Most homebuyers will start their search for houses or land on the Internet. And when they see something of interest they’ll either print out the listing information or write down the address. Next, they’ll drive by the property. If they like what they see they will call the number on the real estate sign to ask questions or make an appointment to see the property.
So far no real mistake; right? Wrong! The single biggest mistake you can make when buying real estate is to call the listing agent.
Imagine for a minute that you have a house to sell. Who will you call to help you with the sale? What most Sellers do is contact a Realtor they trust. This could be a friend, relative or someone from their place of worship. In most cases, the Realtor has a relationship with the SELLER not the Buyer. In addition, when a Realtor lists a property for sale, the Realtor has a fiduciary duty to obtain the best price and terms for the SELLER not the Buyer!
Definition of “fiduciary”: A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves “at a level higher than that trodden by the crowd” and that “the distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty.” That is, loyalty to the Seller!
As you can see, you don’t stand much of a chance in obtaining the best price and terms for yourself if you choose to be represented by the Seller’s agent. It’s not likely the listing agent is going to help you get a “great deal” at the Seller’s expense!
I used to make the mistake of calling the listing agent on a regular basis when I was a young investor. And…it cost me plenty! You see, I thought the listing agent was the best person to call as I knew they would be paid a double commission. Thus, they would be more motivated to help me get a great deal. Wrong!
It’s even worse when the listing agent is related to the Seller. There’s an old saying about blood being thicker than water. Well, I’m here to tell you it’s true. You see, I didn’t stand a chance against a professional Realtor working for the Seller/relative/friend. Let’s just say I never got a “smoking deal” when I was represented by the Seller’s agent.
Here’s a fact anyone shopping for real estate should know: WARNING, When a real estate agent shows you a property (and you end up buying that property) the agent that showed you the property may become your agent even if that is not your intent. In the real estate industry this is called “procuring cause”. The definition of procuring cause is: The agent who ultimately caused the Buyer to purchase the home or land is the procuring cause agent.
This is where you have to be careful as a Buyer as you could end up in a procuring cause dispute between the real estate agent that showed you the property and the agent you wish to represent you.
As you may know, in most cases the Seller pays the agent(s) fees. As a Buyer, you are free to choose the best agent in the world to represent you and it won’t cost you a penny; providing the agent you choose is the procuring cause of the property you buy. In other words, make sure the agent you choose to work with is the agent that actually shows you any and all properties you may consider buying.
Always say you are working with another agent. (preserve your rights)
When dealing with other agents always let them know you are working with a Buyer’s Broker. Agents are supposed to ask you this question but sometimes they don’t: they forget, are afraid to hear the answer or become distracted. Set them straight immediately.
Do not ask another agent to show you property.
Your agent is eager to help you. Part of your agent’s duties is to show you homes for sale, even if you located the properties yourself. Let your agent earn his/her commission and this way you can compare notes regarding all of the properties you have looked at.
Do not directly call listing agents for information.
Your agent will probably get more detailed information from the listing agent than you will get. And never forget, real estate agents can be shrewd in their business dealings and anything you say could be used against you when it comes down to negotiating the lowest possible price for you the Buyer. If you accidently let a piece of information slip such as how much you could afford; this information would definitely hurt you later when your Buyer’s agent says “this is my client’s best offer, they can’t go any higher”.
Follow Open House protocol if you go unescorted.
If you attend Open Houses without your agent, hand your agent’s business card to the agent hosting the Open House. Sign guest books with your agent’s name next to your own. Not only will this help protect you, the open house agent won’t try to corral you or request your personal information.
Get a Buyer’s Broker Working for You.
You’ll enjoy the same benefits a Seller has with their broker. A Buyer’s broker has a fiduciary duty to you the Buyer. The Buyer’s Broker will assist you in obtaining the best possible price and terms, will be skilled in presenting offers, will guide you through the inspections, disclosures and may negotiate Seller concessions after your review of the inspection reports.
A Buyer’s Broker will have many properties for you to choose from. Properties listed by all of the agents in the Multiple Listing Service (MLS). A good Buyer’s Broker will deliver a team of experts including home inspectors, contractors, accountants and consulting attorneys. Expert Buyer Brokers have assistants and can be reached in a moment’s notice by telephone 7 days a week.
As you may have guessed, I am a Buyer’s Broker myself and I must caution you; not all real estate agents are equal! When looking for an agent, why not have a Broker represent you? Agents work under the supervision of Real Estate Brokers. By California law, Real Estate Brokers are required to have more education and experience than real estate agents.
When making one of the largest purchases in your lifetime, it makes sense to get the best possible representation working for you not the Seller. With over 30 years of professional business and negotiating experience, I’m anxious to show you the tools and techniques that consistently produce the best properties at the lowest possible cost for people just like you.
And here’s the best part…my services are paid for by the Seller. You have nothing to lose and everything to gain!
All successful businesses have a plan. And, buying real estate is no different. You must have a plan and sophisticated negotiating strategies in place before looking at a single property. There’s not a doubt in my mind that I’ll save you thousands of dollars in your next real estate transaction and I’m ready to prove it!
It would be an honor to assist you and I look forward to explaining our systematic approach to finding and acquiring the best property of a lifetime. You’re welcome to call me any time.
Parsons Realty
1171 Hilltop Dr
Redding CA 96003
530-222-1818
1-800-PARSONS (727-7667)
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