House-Hunting? Make Sure You Know Who is (or Isn't) Working for You!

It still is amazing to me the number of buyers out there, smart, savvy, Internet-crazy buyers, who have no idea how the real estate industry works when it comes to buying property.

Given that it's the largest purchase for most buyers and certainly a stressful transaction for almost all buyers, especially first-timers, it's a shame that many buyers leave exploring HOW to conduct their transaction in the hands of a listing agent.

What is a Listing Agent? That's the person whose name is on the sign when you drive by a house and fall in love... the person who is often hosting an Open House, and the person whose name is attached to the info you see on line to contact for more information.

That person is legally, contractually obligated to work for one party only, and it's not you. The listing agent works solely for the seller. They are tasked to get the highest and best price, and the best terms and conditions for that seller, no matter what. When you call, stop by, arrange a showing or have a conversation with a listing agent about a home, they are trying to sell you a house. That one, preferably.

When you meet a listing agent at an Open House, respond to an on line or in the paper via phone or email, the listing agent has no obligation of confidentiality for any of your personal, confidential or private details. If you casually mention that you, 'just won the lottery and can pay full price,' the listing agent is obligated to pass that detail on to the seller. And I don't know a seller who would take anything less than full price after that kind of disclosure! The same thing goes with less dramatic revelations like moving for a new job and being under a time crunch, expecting a new addition to the family, going through a nasty divorce, being in love with the neighborhood or schools, etc. Each detail you give a listing agent can provide a subtle nudge toward the seller side of negotiations because the listing agent won't reveal anything to you about the seller that is not favorable. That's a pretty lopsided negotiation.

We know that most buyers start looking on line and going to open houses way before they get serious, get pre-approval from a lender, etc. When you're tire-kicking, whether on line, at open houses, or making phone calls, keep these tips in mind:

1) KEEP QUIET: When you reveal details, anything at all...a savvy listing agent will gain insight into your situation, your abilities, timing, etc. Your best protection is to say as little as possible. That doesn't mean being rude or lying, but simply keeping your answers short and to the point. You have no obligation to reveal your timing, financial situation and certainly not that you've found your DREAM HOUSE!

2) KNOW YOUR STATE LAWS: In some states, a listing agent CANNOT represent both the buyer and seller...it's too fraught with confusion, assumptions and misunderstandings...so much so, that in some states it's not legal for one agent to represent both sides. BUT! In other states, one agent CAN represent both sides, typically with in-writing permission from BOTH sides. The term for this kind of action is called DUAL REPRESENTATION, and means that one agent represents no one...the price paid to the agent by the sellers is usually the same, but they don't have to provide any direction, guidance, suggestions or advice, and in fact, may only provide ministerial-type duties: showing each side where to sign, making sure the documentation is correctly completed, etc.

3) YOUR RIGHT TO SHOP: You can look for as long as you want, whenever and wherever you want...don't allow yourself to be bugged or intimidated by aggressive agents. Good agents will capture your details and follow-up with you, but that's not a license to cajole or harass. When you attend an open house, for example, most agents will want you to sign in...please do. It shows the seller they were doing their job, and is respectful to the agent, and when you're ready to sell, you may want the same courtesy. But if you find you're being bothered afterwards, simply tell the agent you're not interested and move on.

4) KEEP YOUR EYES OPEN FOR A GOOD AGENT: Chances are, you'll meet a lot of agents once you start looking...at open houses, calling on ads and signs, letting your friends and colleagues know...agents will pop up everywhere, many vying to help you look. Not all listing agents WANT to work with buyers. In fact, many prefer to only work with sellers, not buyers. Some agents will take buyers, only if they meet them through one of their listings, and even fewer agents actively seek out buyers as a separate part of their business activities. Those agents, who hold themselves out as, "buyer agent," understand the unique amount of time required to work with most buyers, especially first-timers. It's a big job.

5) START LOOKING FOR A BUYER AGENT: Your best bet is to hire your own buyers agent. Use the same skills and process you would for any professional... ask friends for recommendations, conduct interviews after looking at profiles on line, etc. Many good buyer agents are blogging and have websites and social media profiles aimed at helping buyers navigate the process so they can have a rewarding, educational experience. Some buyer agents go the extra step and get an ABR DESIGNATION (Accredited Buyer Representative). This is one of the few designations in real estate that requires demonstrated knowledge (via actual closings with buyers) of materials in addition to written instruction, versus simply passing an on line test.

Buyers agents work for you, not the seller. They must disclose what they know about a property and an area, and the seller's position and details, when they are known. If a water-cooler gossip session reveals that a seller is going through a nasty divorce and will sell well below the asking price, and your buyer agent overhears this, they must reveal this to you...but the listing agent must NOT reveal this to you... you get the picture. Good, experienced, passionate buyer agents are worth seeking out.

So whether you're just starting out, are a first-timer or buyer with lots of transactions under your belt over the years, make sure you understand who you're talking to, what their obligations are or aren't, and know the laws in your state when it comes to representation in a real estate transaction.