The biggest MYTH about the Buyer's Real Estate Agent

When we get a lawyer, we would expect the lawyer to be on our side. There is the defence lawyer who is on the defence side. There is the prosecutor who is on the prosecution side.

One would then naturally believe that just like a Seller's Agent would be on the seller's side, then the buyer's agent would be on the buyer's side.

Unfortunately, this belief is absolutely untrue. This belief is a marketing gimmick to trick the buyers. 

Fact is, both the seller and buyer's agent is on the seller's side!

Think of it this way. It is the seller that has agreed to use and commit to the services of the Real Estate Association in that province. It is the seller that is paying the seller's agent AND the buyer's agent. The seller wants to sell the house at a high price to get the most money. The seller's agent want to sell the house at a high price to get the highest commission. The buyer's agent want to sell the house at a high price to get the highest commission.

There is absolutely no benefit to the buyer's agent to help the buyer find valuable homes at low prices. If such houses exist, the buyer's agent would buy the houses instead of selling it to someone else.

Thinking a buyer's agent is on the buyer's side is like thinking the salesperson who works on commission (like FutureShop) is there to help you get the lowest price!

The buyer's agent is a salesman hired and paid for by the seller to help the seller sell the house.

The only control the buyer has over the agent is selecting the agent. The buyer has the right to hire and fire the agents he chooses. Once the agent is selected, the agent could be helping the seller get the most for his or her money. So be careful!

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Where to find an honest Real Estate Agent

Word of mouth
As long as the source that you got real estate agent from is reliable, then there is a high chance the agent is reliable and a low chance the Real Estate Agent is a scammer.

Just attending open houses
Open houses are properties that are for sale and are available for viewing at certain times. Often times, during the summer, you may notice signs on the corner of the street posting an open house. This sign leads you to a house for sale where the agent is waiting for interested buyers. For the agent, it is not only an opportunity to sell the house, but also to sell himself or herself as your agent. Since this agent already has clients, these agents may be more reliable than just an unknown stranger off the street. You will certainly still have to go through an interview process with him or her and make sure this agent is reliable.

Newspaper ads and Real Estate Sessions
Real Estate Agents usually spend some time investing in advertisement. They could range from a Billboard sign to a classroom session where they may teach something. I prefer the classroom session. A billboard sign does not tell you much about the agent. Certainly not enough to make any decision.

The Internet
By surfing the Internet and just typing in Real Estate agent plus the city you are looking for, you will get a list of eager agents. If you see an agent on the top ranked of the search engine, that only implies these agents have done a good job in marketing themselves. That does not imply they make good Real Estate Agents. Often times, I see the top raked sites are the worse agents. These sites contain useless information that does not help you in any way, but only intended to help the site get a better ranking from the search engine. I ABSOLUTELY DO NOT recommend you pick the agents where their sites are ranked on top of the search engines.

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How to interview your Real Estate Agent

Your Real Estate is applying for a job you are offering. You need to interview your Real Estate Agent to see if he or she is a good fit into your team that will help your purchase a house. Your team consist of a Real Estate Lawyer, a lender, perhaps a home inspector and the Real Estate Agent.

There are two stages to interviewing your agent.

First, is the discussion stage to see if you can get along with your agent. My preference is to always talk to my agents in an informal manner. My agent may know every word he says, every action he makes could determine whether I would keep him or release. My first priority is make sure my agents is honest and fair. There is no need for my agent to suck up to me and no need for my agent to work extra hard. These additional wants often lead to agent pretending to be somebody else. I will ask my agent questions and advise, not because I don't know the answer, but because I want to know how my agent will answer.

Second, is the watching the agent in action where the agent takes you to tour the houses and see how your agent interacts with you. Often times, I would look at the agent's response before looking at the house. That's because it is more important to make sure you have good agent than to make sure the house you are looking at is worth buying. If the agent is acting like the house is a good buy even when it's not, then that's bad agent. If the agent is always complimenting every house, then I would wonder about his intentions. By observing the agent, you may notice what the agent's priorities are. Is the agent interested in offering me a house worth buying or is the agent interested in selling me any house so that he can quickly get the commission.

Do not just interview one agent. By interviewing multiple agents and if your expectations of your agent is fair, you should be able to find a decent agent. Do not reveal what you are looking for. By revealing that, the agent can pretend to be that. Do not deceive your agent. Your agent is human also. Treat your agent with respect and aim to get the same. Just like you need to watch out for those terrible agent, your agent needs to watch out for those terrible clients.

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What you can and cannot expect from your agent

Agents are often in a tough situation. In order for them to make money, they need to please they're clients and at the same time still be honest. Sometimes there two factors don't agree with each other.

So the most imporant thing you can expect from your Real Estate Agent is a comparable analysis. This is a document that only Real Estate Agents has and tells you sold house prices. This statistical data helps you decide how much you should pay for, for a house with similar size, type and location.

Simply put, if your agent does not provide you that, fire him! Do not ask him to provide you that. The agent should initiate it. This is a good test to see if your agent is honest.

Aside from that, any other additional knowledge can be seen as a plus, but realize your agent could be wrong. Do not trust your agent with any other kinds of questions.

If you are wondering whether a house is a good investment, don't ask your agent. Your agent has to say yes in order o encourage you to buy.

If you wonder whether your house is legally liveable, ask your lawyer.

If you wonder whether you can afford the house, ask your mortgage broker.

As a home buyer, you are essentially establishing a team to help you buy the house of your choosing. Your team needs to work well together and at the same time, inform you when any one member of your team is not putting his/her weight and/or deceiving you. To do that, it may be best to get referrals, but not all from the same team members. That is, do not ask your Real Estate Agent to help you hire your lawyer, home inspector and all your other members. If your Real Estate Agent is a crook, then the other team members will also be.

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The best Real Estate agents

Ok, so we can all agree that a hard working, honest, good agent is the kind of agent you are looking for.

Now, the next question would be out of all the honest, ethical agents out there which ones will suit you best?

First, one would belief an experience agent is better than a new inexperience agent. That is a MYTH. What you will notice is that inexperience agents have its perks. Many inexperience agents work harder. They work harder because they are new at their job and they really have to establish themselves. They need to work harder. Secondly, inexperience agents are less likely to be dishonest. Once when agent knows the rules and ropes, they will try to pull strings and see if they can get away with it. An agent who is helping you find your home may also be trying to help himself get the commission fast. Perhaps, like a child, inexperience agents are much too naive and scared to break the law. Inexperience Real Estate agents may tell you things an experience one knows better not to.

So what are the benefits of having an experience agent? The most important difference between a skilled agent and unskilled agent is the point of negotiating the sale price of the house. Everything else is matter of following procedure and giving you all the information you need to decide on your own. Following procedure does involve some experience, but it is not important as gaining the skill to negotiate well.

So the question for you is, do you need the agent to have more control in negotiating the sale price of the home for you or do you need more control in the negotiations. One may argue that it is always best to have a skill negotiator on your side. Rightly so, that is true. However, you already have a lot to look for in an agent. If you prefer to have more control in negotiations, then you can concentrate your efforts in other characteristics of finding the close-to-perfect agent. One thing to note is that an agent with strong negotiating skills may also be smart and devious enough to trick you into buying a less then your desired home.

Now, to look for an agent with negotiating skills, simply observe their behavior. Do not ask them upfront whether they have strong negotiating skills. Almost every agent will say yes. Look for things such as providing you with innovative tricks to get the best deal or they show you past statistics where they have negotiate better than other agents.

Remember, it is not in an agent's best interest to get you the lowest price because they lower the price, the lower their commission. It is in the agent's best interest to get you the highest price that you are willing to buy for. Do not reveal to your agent your highest price. Your agent does not need to know.

What you can do after your Real Estate Agent has scammed you?

Although this is the last article in my series of understanding Real Estate Agents, it is generally the first one people read. People often get scammed before they realize Real Estate Agents can be deceptive. It is not made public in the same stature as car salesmen or repairmen where people just believe Real Estate Agents are telling the truth. Unfortunately, this is intentionally done. The Real Estate Regulators within each Province protects Real Estate Agents. It does not protect the buyer.

The only thing you as the buyer can do is contact the Real Estate Regulator within your province and report the case. For example. in Ontario, http://www.orea.com/ would be the organization to contact. If you go on their web site, you'll see a bunch of friendly faces that appear to care about your Real Estate needs.

Once when you report it, they will request for more evidence relating to the incident. This is where you as a buyer will fail. It is highly unlikely that you have any strong or any evidence at all that your Real Estate Agent has scammed you. Your Real Estate Agent will then deny everything and because there is no evidence, the Real Estate Agents walks freely and continues to perform his profession onto other innocent victims.

To this day, I have never heard or seen any Real Estate Agents get expelled. One may wonder what these Regulators really do.

The bottom line, prevention is the best medicine. Let others be aware of the potential scams Real Estate Agents can pull.

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