Posts Tagged ‘home buyer’

real-estate-dual-agency-buyers-and-sellers“So what will it cost us to secure your services?”  One of the top questions that I receive.  The answer may vary depending on the services you request.  For the purposes of this 3 part series, I will let you in on Renter’s Agent, Buyer’s Agent, and Seller’s Agent pay.  According to the 2013 National Association of Realtors Member Profile, “In 2012, the typical agent had 12 residential transaction sides – up from the previous year when the typical agent had 10 transaction sides.”  Traditionally, the real estate industry is completely commission based.  Most of the time, a Realtor works under the supervision of a broker unless they are a broker themselves.  In that case the broker may have their own company or work with a large, well known company like Keller Williams for example.  There is also the option for a Realtor to work on a team within a larger company.  All of these folks require payment.  So realistically, on one real estate transaction, there is the potential for the commission to be split 6 different ways before it is all said and done.  Let’s take a look at the Buyer’s Agent…

The Buyer’s Agent.  This agent does not cost the buyer a dime in this area.  As I talk about in 6 Reasons NOT to Call the Realtor on the Sign, my services to you as a Buyer Representative are practically free.  The commission percentage is agreed upon between the seller and the selling agent.  Generally, the selling agent will agree to split that commission with the buying agent, so you my friend, are off the hook!  All of my expert assistance, with no money down!

There will be a Buyer Representation Agreement.  A Buyer Representation Agreement details my duties to you as your agent, yours to me as a buyer, and that we mutually agree to work with each other.  I agree to work as your representative, and you agree to be represented by me.  It also specifies things like the length of time that the contract is good for, what type of home you are searching for, and the sources used for the search.  According to the Tennessee Association of Realtors® (TAR) Consumer Guide to Agency Law in Tennessee, “Once you have signed a Buyer Representation Agreement, this contract obligates your agent to be your loyal advocate and to promote your best interests above all others in the negotiation and closing of a successful purchase.”

This part is important to us Realtors, and I think you will be able to see why.  I’ve only had it happen once, but it still stings.  A potential buyer contacted me months before their anticipated arrival.  There were some specifics that they required in a home.  I searched, and searched, sifting through listing after listing (hundreds!) to find the right ones to show them.  Hours of my time before they ever arrived.  I answered their questions, blocked my time for them in preparation for their arrival, and was completely dedicated to easing their transition.  To make a long story short, they didn’t want to sign my Buyer Representation Agreement when they arrived, even though I agreed to write in the special stipulations that I would let them out of it if they so desired.  For three days, I searched for homes, arranged showings, and took them to see houses.  We drove from one end of Clarksville to another, and I held other clients off out of loyalty to the time I had blocked for them.  On the fourth day, after arranging another evening of house hunting, they stood me up.  Property transactions are noted in our Multiple Listing Service (MLS), and are ultimately public information.  It wasn’t long before I discovered that they had bought the very first home that I showed them.  Hours, and hours of my time wasted.

But moving forward, how is a Buyer’s Agent paid?  We find the home you love, and go under contract.  On the MLS sheet, the compensation amount is listed.  This is a percentage that is split between the Seller’s Agent and the Buyer’s Agent.  Then, as I spoke of above, this is split with the agent’s broker, and may even be split with the agent’s team if they are on one.

Here is an example:

The price of the home is $100,000.  The commission is 6%; 3% to the Seller’s Agent, and 3% to the Buyer’s Agent.  The brokerage split is 70/30.  The royalties to the company are 5%.  And then the split to the team is 40%.  The paychecks may look like this;  $900 to the brokerage, $150 to the company, and $780 to the team.  That potentially leaves $1170 to the Buyer’s Agent before taxes.

Buyer’s Agent Expenses. So dang, those agents make a lot of money, right?  Hold your horses!  On top of our split, we have all of these additional expenses and then some:

  • Various taxes
  • Office fees
  • Office supplies
  • Realtracs subscriber fees
  • Advertising (signs, websites, business cards, etc)
  • Clarksville Assocation of Realtors dues
  • Tennessee Association of Realtors dues
  • National Association of Realtors dues
  • Dues for other professional organizations we may belong to
  • Closing gifts to our buyers
  • Electronics (computers, cameras, etc)
  • Phone bills
  • Vehicle maintenance
  • And the worst of all… GAS (sometimes multiple times per week)!

Bonuses.  I will let you in on one last little secret.  Everything in real estate is negotiable.  Sometimes if a particular listing has been on the market for a long time, or if the seller is motivated to get the home sold quickly, they may include a bonus to the Buyer’s Agent.  These bonuses can range from hundreds of dollars to thousands (even tens of thousands) of dollars, and it is not something that you as the buyer are usually aware of.  Though any payment amounts are noted on the final HUD that you will receive before closing.  The seller and listing agent can also agree to pay a higher commission percentage as an incentive to the agent.  Keeping that in mind, if you have an agent who is passionate about the families they help, and not particularly money driven, they may opt to forgo the additional bonus or lower their commission amount to get you the deal that you want.  Not tooting my own horn, but I have done this for my clients.  I have let a few bonuses go to get my buyers the most and there are a few other like-minded agents out there.  Disclosure is the best practice in my opinion, and I do not try to keep those sorts of things concealed.  After all, realtors can offer their opinions, but we cannot make you buy a particular home.

Be sure to read Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent and Realtor Pay Exposed: The Seller’s Agent (Part 3 of 3)

Does that break it down for you?  Questions?  Concerns?

If you have questions or need real estate assistance in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who does, call me today at (931) 436-6765 or submit your information below.

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2014.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

In 1943, Abraham Maslow developed a psychological theory of basic human needs.  The foundation of the pyramid includes physiological requirements which among others include breathing, food, water, sleep and shelter.  The pyramid theorizes that the next level of human needs include bodily safety, health, and the security of property.  Having a place to call home is one of the most important motivators of human behavior and it is equally important to find the right person to guide you through the process.  Read on for tips to find the Realtor that is right for you!

Maslow

Word of mouth (or keyboard) is the best advertisement!  Ask your friends and family first.  Sometimes that is more difficult if you are being relocated to an area that is new and unfamiliar.  As a fellow military family, we have been in that situation more than a few times.  That is when social media can be your best friend.  Utilize Facebook and different public forums.  At Fort Campbell alone there are several different active Facebook pages to include PCSing ~ Relocating to Fort Campbell, KY ~ Clarksville, TN and Fort Campbell Wives Page.  Ask around!  Then once you get names of a couple of Realtors, ask if they have a couple of clients that wouldn’t mind speaking with you about their buying experience.  According to The 2012 National Association of Realtors® Profile of Home Buyers and Sellers, “buyers most commonly choose an agent based on a referral, with trustworthiness and reputation being the most important factors.”

Visibility in the marketplace matters!  While you are getting recommendations and speaking to clients, check the Realtor’s visibility.  One of the fastest ways to do that is to run a Google search.  For example, search “Ariel Anderson” and see what comes up.  Try “Ariel Anderson Realtor” or “Ariel Anderson real estate”.  If you don’t get any results, that is no bueno and a good sign that the Realtor is not well-established in the community.  On the opposite end of the spectrum, if the Realtor is all over every billboard, shopping cart, and magazine that you see, chances are that you will be working with more than one person, or likely even a team.  Typically when working with a larger organization or team, you may have several different hands on documents, there may be longer waits for return phone calls, and that “home town” feeling might be missing.  Be cautious if someone entices you to use their services and then sends you on to another person, who may send you on to another.  You need to know who is on your side, and that you will not be lost in the shuffle.

What exactly do you do for a living?  Another good way to tell if a Realtor is right for you is to find out if they practice real estate full-time in this area.  According to the latest update, the Clarksville Association of Realtors has 703 active Realtors registered.  Not all of them practice full-time, and some of them may not even be in the area.  You want to make sure that whoever you are working with takes your quest for a home as seriously as you do.  They need to be directly involved in local real estate, knowledgeable of the area, and familiar with homes currently on the market.  If the Realtor is spread to thin and constantly distracted by other duties, you may not get the time and diligence needed.

You may also want to be sure that you aren’t being used as a referral.  There are some Realtors who make a living off of collecting referral fees.  They may tell you they are familiar with the area and have a lot of contacts that may be able to assist you.  They will get your personal information (name, phone number, email, etc), send it to a Realtor or team who is actually based locally, and then behind the scenes they collect a percentage of the commission that the Realtor they referred you to makes when you close on a home even when they did not personally do any work on the deal.  Make sure that the Realtor represents themselves honestly from the start, that the individual you speak to is here, and that they are willing to meet with you personally versus passing you off to someone else while collecting a fee.

Communication is key.  As I speak of in Tell me how this “buying a home” thing works?  A Guide

Make sure you feel like you can communicate with easily and that you are working with someone who will answer your phone calls, or return them at least.  Can you ask questions without being rushed?  Do they answer your questions or give you vague replies?  You want to make sure the individual is enthusiastic about their work and is confident with the process.  They need to be willing to explain things over and over again without getting frustrated, until you understand completely.

Do not drive around or search online, find a pretty home, and call the number on the sign.  The agent on the sign is the listing agent and works on behalf of the seller.  You see, with any real estate transaction, there are two sides; the selling side, and the buying side.  You want to find someone to represent you and your best interests!  There will be an Exclusive Buyer’s Representation Agreement which says that you agree to work with your realtor for a certain, mutually agreed upon, amount of time.  If you decide you do not like your realtor, once you have signed this agreement… if you go out and do the deal on your own… you may still be responsible for paying your realtor a commission, even if you did all the work on the side.  Make sure it is a good fit before you sign.  Read the fine print and remember that everything is negotiable until it is in writing!

Check your gut.  What does your instinct tell you?  Before signing a Buyer’s Representation Agreement, ask if the Realtor can show you a couple of homes.  Pay attention to the feelings that you get now so that you aren’t stuck in a binding agreement later with someone who is just isn’t a good fit.  As reported by The 2012 National Association of Realtors® Profile of Home Buyers and Sellers, “Two out of thee buyers interviewed only one agent.  Eighty-nine percent of buyers are likely to use the same agent again or recommend to others.”  My personal recommendation is that you speak with a couple, unless you come across me first, and then look no further… You’ve found a Realtor on your side!

One more word to the wise;  Older and in the system longer does not necessarily mean better.  Sure experience is important!  They need to know the ropes, and understand the market.  But you also want someone who is eager, enthusiastic, and up to date with the market.  They need to be up to speed with the latest technology, social media, and community in general.  How cool is to find a realtor that utilizes text messaging, or Facebook?  Yeahhhhh, come on out of the stone ages!!

In conclusion, and back to Maslow’s hierarchy of needs, buying a home and the people you choose to work with can affect many of your basic needs at some point along the way.  At the upper part of the pyramid you will see a need for friendship (love/belonging), respect by others (esteem), and problem-solving (self-actualization).  A great Realtor will not only help you with the most basic of needs, finding a safe shelter, but will also be a friend, will respect your choices and desires, all while helping you to problem solve through the process with your best interests at heart.

Pick Me!So if you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area, pick me, pick me!  Call today or submit your information below so I can be your own personal Buyer Representative!

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

Honey Stop the Car!

You just arrived at Fort Campbell and are driving around neighborhoods looking for homes.  Or maybe you have been living on post and you have just decided that you might want to look into buying.  You come across a beautiful house that looks like everything you might want, except there is one little problem… You can’t get in to see it.  Not to worry, there is a Realtor® and contact number right on the for sale sign in the front yard.  You can just call them to let you in, right?  A few things to consider about that…

The FOR SALE sign.  It has a name and a number of a Realtor®.  Who do you think that Realtor represents?  You and everyone else who happens to drive by and call?  Or the person who is trying to sell the home that has the for sale sign in the front yard?

Let’s start with a few definitions from the Tennessee Association of Realtors® (TAR) form F1(b), Working With a Real Estate Professional.  In the state of Tennessee, there are a couple of different agency types; designated agent, dual agent, and facilitator will be our focus.

Facilitator/Transaction Broker.    The Licensee is not working as an agent for either party in this consumer’s prospective transaction. A Facilitator may advise either or both of the parties to a transaction but cannot be considered a representative or advocate of either party. “Transaction Broker” may be used synonymously with, or in lieu of, “Facilitator” as used in any disclosures, forms or agreements. [By law, any licensee or company who has not entered into a written agency agreement with either party in the transaction is considered a Facilitator or Transaction Broker until such time as an agency agreement is established.]

Agent for the seller. The Licensee’s company is working as an agent for the property seller and owes primary loyalty to the seller. Even if the Licensee is working with a prospective buyer to locate property for sale, rent, or lease, the Licensee and his/her company are legally bound to work in the best interests of any property owners whose property is shown to this prospective buyer. An agency relationship of this type cannot, by law, be established without a written agency agreement.

Agent for the buyer. The Licensee’s company is working as an agent for the prospective buyer, owes primary loyalty to the buyer, and will work as an advocate for the best interests of the buyer. An agency relationship of this type cannot, by law, be established without a written buyer agency agreement.

Disclosed Dual Agent (for both parties). Refers to a situation in which the Licensee has agreements to provide services as an agent to more than one party in a specific transaction and in which the interests of such parties are adverse. This agency status may only be employed upon full disclosure to each party and with each party’s informed consent.

 Designated Agent for the Seller. The individual Licensee that has been assigned by his/her Managing Broker and is working as an agent for the Seller or property owner in this consumer’s prospective transaction, to the exclusion of all other licensees in his/her company. Even if someone else in the Licensee’s company represents a possible buyer for this Seller’s property, the Designated Agent for the Seller will continue to work as an advocate for the best interests of the Seller or property owner. An agency relationship of this type cannot, by law, be established without a written agency agreement.

Designated Agent for the Buyer. The individual Licensee that has been assigned by his/her Managing Broker and is working as an agent for the Buyer in this consumer’s prospective transaction, to the exclusion of all other licensees in his/her company. Even if someone else in the Licensee’s company represents a seller in whose property the Buyer is interested, the Designated Agent for the Buyer will continue to work as an advocate for the best interests of the Buyer. An agency relationship of this type cannot, by law, be established without a written agency agreement.

So is your TN real estate agent your loyal advocate?  By legal definition, not until you have both signed a Buyer Representation Agreement.  According to the Tennessee Association of Realtors® (TAR) Consumer Guide to Agency Law in Tennesee, “Once you have signed a Buyer Representation Agreement, this contract obligates your agent to be your loyal advocate and to promote your best interests above all others in the negotiation and closing of a successful purchase.”  As reported in the 2012 National Association of Realtors® (NAR) Survey of Home Buyers and Sellers, “59 percent of buyers working with real estate professionals had a buyer representative arrangement.”

Now you may be wondering, “What exactly is a Buyer Representation Agreement”?  In simple terms, a Buyer Representation Agreement details my duties to you as your agent, yours to me as a buyer, and that we mutually agree to work with each other.  I agree to work as your representative, and you agree to be represented by me.  It also specifies things like the length of time that the contract is good for, what type of home you are searching for, and the sources used for the search.  You can view the entire document here: EXCLUSIVE BUYER REPRESENTATION AGREEMENT (Designated Agency)

Now that we got the contractual stuff out of the way, onto the nitty gritty.

6 reasons NOT to call the Realtor® on the sign:

1.  Buying a home is an emotional process.  It ranks right up there with getting married, and having a baby.  As an agent for you as the buyer, I can offer an unemotional perspective.  I can guide you to statistics regarding the trends in the market, the schools, and different parts of town, especially if you are not familiar with the area.  I can give you ideas of things to consider in the long term and help you decide things like Tennessee vs Kentucky.

2.  My services to you as a Buyer Representative are practically free.  The commission percentage is agreed upon between the seller and the selling agent.  Generally, the selling agent will agree to split that commission with the buying agent, so you my friend, are off the hook!  All of my expert assistance, with no money down!

3.  All of those Realtors® that you have called from the signs in the yard of the homes you want to see will probably bug you endlessly until you buy a home from them or enter into an exclusive agreement with another Realtor® and tell them to BUG OFF!

4.  There is an extremely HIGH probability that the Realtor® on the sign represents the seller and their best interests first and foremost.  Of course they want you to buy that home from them, and then they don’t have to split the commission!  So are you going to rely on that seller’s agent for advice and guidance?  There are circumstances when dual agency is appropriate, but I assure you that you will be fully aware of those details if you work with me, and our business relationship will be disclosed in writing.

5.  You may feel like you are “in the spotlight” and enter into an agreement that you are not able to get out of without doing your homework first.  Ask around, search the internet, and choose from the 703 Realtors® registered with the Clarksville Association of Realtors® to find the one who is best for you.  You don’t have to choose the first one you come into contact with… UNLESS it is me, because you’ll love me and you won’t want to work with anyone else!

6.  Finally, and most importantly, you are always supposed to call me first!  (Haha, that was funny)  But seriously, call me and I will go above and beyond for you because I love what I do, and I represent my buyers loyally – (931) 436-6765.  Not only am I am licensed Realtor®, but on a personal level, I’ve been there!  I’ve made Permanent Change of Station (PCS) moves three times with my family.  I’ve flown into areas that I have never before seen in my life and didn’t know a soul.  We’ve bought three homes and have gone from Military Homeowner to Investor.  I can show you any home listed on the Multiple Listing Service (MLS), not just the homes that are listed with my company.  I will be like your own personal assistant, saving you time, helping you to navigate the housing market, drawing up paperwork, and negotiating on your behalf.  Isn’t it better to have one go-to person that can show you any property and answer any questions, versus having to track down a million different Realtors® from a million different companies (ok, maybe not a million), and try to keep them all straight?

In closing, when we speak of the Buyer Representation Agreement, I offer a rare option.  If you decide you just don’t like me, and you are ready to break up with me, even though I might go home and cry a little, as long as you give me a chance to make it right, if we still can’t resolve the problem, I will release you from our agreement and refer you to another Realtor® who fits you better.  This is unheard of.  Most Realtors® will keep you tied to the agreement for however many months you signed for.  And watch out for that carry-over clause.  You may be stuck even longer.  But the way I look at it is, if it’s not working, it isn’t good for me or for you to be forced to continue working together.  I am confident that I can help you with whatever your real estate goals are, you will love me, and we will all live happily ever after!  THE END.

So if you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area, you have found a Realtor® on your side!  Call me today or submit your information below so I can be your own personal Buyer Representative!

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.