You are looking to buy your very first home. It could be anywhere, but let’s say you are planning a move to Salt Lake City, Utah. The greater SLC area is one of the hottest real estate markets right now. Trying to buy a house there means coming up against heavy competition. You would need a top-notch real estate agent to represent you.
CityHome Collective is a local real estate brokerage and interior design firm. They say Salt Lake City is home to a lot of great real estate agents who really know their stuff. But they also say that buyers should know what they are getting into.
Here are five things to know before you sign with a real estate agent, whether you are looking in Salt Lake City or elsewhere:
1. Agents Work on Commission
Though there are exceptions to the rule, real estate agents tend to work on commission. Their pay is a percentage of the sale price, given to them after closing. Why is this important to know? Because commission sales are a double-edged sword.
Your agent’s commission will be based on the final sales price. The higher the price, the more they get paid. At the same time, it is in their interests to do the best possible job they can for you. They need you to buy if they want to get paid. That might mean writing a lower offer because that is what makes you happy.
2. Buyer Agreements Are Required
Real estate agents almost always require their clients to sign buyer agreements. A buyer agreement is a legal contract between you and your agent. It stipulates the grounds on which your professional relationship exists. It also dictates what is expected of both parties. Beware of this going in and take the time to read and fully understand any agreement before you sign it.
3. Request an Agency Disclosure Form
Most states require agencies to provide disclosure forms to both buyers and sellers. The disclosure form clearly states who the agent is representing. More often than not, an agent will represent just one party in the transaction. But under a dual agency arrangement, you could have an agent representing both buyer and seller.
You need this form as proof that your agent is representing you and only you. On the other hand, a dual agency arrangement might not bother you. You would still need to know of any such arrangement, though.
4. You Have the Legal Right to Understand
Do not assume that you must sign documents you don’t understand. Quite to the contrary, you have the legal right to fully understand anything you are expected to sign. If you ever have questions, don’t be afraid to ask them. If your agent cannot give you a reasonable answer, you can have the documents in question looked at by an attorney. Along the same lines, do not ask your agent to give you legal advice. They cannot do so by law.
5. You Should Be Serious About Buying
Finally, you should definitely be serious about buying before you sign with a real estate agent. If you are only looking around to see what’s out there, you are wasting your real estate agent’s time. Their time is as valuable as yours. Respect that. You can casually look around by checking online listings and visiting open houses by yourself. Only sign with an agent when you are ready to go.
Real estate agents provide a valuable service to buyers and sellers alike. Now you know some of the preliminaries of signing with a buyer’s agent.