Choosing a Real Estate Agent: Beware These Little White Lies
So: No deal, no money. Suddenly agents' interests don't appear quite so precisely aligned with yours, do they?
To be fair, agents rely on repeat clients and recommendations from those who are satisfied with their work. But you need to protect yourself too. When you interview agents to sell your house, listen carefully for these statements. If you hear one, proceed with caution.
1."I think I have a buyer for your house." In an initial listing appointment, agents frequently hint that they have a potential buyer for the home. It plants the idea in the seller's mind that this could be a done deal sooner rather than later -- and that's music to the ears of sellers who would love to skip the part where you have to keep the house immaculate and show-ready. But that's not a good enough reason to give the guy your listing; if he really has a buyer, he'll show your house even if you list with someone else.
2."We just got a great offer!" The offer is significantly less than you -- based on your agent's advice -- just listed your home for. So what's so great about that? In most cases, an offer can be seen as an opening volley. That's fine. But let's call a spade a spade. Kudos to the agents who present low-ball offers with the admission that the only great news here is that someone is interested in negotiating with you. An agent who states it otherwise is just trying to get to the finish line, where his commission check is waiting.
3. "There's no problem with me representing both the buyer and the seller." It may not be a problem for your agent, but it could very well be a problem for you. A seller wants every last nickel he can squeeze from the sale of his house and a buyer wants to avoid overpaying by that very same nickel. How can one person really represent both those interests at the same time? Dual agency isn't allowed in many states, and in states where real estate licensing laws permit it, the practice must be disclosed to both buyer and seller, said the National Association of Realtors. If you live in a state where the practice is allowed, the only way to avoid it is to work with an exclusive buyer's agent -- someone who doesn't take listings or work for an agency that also represents sellers. You can find one here. And if you're stuck in a dual agency situation, show your agent these guidelines that he is expected to follow.
4."In my office, all the agents are like a family." A family of snakes who eat their young, perhaps. Sure, they may all share the water cooler, but agents are in competition with one another, even the ones who share the same office space. They compete for listings and for the loyalties of buyers. There are plenty of stories about the town's barracuda agent (and every town has one) who sabotages a co-worker's deal to get their own client in the house. How does it affect the real estate consumer? You want your agent to be discreet. The reasons why you are selling or the size of your budget is information that can't be shared with the guy whose desk his abuts. Ask around town for references. The top agents are the top agents for a reason.
5. "I didn't see anything in the title report of concern." Not actually a lie if they haven't looked at it, is it? Getting a clear title is of paramount importance to the buyer. As a buyer, you need to have a title that is free of encumbrances, something that proves the seller has the absolute right to sell you the house. Technically, it's not the real estate agent's job to alert you to potential problems, but the good ones will flag them if they see them. Those are the agents you want on your side. It's worth having the title report looked at by an attorney. You can also take some comfort if the title insurer issues you a policy; they actually do read those title reports.