“I wish someone had explained to me the benefits of working with only one real estate agent at a time, and how real estate agents are paid.”
Some buyers think working with different agents at the same time yields better results. However, that’s not the case. Most real estate agents get their listing information from the same source, the Multiple Listing Service (MLS).
For example when you go to an Open House, the hosting agent asks if you’re already working with a REALTOR®. If you are, they will honor that relationship and not solicit your business. If you’re not currently working with an agent, this is a great opportunity to interview the agent and find out if you’d like to work with them. Whether buying or selling, you will choose one agent and that agent will represent your best interests in the transaction.
How Are REALTORS® Paid?
Another issue that is often misunderstood is who pays the real estate agent’s commission. There are usually two parties to a transaction – the seller (represented by a listing/selling agent) and the buyer (represented by a buyer’s agent). It's quite common for the seller to have a listing agreement with their agent and agree to pay them a commission. In a normal transaction, that commission is split 50/50 between the buyer’s agent and the seller’s agent. Occasionally, there are agreements between the buyer and their agent where the buyer will compensate their agent.
National Association of REALTORS® (NAR)
In the U.S., most real estate agents are members of the National Association of REALTORS® (NAR) and are bound by a strict Professional Code of Ethics. The National Association of Realtors has a system of grievance and if a person isn’t satisfied with the performance of its members, they can file a complaint against the errant member. So whether you are buying or selling, it’s CRUCIAL that you find ONE great licensed agent who’s a member of NAR to work with and represent your best interests in a real estate transaction. Non-members aren’t bound to the same standards and ethics.
At Locations, we have a Buyer’s Agreement that buyers sign when they’ve chosen the agent they wish to work with. This document spells out the scope and obligations of both parties. By signing the Buyer’s Agreement, the buyer is “hiring” that particular agent to represent them and the agent promises to give their 100 percent effort when working for the client.
What happens if the relationship sours? If you’ve decided you no longer wish to work with that agent, just give notice in writing that you want to end the Buyer’s Agreement and you’re free to work with another agent. When ending the Buyer’s Agreement, be upfront and honest with the agent first. This is their livelihood and their reputation, and posting negative comments in social media before speaking with the agent can cause a lot of damage.
How Do You Find a Great Real Estate Agent to Work With?
One of the best ways to find a great REALTOR® is asking family and friends for referrals. Of course, if you’re a foreign buyer it’s a little more challenging. These days, research over the Internet is easy and you can email a REALTOR® on the other side of the world and get an answer quickly.
Even if family or friends refer a real estate agent, it’s imperative that you take the time to meet and interview the agent, and review their qualifications, experience, expertise and knowledge. Bear in mind, the average real estate transaction takes about 45-60 days to close (and sometimes longer due to unforeseen complications), so it’s important that your values, personalities and goals mesh. This may be the largest purchase of your life, so it’s very important that you like your agent and trust them to represent your best interests in the transaction.
Qualifications and Requirements
Of course, you want your real estate agent to be professional, honest and ethical, with strong integrity and character, but the agent you choose to work with must also be responsive and reliable, able to answer or return phone calls and emails in a timely manner, walk you through each step of the process and clearly outline every document that you will need to sign.
Consider these questions when selecting your agent:
- How much experience and knowledge do they have when it come to the local real estate market?
- Are they able handle any unforeseen complications in the transaction?
- Do they understand the nuances and differences of real estate in Hawaii?
You'll want to deal with a professional, not someone who sells real estate on a part-time basis.
Different Types of Agency
A REALTOR® is a licensed real estate agent who you hire to represent and protect your best interests. If you are a buyer, a REALTOR® will help you to find a property that matches your requirements and get you that property for best price with the most favorable terms. If you are a seller, a REALTOR® will help you to sell your property for the highest price with the most favorable terms.
Clearly, the buying agent and the selling agent have different objectives as they represent opposing parties. However, it’s the agents’ duty and responsibility to reach a compromise and attain the best price and terms for their clients.
On occasion, an agent may represent both the buyer and the seller. This is called dual agency.