust your biggest most expensive purchase to an earnest face on the internet…”
Entrust your biggest most expensive purchase instead to someone offering 50% off on faces. Now that’s a discount brokerage business model you don’t see everyday…
(Actually you see it every other day, by definition).
There are many experienced agents who are clueless, and many beginning ones who are very sharp. I always tell potential clients, shop around for a buyers agent first, then work with them to find a home. Ask them detailed probing questions and see how long it takes them to respond and how intelligent they sound.
Many people still believe they can improve their chances of finding a home and one even told me: “I’ll never sign anything because I want to see what other agents show me”. They don’t get the concept of MLS.
Moral of the story, educate them about agency and how the process works.
As a consumer, I can say that it is so easy to get stuck with the first agent you meet because you so desperately want to see houses. Our last experience with buying a home was a comedy of errors because the agent was simply a clown. This time, we did our homework and the process was smooth and painless. So, well said, Teresa.
I don’t know. The one time I tried to get a customer’s signature on a buyer broker agreement, they told me that if it was required they wouldn’t work with me, so I told them it wasn’t. Three days later they were in escrow, because I did a good job as a salesperson.
I could have done a good job and still gotten fired, of course.
Though I wish I had this killer presentation where buyers would sign on the line and then be easy to sell to, I suppose on some level I’m reluctant to see this for something other than the sales job it is. I don’t sign anything to talk to a guy at KMart, and if I walk over to Walmart to buy the same item, he doesn’t care. Sure, we spend a lot more time, effort, and gas on our people, but on the ones that don’t fire us we make a lot more money than the KMart guy.
Does it hurt when some guy buys from someone else after you have a lot of work invested in him? Sure it does. But the escrow check I cash helping the next guy heals all wounds.
John,
I also show homes without a contract, and have never had anyone buy a home through another agent as a result. I think buyers should be able to see the home first and then sign a contract if they wish to have me represent them. I just won’t show homes to someone who has a contract with another agent.
Teresa,
We met at the Mo Anderson Class. That lady is a powerful speaker. Boy, she can really change lives.
I was online to see your blog, because I have one, (which really needs help, because I really don’t have the time).
I think this article is clear and well written. Am I allowed to “borrow it” If I reference and link to you?
I wish you continued success on your blog, and meet you again, in the near future.
Guy
My only suggestion is to be careful when evaluating your fellow real estate agents about their experience, and passing this on to a customer. Just because someone looks like they have been an agent for a short time, it doesn’t mean they are incompetent.
Take me for example, I moved to Minnesota a year ago and got my license. I then found out I was pregnant and just had the baby on Halloween. Because of this I have taken my time getting into the business. Am I inexperienced? If a potential client were to talk to me, they would find out I just moved from Florida where I was one of the top agents in my office with a $10 Million production for 2005. I left this behind so my husband could take a job transfer because I knew with my work ethic I could once again rebuild my real estate business in Minnesota. I have plenty of experience to represent a seller or buyer in Minnesota, and have done my market research about the area.
I have worked with agents that have been in the business for 25 years and do not know what the contract says, or how to write up a counter offer. The old saying “Do not judge a book by its cover” works well in this instance. Good post Teresa, makes for a great discussion!
Jennifer, I agree 100%. I have met agents with one year of esperience and others who have that same year of experience 25 times. I have run into agents with 30 years of experience where I had to write a counter offer because that was the least obnoxious way of correcting numberous mistakes and omissions in a contract. Welcome to MN, stay warm!
Thought I’d revive this excellent post! There is no need to base the selection of an agent on looks or hunches. Your advice to ask friends and family for a sound recommendation is a good one. We are lucky in Wisconsin in that in 2009 they changed the laws. We used to have to literally accost strangers who merely asked to see a listing whether they wanted us to serve as the seller’s agent or their buyer’s agent. If we did not do this prior to the showing it was literally breaking the law. We had to ask buyers in the car or on the doorstep of a home to sign documents (although we couldn’t force them to) acknowledging that agency disclosure statements had been made prior to the showing. Now we don’t have to do that unless, during the showing, the prospective buyer starts asking questions that would be answered different ways depending on who you, as an agent, are representing during that showing. As soon as those topics come up that is when I explain the different types of representation and what it means to have a buyer’s agent vs having me represent the seller (of course it gets more complicated if it is my listing). That discussion usually makes it pretty clear what the advantages of a buyer agent are and clearly demonstrates how the buyer can best utilize the agent’s talents to their best advantage. Every agent should practice rattling off the virtues of working as a buyer agent. In my opinion this is discussion you want to have, not avoid. If a buyer doesn’t understand that they need their own representation, they may have a hidden agenda or not really be serious about buying.