In my last post I gave some tips on how to begin your home buying adventure so you can stay in NH. Basically, get educated, get pre-approved for a mortgage, and start making a list of your needs and wants that you would like to have in your home.
The next step would be to find a real estate agent to help you. Here are a few suggestions on finding the right agent for you and a starting look at options on how to work with him or her. First, and most importantly, you want an agent that is local and knows the market. If you don’t already know an agent, you can talk to your parents or friends and see who they have had success with. You can also go on-line and read agent bio’s and reviews.
By all means, select and interview at least three agents and see who you feel the most comfortable with. You should ask lots of questions about how they work with their buyers. Make sure they will be available when you need them. Ask them about how they see the current market and how they will communicate with you. Are they up on the latest technology? Do they text or do they still have an old fax machine that uses rolls of paper? Do they have a website? Are they full time in the business or do they have another job? Take notes and compare. No two agents are alike, nor do they work alike. It is about finding a good match with your personality and making sure the agent will be diligent for you. It is all about what works for you!
The first thing any real estate agent should do for you is to provide and explain the NH Real Estate Commission’s “Brokerage Relationship Disclosure Form.” Agents are required by the Commission to explain this form at the first meeting you have, so if they don’t, you know the agent is already skipping steps (he could go to real estate jail…if there were such a thing!) This form is not a contract, but it is required, important, and it explains how real estate agents work with the real estate consumer; both buyers and sellers.
“The Customer Status”
In a nutshell, there are two ways agents can help you find a home. The first way is if you are a “customer” and the agent is what is called a “facilitator.” When you are a customer your facilitator does not actual work “for” you. He assists you. He can show you property, write up and present offers for you, and he must disclose all material defects actually known to him about the on-site physical condition of a property that you are looking at. As a customer, he must treat you fairly and honestly, exercise reasonable care and skill on your behalf, account for any monies received from you during the transaction, and must obey all state and federal laws pertaining to real estate brokerage activities (he doesn’t have to obey the speed limit if he is late for a showing, but he still could get a ticket!)
A facilitator does not owe you the fiduciary responsibilities that you would get if you were a “client” and he, or she, is a “buyer’s agent” for you. A buyer’s agent owes his clients the duties of; confidentiality, loyalty, disclosure, lawful obedience, and promotion of your best interest. In order for you to receive these additional services provided by a buyer’s agent you must enter into a formal Buyer Agency Agreement.
Most of the time, buyers will start out as a customer of an agent. It can be uncomfortable for both the agent and the buyer to enter into a formal Buyer Agency Agreement for services on day one, unless perhaps there is some history between the two parties. That can feel a bit scary. I never would want to enter into a contract right away with a buyer. It never feels even remotely right; I don’t know the buyer (he could be crazy), the buyer doesn’t know me (I pretend I am not crazy), and we both don’t know if we will hit it off (I hate the Patriots, love dogs and motorcycles). But sometimes, opposites attract!
The main thing you have to remember that as a customer, your facilitator doesn’t actually work for you…he is only helping you. And, because he does not owe you the fiduciary responsibility of “confidentiality” you should never tell that agent anything of a personal nature that could affect a real estate transaction.
You see, the agent that you are working with as a facilitator could have a lot of houses listed for sale. It could be that one of those houses is something that you like and desperately want to see. It is everything you have been looking for! That’s perfectly ok, but when you go to look at this house, you need to understand that your facilitator owes his fiduciary duties to the seller. He has been hired by the owner to sell his house.
So, if you were to say something like “I absolutely just love this house and want to live here forever! I’ll do anything to get it!” the agent is legally bound to tell the seller what you said. That comment kind of ruined any negotiation ability you might have had! You just became a large mouth bass with a hook in your mouth! It is not that your facilitator is doing anything wrong by telling that to his seller, he is following the rules… except, of course, if he didn’t explain all of this to you to start with!
I have sold many houses to buyers as a facilitator. These buyers may be more experienced and don’t need or want any advice when purchasing a home. Some buyers may not want to enter into a Buyer Agency Agreement with anyone because they like to play the field, so to speak, flitting from one agent to another. As a “customer” you are not tied to the agent that is working with you, but I would recommend that you do not work with multiple agents at the same time. That can get very confusing for you and for the agents that are trying to help you. It won’t take long for everyone to figure out that you are using multiple agents and you might end up with no one helping you.
So, pick an agent. Look at some houses. See if you hit it off! If it doesn’t seem to be working out for you, end the relationship with that agent, and find another one to work with. If you do like the agent and he is providing you with great service then it may be time to enter into a Buyer Agency Agreement with him.
We’ll explore the Buyer Agency side of real estate in my next article.
Roy Sanborn is sales associate with Four Seasons Sotheby’s International Realty and has been a REALTOR® since 2000. He writes a weekly article about the local real estate market that is published in the Laconia Daily Sun and at DistinctiveHomesNH.com. Roy and his partner, Ashley Davis, formed the Distinctive Homes Group to bring an even higher level of service to their clients at Sotheby’s. Their goal is to provide their clients with the best, most professional, real estate experience in their lifetime. They also believe it helps to have a little fun along the way.