Questions to Ask When Choosing a REALTOR®
When you are ready to buy a home, you will want to work with a real estate professional who is qualified, who has a good understanding of the market and the competition and who knows how to find a property that fits your needs. Before you choose the agent with whom you want to work, consider asking him or her the following questions:
- How long have you been in real estate sales? Is it your full-time job? (While experience is no guarantee of skill, real estate, like many professions, is perfected by doing.)
- What designations and certifications do you hold? (Designations, such as ABR, GRI, CRS, SIOR, and certifications like e-Pro, require that REALTORS® take additional, specialized real estate training and are held by about one-quarter of real estate agents. To read more about designations and certifications, click here.
- What is your real estate specialty? (homes, land or commercial transactions)
- How many residential home sales did you participate in last year?
- What is your responsibility to me as your client? Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction? (While it is legal to represent both parties in transaction, it’s important to understand where the agent’s obligations lie. A REALTOR® will explain the agency relationship to you and describe the rights of each party.) See below for information about buyer representation.
- How will you keep me informed of new listings that I may be interested in? How frequently? Using what media? (This is not a question with a correct answer, but one that reflects your desires. Do you want updates twice a week or don’t want to be bothered unless there’s a hot prospect? Do you prefer phone, e-mail or a personal visit?)
- Once we have an accepted offer, how will you keep me informed of the progress of this transaction?
- What is your commission percentage?
- Can you please give me the names and phone numbers of your three most recent clients?
Buying property is a complicated proposition. You need a professional – someone to answer your questions and guide you through the process. Someone who adheres to a strict Code of Ethics. So, make sure you’re working with a REALTOR®.
Many buyers today ask a REALTOR® to represent their interests in a real estate purchase. It’s a good idea to have a professional looking out for your interests when discussing your ability to purchase and negotiate an offer. But many people do not understand how to establish buyer representation.
Tennessee law requires a written agreement that clarifies each party’s responsibilities in a transaction to establish buyer representation. It’s a contract executed by you and your buyer’s agent.
The Tennessee REALTORS® publishes a form for this purpose. There are other forms with variances, but they are all very similar. Here are a few selected responsibilities from the TAR â form known as Buyer Representation Agreement.
The brokerage company of the buyer’s agent agrees:
- to use all diligence in locating property(ies) which meets Client’s (buyer) requirements and approval;
- to act on behalf of Client in any negotiations for the purchase of property(ies) acceptable to Client;
- to use professional knowledge and skills in assisting the Client throughout the transaction; and
- to exercise all duties to the Buyer as set forth in Tennessee Law and Regulation, including the duties common to all consumers as well as those duties reserved for agent-client relationships.
The client agrees:
- to furnish Broker on a timely basis with any necessary personal and/or financial information to assist Broker in locating the desired property(ies) and to ensure Client’s ability to purchase;
- to authorize Broker to negotiate for a fee paid by the Seller and/or the Seller’s agent, the payment of which will be fully disclosed to the Client. If a fee is not offered or paid to Broker, as could occur, for example, in the purchase of an unlisted property, Client agrees to pay Broker a total of $________.__, or _________ % compensation based on the total sales price.
It is important to note that a REALTOR® may provide real estate services to any party in a prospective transaction, with or without an agency relationship such as buyer representation to one or more parties to the transaction. Just be aware that until you and the agent have signed an agreement the agent is considered a facilitator and shall not be considered an agent or advocate for any party to the transaction.
According to Tennessee law, if an agent assists a prospective buyer or seller in the purchase or sale of a property, and such buyer or seller is not represented by this or any other agent, the agent shall verbally disclose to such buyer or seller his agency relationship before any real estate services are provided. The commonly used form for this written disclosure is known as Confirmation of Agency Status. This is simply an acknowledgement that disclosure has occurred; it is not a Buyer Representation Agreement.
Who Does the Agent Represent?
It is important to understand what legal responsibilities your REALTOR® has to you and to other parties in the transaction. Ask your REALTOR® to explain what type of agency relationship you have with him or her and with the brokerage company.
- Facilitator/Transaction Broker (not an agent for either party): The agent is not working as an agent for either party in this consumer’s prospective transaction. A facilitator may advise either or both 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 agent or company who has not entered 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.)
- Agency or Subagent for the Seller: The agent’s company is working as an agency for the property seller and owes primary loyalty to the seller. Even if the agent is working with a prospective buyer to locate property for sale, rent or lease, the agent 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 written consent.
- Agent for the Buyer (exclusive and non-exclusive): The agent’s company is working as an agent for the prospective buyer and 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 be established without written buyer agency agreement.
- Disclosed Dual Agent (for both parties): Refers to the situation in which the agent 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.
- Designated Agent for the Seller: The individual agent that has been assigned by their 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 agents in his/her company. Even if someone else in the agent’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 written agency agreement.
- Designated Agent for the Buyer: The individual agent that has been assigned by their Managing Broker and is working as an agent for the buyer in this consumer’s prospective transaction, to the exclusion of all other agents in his/her company. Even if someone else in the agent’s company represents a seller in whose property the buyer is interested, 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 written agency agreement.
Information in this section is excerpted from the Tennessee REALTORS® Form “Working with a Real Estate Professional.”