If you are a first time home buyer or haven’t bought a house in quite a few years you might have questions regarding how Realtor’s get paid & if there is any obligation to work with a specific agent. In this blog article I am going to go over what you need to know about real estate “agency agreements” & what most Realtors won’t tell you.
Types of Agency Agreements
When you are looking to purchase a house in the Appleton WI area it is typically most common to go through a Realtor to help with that purchase. However, it is also possible to buy a for sale by owner where there would be no Realtors involved. For the sake of keeping this article short I won’t talk much about the for sale by owner route & mainly focus on the Realtor route.
- Buyer Agency Agreement: In a buyer agency agreement the Realtor is solely working for you the buyer. They have to try & get you the best possible deal with the best terms. Through signing a buyer agency agreement there is a commitment from the Realtor & also from the buyer. They agree to work exclusively with each other regardless of what happens during the transaction.
- Seller Sub Agency: In all other scenarios where you HAVE NOT yet signed a Buyer Agency Agreement, the Realtor you’re working with is a sub agent of the seller. So what does this mean? Technically speaking, they can’t give you advise in regards to how the property is priced, or anything that is not advantageous for the seller as well. However, with this type of agency you are not committed to working with any particular agent.
What is most common?
To be 100% honest with you… In about 75-85% of the transactions that I help buyers on, I am not a buyers agent until they are ready to write an offer. And in some cases, the buyer does not want to sign a buyer agency agreement which I am 100% okay with! Whatever makes them feel more comfortable is how I go about doing business.
Why do I do this?
The main reason that I don’t sign a buyer agency agreement right away is because we barely know each other. I have the belief that if we have opposite personalities & don’t get along, we should not do business together. There are so many real estate agents who might be a better match & that is who you should find.
Also, from a legal stand point if a buyer was to go & purchase a for sale by owner on their own or use another Realtor, they would be obligated to pay my 2.4% real estate commission even if I didn’t work on the transaction.
My Recommendation to You
Once you find the right Realtor for you I would recommend sticking with them throughout the buying process. Unless they are unresponsive or incompetent, you should be in good hands. The toughest part about being a Realtor is getting loyal clients to do business with you.
Just think about this… What if you showed an individual 20 different houses & then they went Ghost on you. You don’t hear from them for 2 months until you receive a message back that states “We bought a home already”. Realtor’s are paid solely on commission & not only did you waste hours & hours of their time, but now they worked for free with someone who was never going to use them in the first place.
My advise… be honest with the agent if you are planning on using someone else or if things aren’t working out!
If you need assistance in buying your first home please fill out the form below or call/text me 920-252-2864