Questions You Should Ask Your Real Estate Agent Before Signing A Listing Agreement
A Buyers Agency Agreement is an employment contract. It discloses commissions and fees (if any) your agent will request as compensation for their services. But most importantly, a Buyers Agency Agreement clarifies your relationship with your agent if legal issues arise during a transaction. Missouri law states that if a buyer does not have representation, then all agents involved in a transaction are agents of the seller. But, if you have a Buyers Agency Agreement, the law states that your agent has a duty to exercise care and loyalty upon YOUR behalf to promote YOUR interests. It is for both you and your agent’s protection. Here are some key questions to ask your real estate agent before signing an agency agreement.
1. Are you a Realtor®? Members of the National Association of Realtors®, a trade organization of more than one million members, subscribe to a stringent code of ethics and are required to take continuing education courses. This helps to guarantee the highest level of service and integrity.
2. Are you a member of the local MLS? It is a must that your agent be a member of this database of listings in your area. It is the primary manner in which your home will be marketed to other agents and to the public.
3. How will you market my home? Look for someone who uses innovative approaches (flyers, photos, websites, direct marketing, virtual tour) to reach buyers; not just someone who will put a sign in your yard.
4. Do you work as a dual agent, assisting both the seller and buyer? Though it’s perfectly legal to assist both parties in a transaction, it’s important to understand where the agent’s obligations lie. A good agent will explain the agency relationship to you and describe his/her role in a transaction.
5. How many clients are you currently working with? Look for a low client to agent ratio. An agent who has too many listings or buyers is overwhelmed and certainly can’t give you the attention you need. There is no set ratio what this should be, but a good indicator as to whether or not your agent is overloaded, can be measured by how long it takes for them to return phone calls and their availability to assist you when needed.
6. When are you available for showings? When and where can I reach you if I have a question? Your home can be shown by your agent or a buyer’s agent. All showings should be registered with your agent and confirmed with you if applicable. Your agent should make themselves available for showings and to you seven days a week, unless other arrangements have been made in cases where your agent will be unavailable. This is where question #5 is reiterated. If your agent is too often unavailable, perhaps they’ve spread themselves too thin.
7. What is your business philosophy? While there is no right answer to this question, your agent’s response will help you assess his/her work ethics to determine if their goals and business practices are a good match with your own. Their response to question #4 concerning dual agency will help give you an idea of how they work. You can even ask what changes they would like to see take place in the real estate industry. Look for responses geared toward educating and protecting consumers. Also, ask what they like most about real estate and why they’re in the business.
8. How will you keep me informed about the progress of my home sale? Your agent should keep you updated on the number of showings, market conditions, plus feedback from potential buyers either directly by phone or email.
9. What will your brokerage charge me to list with you? Your agent should disclose up front all commission fees and additional charges. Charges and commissions range from agency to agency, so make sure you understand what it will cost you to list your home with that agent.
10. What type of guarantee do you provide? Sometimes, even the best homes don't sell. Your agent should do everything possible to advertise and market your home to generate an ample amount of showings. Ask your agent how you may be released from your listing agreement if you feel your agent isn't doing an adequate job.
Once you've interviewed several agents, decide which one you feel you will work with the best. A good agent will work very hard to find a buyer for your home and invest many hours in the process. A Buyers Agency Agreement is usually for a 3-month period. During that time your agent should keep in constant communication with you regarding feedback and competitive homes in your neighborhood.
A Buyers Agency Agreement is a contract; therefore, a legal instrument. If you do not understand it, you should consult an attorney.
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