Know Before you Go: 5 Questions First Time Homebuyers should ask before signing with a Real Estate Agent
When it comes to selling their home, people generally have some flexibility in who they work with. They can meet with several Real Estate Agents and choose the one that they feel would best represent them and get their home sold (even though the majority still work with the first one they meet). While they may not be able to perfectly determine all the bumps in the road that can come with selling a home, sellers typically have quite a bit of control in the beginning and can choose who they ultimately work with.
For buyers, especially first-time homebuyers, the excitement of making the leap into homeownership usually leads to skipping some crucial steps, including the process of making sure you are working with a Real Estate Agent that is going to make your experience a pleasant one and get you a great deal. Rather than meeting with an agent at your home and allowing them to give you a formal presentation on their services, most buyers will meet their agent in person for the first time outside of the first home they want to look at. Typically, agents will then ask you to commit to them via a Buyer Broker Agreement, which allows them to represent you when the time comes to put an offer in on a home.
Before you jump in with both feet and sign, here are some questions that you should ask your agent. Keep in mind, there are other questions that you should ask about the homes you look at (we’ll cover that in another article), but the purpose of this piece is to help you do your due diligence on the agent you choose to represent you. Remember, this is likely the biggest purchase that you have made in your life to this point. Your agent should be respectful of this request and take the time to answer anything you ask them.
- Are you a part-time Agent or do you work full-time?
This is a question that may not seem like a big deal. After all, you may be going to look at homes on nights and weekends anyway, so why does it matter? Because agents who work part-time only have so many hours in the day that they can spend on searching for homes for you, setting appointments, and negotiating contracts on your behalf. If you have an agent that spends the majority of their day at another job where they may or may not be available, you risk working with someone who has less of an understanding of the market and may not have the same skillset as an agent that works full-time.
Does you agent need to be full-time? Absolutely not. There are plenty of part-time agents that do well, but they are more rare. Coincidentally, there are plenty of full-time Real Estate Agents that do not work for their clients either, so this should not be the only deciding factor.
2. What strategy do you implement to help me get my offer accepted?
In a real estate market as competitive as we have right now, your agent needs to have a strategy that they will follow to give your offer the best chance of being accepted. This goes beyond price. I repeat, this goes beyond price. What does your agent do before the offer even gets put in? Are they going to talk to the listing agent about what is important to the sellers? Are they going to look at comparable home sales and recommend a price or just wing it? A great strategy does not guarantee that your first offer will be accepted, but it gives you a much better chance of getting into the perfect home much quicker.
3. What do you charge?
Most agents will say “Oh, you don’t have to pay anything! My commission is paid by the sellers.” and while that is typically true, you should ask them to show you the section in the Buyer Broker Agreement that discusses brokerage fees. Depending on what is written in the agreement, you may have to pay some of your agent’s commission if the home you want does not offer a Buyer’s Agent Commission (BAC) that matches the number in the contract. Discuss this with your agent and make sure that you are aware of any other office or administrative fees that their brokerage charges. Are these deal-breakers? Absolutely not, but you should be aware of them and make sure you know what to expect.
4. What else do I have to worry about paying for in the process?
Your agent should be able to talk to you about Earnest Money (what it is and how much you can expect to pay), estimated cost of an inspection, cost of an appraisal, and any other charges that may come up between offer and closing time. You should also ask your mortgage lender about what you will need to pay for before closing so you can avoid last-minute surprises.
5. Can you walk me through the contract before I sign it?
While an agent does not necessarily need to read through their agreement with you word by word, it is important that they can walk you through each section of the agreement so you can get an idea of what you are committing to. When you sign a Buyer Broker Agreement, you are entering into a legally binding contract, so make sure your agent can explain it to you before signing it. Not all agreements are created equal, so make sure to ask each agent you meet with to walk you through their agreement.
Asking an agent these questions should take you less than 10 minutes. If the agent you met with needs to leave for another appointment, set up a time to talk to them over the phone or meet with them in person to talk through these questions and resolve any doubts you have. These questions cannot fully guarantee that you will work with the perfect agent and they cannot guarantee that everything will go perfectly smooth as you go through the process of buying a home, but it gives you much better odds of working with an agent that is aware of the current market conditions and knows what needs to be done to get you into the perfect home.
For more information, contact Dan Mortimer at 801–793–8488 or firstname.lastname@example.org