One of my clients that is now a dear friend wanted me to write about this because new buyers just don't know what really goes on behind the scenes with agents and their commissions.
Dear Lizette,
My wife and I are just now getting in the mood to look for a new home. After researching some on the Internet we have found a few homes that meet our needs. We really liked one of the homes and called the listing agent to go take a look. She met us there and we now want to put our home on the market because we want this one we toured. We have also gone to a few open houses. Also, we would like you to list our home and represent us in negotiating the contract on the new one. Can you help us? Rob & Jenny
Dear Rob & Jenny,
Thanks so much for emailing me. I'd love to assist you with the sale of your home. I do wish you would have called me before going to look at the home with a listing agent. This presents a problem that she was the one that showed it to you. When you want to be represented, your agent must show you the home.
It's a bit sticky also when you go to open houses and the listing agent shows you the home. It seems innocent enough.
Buyers do need their own representation to get the best deal in negotiations. When you sign in at an open house without your agent, be sure to tell the hostess that you are working with someone.
This prevents problems for you and your agent later. Even if you haven't picked someone yet to help you just stay neutral about it till you get the right one.
Most often agents are hosting open house to pick up new clients. They aren't too happy when your agent tells them later that she is working with you. It's kind of like first dibs. Most times it can be handled in a friendly fashion and sometimes not.
Agents work on commission and they don't get paid until you get to a successful closing and it is paid by the seller. The seller agreed to the percentage amount with his listing agent in their contract.
An agent that has first showed you the house can later go after your agent's commission after closing if she can establish she had "procuring cause". Which means, she showed it to you first. Now you can see why it would be a headache for your fabulous agent that helped you all the way through closing.
Bottom line:
Research a good agent as well as you look for a house online. Pick someone to help you before you call or go look at homes with a listing agent. Your Realtor will work hard for you and appreciate that you have put your trust in them. Leave it to an expert and you will glide all the way to closing on a wonderful home.
Good post Lizette. I always tell buyers that it is almost never to their advantage to call the listing agent directly as it puts them at a real disadvantage come negotiation time.
Lizette - You handled that very well. It is unfortunate that the buyers do that but often it is because they "don't want to take up our time when we are not ready".
I would think that if there is an agents name in mind they should tell the Open House agent that they do have someone. But my experience is "we are not tied into anyone in particular".
I wrote a post last month I often wonder about procuring cause in California. I have a case that our office won and an experience that I had with a client.
I hope they get your sincerity from you and beside listing their home I hope they buy with you too.
Lizette,
People do not realize the various hurdles they need to jump over to do things the way they want. One false move and they are stuck due to protocol or the law. I wrote a similar post today regarding inspector clients.
Lizette, agency is so often misunderstood and agents must constantly explain it to customers. In Texas it is mandatory.
Thats does sound a little 'sticky'. Hopefully in the case of Rob & Jenny, everything worked out.
Lizette In Virginia signing in at an open house is not a problem. I've represented many clients who have done that. However, if it was a new home the builder insists that the agen accompany the buyer on hr firdt visit
Lizette - I echo Karen's comment above. The agent that writes the offer will win unless there is an existing agreement with the other agent. However, if a client visits new construction without you that's another story.
A timely word to the wise as the spring home buying season comes upon us (thought it's difficult to think about that with the snow storm on the way). It's NOT to early to start thinking about the process. Re-blog here.
Lizette, an excellent AR post. I'll have to share this with my buyer's so they can understand all the hurdles of being represented.
Lizette, so many people do not understand the process, suggested this post.
Lizette, it seems like we can preach this until we are blue in the face. I think some really do not understand and others just don't care. Great post.
Lizette - It is also important for them to understand that the listing agent represents the seller.
Excellent post Lizette. Many people do not understand how it all works, and we need to continually educate our buyers:)
A great post Lizette!
Hey Liz,
you are absolutely correct! :) It's best for clients to take the time to do their research on who they will be working with. That connection is so important. Thank you for sharing this story with us :)
Lizette--So many people just don't understand this...no matter how many times they are told to find their agent and then look at houses. They don't want to "bother" us...please bother me before you look not after. It is my job after all! Nice post!
Lizette, You have a way with words! I hope it is okay I reblogged so I would have it handy for consumers here in Laramie to look at. (You are the first one I've ever "reblogged" so I'm not sure of the ettiquitte) I'll "suggest" this one, too!
Lizette - It's always best that buyers pick a Realtor first, even if they're not ready right away.
Lizette,
You stated this scenario so well.....and I preach all the time to new Buyer leads......yet they don't get it. In new construction too, this is where the Buyer falls into NO representation because they think it is very innocent.