Step 1 in the homebuying process is perhaps the most important step, but it is the step that people give the least attention to. It is crucial to pick an Agent before you pick a home because a good Agent will save you time, heart-ache, and frustration. They will ensure that you’re only looking at homes which truly are available, which truly fit your lifestyle, and which truly meet your needs.

How Agency Works

In your typical real estate transaction, you have 2 parties, the Buyer’s party, and the Seller’s party. Typically, each is represented by a different real estate agent. The Seller’s Agent is called the Listing Agent because they are the ones who have listed the home for sale. The Buyer’s Agent is called the Selling Agent because that is that Agent that found a Buyer for the home. Sometimes there will only be one agent who represents both sides, but for the sake of this presentation, I will ignore that arrangement for now.

History of Agency

So here’s a quick history lesson. Historically, there was really only representation for the Seller—you had an agent trying to sell your home, but no one was looking out for the best interests of the Buyer. It wasn’t until the 1990s that Buyer Representation came to be. Before 1994, there was really no advocacy for the Buyer, who was treated as a customer instead of a Client. It was about that time that written agreements between homebuyers and Agents became common, and that Buyers started to have more control over the real estate transactions. Unfortunately, the legacy of Seller-only representation led to a mistrust in real estate agents, who were seen as salespeople instead of counselors. The legacy also created some misconceptions which have carried over into today’s real estate marketplace.

Common Misconceptions

The misconceptions mostly revolve around the concept of Agency, and the role of Agents in the transaction. The biggest mistake that people make is not knowing who the Agents work for, which causes them to get their information from the wrong sources, and sometimes they get poor advice because they asked the wrong person to advise them.

Common Misconceptions: The Internet

For example, if you’re like the other 80% of homebuyers who are looking online homes, you may end up at a website such as REALTOR.com. Now lets say that you find a home you like, do you know who to contact for more information? Say that you like this home and you want to know more. Do you call Billy for more information? You can, but you have to realize that A) Billy works for the Seller and his job is to act in the best interests of the Seller, and 2) If you’re not interested in the house after all, Billy is probably going to try to sell you something else, and since you’ve called him first, he now has permission to contact you. That’s why instead of calling the Agent who is trying to sell that home, you should contact YOUR agent who can do the research for you. Just imagine: if you call 6 agents for more information, you’re probably going to have 6 agents calling you back to “follow up”. If you have your agent look up the information, you can avoid that.

As an aside, you’ll notice that on our website, we have information on all the listings in the San Antonio MLS. You’ll also notice that most of those listings are not our own, which means that if you ask us for more information on those properties, we can help you as YOUR representative, instead of as a Salesperson representing the Seller. You’ll notice at the bottom of the listing information that we list the brokerage company and the name of the agent for each listing on our website.

Right here you can see that this listing is not my own, or own my broker’s. This listing belongs to John Foster so if you call me for more information on this house, I am free to give you any information you want because I do NOT work for the Seller like John does. As long as I represent YOU as YOUR Buyer’s Agent, I can provide you with information on this house, the market, and even a negotiation strategy!

Common Misconceptions: For Sale Signs

The same issues go for real estate signs. Say that you drive by a house that gets your attention.You might be tempted to call the Agent on the sign for more information. There’s nothing wrong with doing that just to get information, such as price, or the number of bedrooms. A good agent would have included that information on the sign or in a flyer box, but a lot of times they won’t do that so that you HAVE to call them. Again, once you call them, they have your information and will feel free to call you. So lets say that you call Billy Average and you’re interested in the house, so you make an appointment to see it with him. After talking with and seeing the home with Billy, you may have lost your right to get your own Agent.

Since he has already done the “work” for you, then why would he pay another Agent to work with you. You’ll get stuck working with him, even though you know he can’t legally represent your best interests. Is it that big of a deal? Well, would you go to court without a lawyer with the intent of using the other parties lawyer? No because that leaves you defenseless—but that is exactly what you do when you work with the Seller’s Agent instead of your own Buyer’s Agent.

Common Misconceptions: Cost of Agency and the Price of Homes

The last 2 misconceptions revolve around agency and money. Many people believe that using an Agent is going to cost them money, so they try to do everything alone. What they fail to realize is that when you see a home in the MLS for $200,000, that price already includes the commission, which will get paid to the Listing Agent regardless of whether or not you have representation. In fact, if you don’t have an Agent and instead use the Seller’s Agent, that Agent will probably get paid the full commission anyway, so you don’t actually save anyone any money. Finally, some people believe that if they choose to not use an Agent that the Seller will drop the price of the home, which is a dangerous assumption. Though the Seller might, and that’s the keyword, MIGHT, be willing to do this, their Agent might not. The reason being, again, that if the Seller’s Agent is working for the Seller, and now has to do work to help you in the transaction as well, then they will probably want to be compensated for the extra work they’ll be having to do to make the transaction come to fruition. Again, you end up with no representation, and potentially no savings.

How to Choose an Agent

OK, you’re smart and you get it, you NEED to have a Buyer’s Agent. Well, there’s 8000 of them in San Antonio, how do you choose one? That is going to be up to you. Some people prefer to work with friends or family, someone from Church, or school, etc. I would personally recommend choosing one on ability instead of familiarity. Ultimately, what you need to do is assess your needs because you know yourself better than anyone. Do you need an Agent who is going to hold your hand at all times for 6 months? If so, there’s nothing wrong with that, but you need to find an Agent who has the ability and desire to work with you under those terms. Do you have a crazy schedule and need an Agent who can be flexible and available on a whim? Then find an Agent who is willing to do so. Along with that comes communication styles. You need to find an Agent who is able to communicate the information that you want, in the way you want to receive it. For example, some people prefer to communicate by telephone, while others prefer e-mail. I know that most of my Clients have very busy schedules and prefer e-mail for the majority of our communications, but like phone calls for urgent matters—that is the way I prefer to communicate as well, so it works well for us.

Also, if you’re getting ready to PCS, you’re going to need an Agent that can preview homes for you, or that can block off time for you when you come into town. You’ll also want someone who is familiar with the process: someone that knows that JPPSO will be bringing your household goods after you move in, that knows how TLFs work, etc. You want someone familiar with what you’re about to go through–that can help save you time and frustration!

You should also make sure to look at your potential Agent’s credentials, which is something that people don’t do closely enough. You wouldn’t hire a Doctor who only works part-time or who isn’t qualified to care for you, so why would you choose an Agent who isn’t qualified to take care of you either. I would recommend that you interview your potential Agents and you look closely at their backgrounds to see if they’re qualified to work as your Buyer’s Agent. Do they have service experience? Do they have analytical skills? Negotiation experience? Are they really qualified to work with you? Many agents pride themselves on their salesmanship, which is a highly-acclaimed real estate skill. While it’s great that they can sell a lot of homes, you have to determine whether they’re going to be looking out for your best interests, or whether they’re looking to “hit their numbers” with you. Remember that selling a lot of homes does not make them great Agents: it makes them great salespeople, and would you rather have a well-trained Agent on your side, or a salesman?

If possible, work with an Accredited Buyer’s Representative or a member of the Real Estate Buyer’s Agent Council. These are people who have taken additional courses specifically in Buyer’s Agency and who are committed to working for, and serving the needs of, homebuyers just like you. Only about 11% of us in the residential real estate industry have this background. If possible, I’d also look for an Agent with past customer service or counseling experience, and analytical skills. You should also look for an Agent with a background in negotiation, or with at least some formal negotiation training. Few agents have that, and without practical knowledge of negotiation theory, many agents falter and leave value on the negotiation table. I have worked with agents that don’t even understand the basics of negotiation–that’s great for my Clients!

Conclusion

Finally, choose someone that you have a connection with. I’m not saying that you need to be best friends, have identical backgrounds, or have the same taste in music, but you need to like the person you’re working with. It’s incredible how often I hear people say that they don’t like their Agents, or that they don’t get a good vibe from them. If you don’t like someone, or don’t get a good vibe from them, then DON’T work with them—it’s better to end a poor agency relationship early and on agreeable terms, than to go through a transaction and come out with a distaste for the other person. Yes, real estate is about results, in your case you want to find the perfect home, but the process ALSO matters—and if you don’t enjoy the process of finding your dream home, then the results won’t be as sweet.