BUYING A HOME: MEET THE REALTOR
This person is central to the process.
The real estate agent, or realtor, is the person most people think of first when they imagine buying a home. It’s only natural. They have their pictures on bus shelters, mall ads and For Sale signs, right? So what does a realtor do, exactly?
Realtors can act as representatives for either a buyer or seller in a real estate transaction. They must be licensed — each province and territory has its own licensing regulations — and belong to local, provincial and federal associations.
Interesting fact: in many cases (especially at the more famous real estate agencies), realtors pay a hefty desk fee to associate themselves with that high profile company name.
This means the real estate company makes most of their money from the agents themselves – and when a property is sold, nearly all of the commission goes to the realtors on either side of the transaction.
This means that real estate agents are highly motivated to move a lot of product, just to keep their own heads above water. And that’s good, right? We want motivated people working on our behalf. Right?
Well, yes. But it also means that people selling homes come in a couple of shapes and sizes: some are great sales people, while others are knowledgeable realtors. The former know how to close a deal. While the latter know about local building codes, historical buying and building patterns, city zoning trends, and the like. We’ll talk about questions to ask realtors in a future blog post.
Typically both the buyer’s and seller’s agents receive their fee as a percentage of the final selling price. That means when you agree to buy a property, you should not be asked to pay additional fees to the agents.
For the seller, the main advantage of using a realtor is exposure: through networking, web listings and office support, a good real estate agent can get your property listing in front of more pairs of eyes in a shorter amount of time. The law of averages suggests that when more people see your listing, the more likely it is that one of them will want to buy your property.
For the buyer, a good realtor can offer advice and assistance regarding the kinds of property that fit your wants and needs. They have expert knowledge of local neighbourhoods and the laws governing property transactions. As well, they often work in tandem with mortgage brokers to assist buyers to optimize purchasing power.
Just as you might compare between products and prices at different shoe stores, there’s nothing wrong with saying “Just looking” to a realtor. In fact, you can gauge a lot about an agent by how they react when you want to browse. (There’s only so much you can tell about a person from that bus stop ad, after all…)
Take your time. Prepare a list of questions for potential realtors before you call. Ask friends and family for names of agents they’ve had good experiences with. Search local forums for online reviews and chats about various agents and offices.
Keep notes about who you speak with, and what they say. And above all, talk with us first about your financial options early on in the process — a realtor will typically ask you how much you’ve got in your budget right up front anyway. We can give you a picture of what you’re able to spend, and we can also provide you with resources to learn about the rest of the homebuying process.