Question: Is there downside of using a real estate professional to help you locate and purchase your next home? There is no financial downside. A buyer's real estate agent's commission is paid by splitting the seller's real estate agent's commission, which was negotiated with the seller at the time the home was listed for sale. If there is no buyer's agent to pay a real estate commission, then the seller's real estate agent usually keeps the entire real estate commission. Without a buyer's real estate agent the best you can expect is the selling real estate agent represents neither party, but most likely they represent only the seller.  A real estate professional in most cases is also in a better position to negotiate a lower sales price than than a home buyer, because they have access to "current" comparative home sales information. Also, a real estate professional who has a "buyer agency" contract with a home buyer "exclusively" represents the buyer's best interests. 

Fact: When using a real estate professional to assist a home buyer locate and purchase a home, the average search time is 8 weeks and they view 10 homes. For home buyers not using a real estate professional the average search time is 14 weeks and they view 18 homes.

Fact: 49% of all home buyers start looking for a home before they put their home on the market. 

Fact: 91% of all homes are sold by a real estate professional

Fact:: 9% of all homes are sold by owner

Fact: Even when a mortgage company says a buyer is approved it does not guarantee that the mortgage company will fund the buyer's mortgage for the purchase of your home  

Fact: Real state professionals have errors and errors of omission insurance

If you have determined you need the services of a real estate professionals to help you locate and purchase your next home, let Pleasure Island Properties and Jeff Cain help you.

Fact: The number one reason someone sells their home on their own is to save on real estate commissions. 

Fact: Most people who shop for homes for sale by owner are doing so to get a bargain price and buy the home below "fair market value."

Fact:: If your home is not priced below market value most for sale by owner buyers will not buy your home.

Fact:: The number one reason For Sale By Owner sellers do not sell their home is because it was not priced right, below "fair market value."

Fact:: 78% of all homes for sale by owner end up being listed and sold with a real estate professional.

Fact:: 91% of all homes are sold by a real estate professional

Fact: 9% of all homes are sold by owner

Question: If your goal is to sell your home yourself to save real estate commissions and the buyers goal by buying a home that is for sale by owner is to get the home below "fair market value", who will win? The objectives of each party are diametrically opposed to each other. If you concede was it worth all the work and risk to save little or no money? If you do not concede will your home sell to a buyer looking to purchase a home for sale by owner?

Fact:: The best opportunity to get top dollar for your home is to expose it to as many ready and willing home buyers as possible.

Fact::  82% of real estate sales are a result of a real estate professional's contacts through previous clients, referrals, friends, family, and personal contacts?

Fact:: Real state professionals have errors and omission insurance to help cover the liability that can accompany buying or selling a home. Do you?

Fact:: Even when a mortgage company says a buyer is approved it does not guarantee that the mortgage company will fund the buyer's mortgage for the purchase of your home  

If you have determined you need the services of a real estate professionals to help you sell your home, let Pleasure Island Properties and Jeff Cain help you.

How To Select a Real Estate Professional to Help You with Your Home Search and Purchase

We recommend that you engage in the services of a real estate professional to help you with your home search and purchase. There really is no other way to know what the inventory of homes for sale is, without significant time and energy spent on an exhaustive self search. Why invest so much time and energy searching for a home when that process that does not have to take place? You can have the services of a real estate professional who only represents you and your best interests, at no direct cost to you.

Whoever you choose to help you find and purchase a home, we can not emphasis enough how important it is to use "only one" real estate professional, and stick with that real estate professional. We will tell you why later. What's the next step? The next step is to sit down with your real estate professional and talk about your needs, your expectations, your time frames, and your financial considerations. Let the real estate professional know if you are thinking about buying a new home, or a pre-owned home, or if you want to consider both. Let the real estate professional know what area you prefer to live in and what amenities you are looking for. You also need to let the real estate professional know what features you want. This is a good opportunity to bring out or formulate a list and review what is important, what would be nice to have, and what you can live without. This meeting should take about an hour to an hour and a half of your time. If you are a first time buyer, the real estate professional should also review the entire home buying process with you at this meeting. Your real estate professional should also set you up with a lender to get pre-qualified. Pre-qualification by a mortgage officer takes only a few minutes. You can go to our "All About Mortgages" section to use our pre-qualification calculator to help you determine how much you can afford to spend when buying a home. Getting pre-qualified tells both you and your real estate professional how much you can afford to spend, which is an important first step when looking for your home. It is even better if your real estate professional suggests that you get pre-approved. There is a significant difference between being pre-qualified and being pre-approved. If the real estate professional you are using or a real estate professional you are considering using does not suggest this orientation meeting, or does not ask these questions, or does not get you pre-qualified, then maybe you have or you are considering the wrong real estate professional and you should start looking again. 

How is a real estate professional compensated?: 98% of all real estate professionals are paid by commission only. The commission is paid by the seller unless the real estate professional discloses or arranges something other than that with you. It means you get to use the services of a buyer's real estate professional and it does not cost you a single dime. Pretty good deal, isn't it? If the real estate professional is being paid by the seller, doesn't the real estate professional represent the seller? The answer to this question is yes, unless you contract another "agency" relationship with the real estate professional. Real estate professionals have an obligation to state up front who they represent. A real estate professional represents the seller unless disclosed and contracted otherwise.

Buyer Agency -What Does It Mean and How Does It Affect You?: Buyer agency, what does this mean to you? It means that if you want a real estate professional to represent you and your best interests, you need to fully understand agency relationships and how they effect you. We will not dive into a complicated orientation about agency relationships except to outline the agency options buyers have with a real estate professional. When working with a buyer, a real estate professional can disclose and have one of the following agency relationships:

1. Buyer Agent: The selling broker/real estate professional (not the broker/real estate professional who has listed the home for sale) enters into a client relationship with the "buyer" and exclusively represents the buyer's interests.
2. Seller Agent: The listing broker/real estate professional enters into a client relationship with the "seller" and represents exclusively the seller's interests.
3. Limited Consensual Dual Agent: The selling broker/real estate professional enters into a client relationship with the "buyer and the seller" and represents both parties interests.
4. Sub-Agent: is another agent/licensee who also represents only one party in a sale. A sub-agent helps the agent represent the same client.  The client may be either the seller or the buyer.  A sub-agent must be completely loyal and faithful to the client.
5. Transaction Broker: The broker/real estate professional has not entered into a client relationship with either the "buyer or the seller" and acts only to facilitate the transaction, and represents neither party.

If you want to have your own real estate professional working for you and your best interests, it is important that you enter into a buyer agent contract with the real estate professional. This does not normally effect who pays the buyer agent's real estate commissions. Unless disclosed otherwise by your buyer agent, your buyer agent will still be paid by the seller, however they are now under contract to work only for you and represent your best interests. A buyer agency contract should be signed prior to you looking at homes and should be openly discussed at your first meeting with the real estate professional. Most buyers are not aware that if they are looking at homes with a real estate professional, and they have not signed a buyer agency agreement, and there has been no disclosure to the contrary, the real estate professional they have been working with is obligated to represent the seller. This is even the case if the real estate professional has spent many hours with you understanding your needs, showing you homes, reviewed your financial information, and may have even written a purchase offer, and has not even met the seller. It is in your best interests to have your real estate professional sign a buyer agency agreement.

If I sign a buyer agency agreement with a real estate professional am I obligated to use the real estate professional to find and/or buy a home? Yes and no. No you are not obligated to use your buyer agent to help you find or buy a home, however your buyer agent is entitled to compensation from the sale of any home you buy while your buyer real estate agent is under a buyer agency contract with you. Many sellers will not pay a real estate commission to a buyer's real estate professional if the buyer's professional did not show the buyer their home, and was actively involved in the negotiation. This could cause a commission liability for the buyer. Normally buyer agency agreements are easy for the buyer to terminate by providing notice of termination in writing to your buyer agent and/or buyer's broker, however, make sure you terminate the relationship before you go looking for any homes. Your buyer agent may still be entitled to compensation on homes your buyer real estate professional has already shown you. Read the buyer agency agreement carefully before entering into the contract.

This all sounds like legal mumbo jumbo to me. What does it really mean to me? It means that if you have not entered into a buyer agency agreement or a transaction agent agreement, or a dual agency agreement, the real estate professional you have been working with represents the seller and is obligated to pass on any information that might be to the seller's benefit. For example, if you put an offer on a home and you tell the real estate professional you are working with that you are willing to go $5,000 higher than the offer, your real estate professional is obligated to pass that information onto the seller. Be careful with an agency and be sure you fully understand it ramifications.

A final reminder. No matter who you chose to work with, make sure the real estate professional discloses themselves to you to be either your buyer agent, a transaction agent, or a dual agent. You are protected with any of those three options, although the real estate professional will not be able to do as much for you as a transaction or dual agent. Also, after the agency relationships have been established make sure you schedule the orientation meeting with your real estate professional. It is the key to a successful and productive working relationship.

Selling a home involves making major decisions about where and how you will live for many years, and often has very important implications for your financial future.

For these reasons, many sellers enlist the services of real estate professionals to help them with complex real estate transactions. In fact, nearly 91 percent of all home sales are made with the assistance of a real estate professional or real estate broker.

Thus, consumers need to know how to choose a qualified real estate professional/broker, what services the real estate professional/broker should provide, and what recourse is available if a real estate professional/broker fails to perform.

If you are selling, the right real estate professional/broker can help you realize the best possible price and conditions for the sale of your home, and also can help you find the best deal on your purchase of a new home.

Choosing a real estate professional is one of the most important decisions you will make whether buying or selling a home. A good real estate professional can save home buyers and home sellers thousands of dollars, can protect their best interests and can have a significant impact on whether the home sale closes in a timely and orderly manner. With so many real estate professionals, how do you pick a good one?

As in all professions there are competent and incompetent practitioners. Nowhere is this more true than with real estate professionals. The average real estate professional sells less than 3 homes per year, works on a part time basis, and relies on referral business from family and friends. Everyone knows someone who is a real estate agent. Uncle John, father-in-law Lee, cousin Susan, your mother's best friend Eunice, the list goes on. Be very wary of those types of referrals. The social pressure to conduct business with them can be intense, but in many cases those real estate agents are the incompetent real estate agents you do not want to work with. A home sale or purchase is a huge financial investment and a long term commitment. In the wrong hands the wrong real estate agent can costs you thousands of dollars or worse, and you may never know it until it is too late. 

Real estate services are not inexpensive. Home sellers may pay a five to seven percent commission to the real estate broker, who in turn compensates the real estate professional on the sale of the home. The vast majority of the time the real estate professional who sells the home is not the listing real estate professional, therefore the commission is also split with the buyer's broker and listing broker.

A good real estate professional/broker can help you determine how much your home is worth, devise a strategy to price and market the property, negotiate a purchase offer, help judge whether prospective buyers are financially qualified to purchase your home, and coordinate many of the financial and transaction details involved in closing the deal.

While there are a number of things to look for in a real estate professional, ultimately, the decision is a personal one. Be sure that you find a licensed real estate professional and a reputable real estate broker who can provide the range of services that are important to you, and with whom you feel comfortable.

Any real estate agent can stick a for sale sign in your yard, put your home information in the multiple listing service and prepare brochures. Most home sellers thinks that the real estate professional's primary value is their ability to market their home. The fact is that in today's active housing market any home that is priced right, is in good condition, and has a favorable location will sell without a lot of marketing effort on behalf of the real estate professional. Even incompetent real estate agents are successfully selling houses in today's market. So why do you need a real estate professional you ask? Because a truly competent real estate professional's value occurs not only during the marketing process, but also from the time of an offer until your home sale closes. After an offer is presented is where the "truly competent" real estate professional excels, earns their real estate commission, and can potentially save or make the home seller thousands of dollars. 

Restrict your search to residential real estate professionals and companies that work in your area. The most effective real estate professional is one who knows about the neighborhood and can answer questions, important to potential buyers of your home, about schools, places of worship, medical facilities and other services available in the community.

Remember there is more to a real estate professional's job than marketing your home. A real estate professional's true value often occurs after the marketing when a purchase offer is presented. Be sure you question the real estate professional about their negotiating skills and training. Do they employ a negotiating strategy? Can they articulate their strategy to you? Is their negotiating strategy connected to their pricing strategy? Do they have a pricing strategy? Do they have an overall strategy to marketing and negotiating the sale of your home?

Remember to "interview" the real estate company, as well. While you probably will be working directly with a single real estate professional, remember the real estate professional brings with him, or her, the resources or limitations, of the real estate company (broker), for which he, or she, works. This means it is important for you to ask each real estate professional about the real estate company with which he, or she, is affiliated.

You will, also, want to know about the marketing tools the company makes available to the real estate professional, such as television programs or specialized advertising campaigns. Also, make sure that someone will be available at all reasonable hours to show your home to home prospective buyers.

Be sure to ask if the prospective company participates in a Multiple Listing Service (MLS). MLS is a computerized central registry of properties on the market and virtually every area of the country has such a service. It makes information about your property available to other real estate professionals, and allows other real estate professionals to bring in prospective clients.

What a Real Estate Professional Does For The Seller
Markets Your Property: Your real estate professional will market your home in a combination of ways. Ask about the  real estate professional's marketing plan. Be sure to ask the real estate professional about their Internet market plan. Many of today's home buyers preview homes on the Internet to help them narrow their home selection process.

Your real estate professional will also look at your property objectively and help you to emphasize pluses and play down minuses, telling you what problems need to be corrected. He, or she, will show your home to prospective buyers and can pre-qualify prospects to determine whether they are able to afford your home.

Be honest with your real estate professional about the condition of your home, and about what you will accept for a final price on your home. Remember that your real estate professional represents you, the seller, and not the buyer of the house, and is obligated to keep confidential any information that would not deceive the buyer.

The real estate professional's job is to get you the best possible price for your property in the shortest possible time. A cooperating real estate professional working with the potential buyer of your home has the same responsibility to you, the seller.

Evaluates Offers, Negotiates With Buyers: When there is an offer on your property, the real estate professional immediately sets up an appointment to present a written offer and answer your questions. Your real estate professional will explain any contingencies on the offer contract, and tell you how these conditions might affect you and what is in your best interest.

He, or she, will offer advice on strategy and counter offers, and communicate your counter offer to the buyer. Once an offer has been signed by both the buyer and the seller, it is considered ratified and binding.

Monitors Progress Leading To Closing: You will usually have to wait a few weeks to close the deal, while the buyer secures mortgage financing. Your real estate professional will continue to monitor the loan application process for the buyer and coordinate appointments with home inspectors and appraisers, too.

Your real estate professional, also, will be present with you at closing along with the settlement attorney, when you sign the papers for the sales transaction.

Source: Parts of this article are from "Tips On Selecting a Real Estate Professional or Broker," Better Business Bureau, Consumer Information Service.