Selecting a realtor to represent you

Who are realtors?

Realtors or real estate agents are those licensed by the State to represent buyers or sellers in the transaction of real estate properties. They go through a program of study and training in order to be licensed. Most of them are associated with real estate brokerages such as Prudential Preferred Realtors, Jaqua Realtors, ReMax, etc.

Types of realtor service

There are two services that realtors provide in the transaction of a home.

Listing Agent

This is the realtor who represents the seller of the house and helps the seller market the house. (Read the 'Selling home?" section of this website to learn all the services a listing agent provides the seller). If you look at the sale sign in the yard, you will see the name of the listing agent and the name of company with which the agent is associated.

Buyer's Agent

This is the agent who represents you as the buyer. The agent will help you locate homes that meet your specifications, arrange for private viewings of these homes, help you prepare an offer for the home you like, arrange for home inspections, negotiate the final price and contingencies, and finally help you close the deal.

Who pays the real estate agents?

When sellers want to get the help of a real estate agent to market and sell their property, they enter into a contract that specifies the "realtor commission" that will be paid by the seller to the lising agent at the conclusion of the sale. This is usually a percentage of the sale price. If the buyer of the property is represented by a 'buyer's agent', a portion of the "realtor commission" from the seller is given to the buyer's agent. Buyers do not directly pay their agent.

How do you select a buyer's agent?

In every open house you will meet a realtor. Even if you do not care for the house, don't forget to talk to the realtor. Ask them how many years they have been working in Kalamazoo as a realtor. Ask them about their recent clients who they represented as buyer's agent. Learn as many things as possible about their character, attitudes, and experience.

Ask your friends and family for recommendations. They are often the most reliable parties in helping you choose a good realtor. Don't rush into selecting a realtor to represent you. Don't sign an exclusive agency contract with a realtor unless you are sure that you can work well with him/her.

How about if you live far away in California but are moving to Kalamazoo? There are national websites that help you pick out realtors from any part of the country (for example, check out www.homegain.com). Unfortunately, these companies refer you to realtors who sign up with them and pay membership dues. But under the circumstances, this is an option.

What is an exclusive agency contract?

As mentioned earlier, listing agents have a contract with the seller that entitles the agent to receive a commission at the conclusion of the sale. The exclusive agency contract is a similar contract between the buyer and the buyer's agent. The contract is not about any commission to be paid to the agent but an agreement that the buyer accepts the agent to represent him/her for the duration of the contract.

Why such a contract? From the perspective of the realtor, buyer's agent gets a share of the commission only at the conclusion of the sale. If a buyer goes with another realtor after viewing 50 homes in two months, the agent who spent all that time and money arranging for these viewings have lost any chance of getting paid for the work. There are many agents who insist on a contract before they start working with a buyer.

From the perspective of the buyer, such a contract is bothersome. What happens if the agent does not have time or interest in finding them a home? What happens if they find a 'For Sale by Owner' home that they can buy directly from the seller? What happens if they find another realtor who is much more compatible with them?

That is why, it is important to take your time to select a realtor. Don't rush into any contracts! Learn as much as possible about realtors you meet during open houses. Ask your friends, colleagues, and family. And then make a decision.