HERE’S A LIST OF 20 QUESTIONS
TO ASK POTENTIAL BUYER AGENTS
Real estate agents must inform home buyers of the things they can and cannot do when representing home buyers. Read, study and understand each of these questions and then ask prospective agents for their answers. The Truth Will Appear! The most important thing you can do when buying a home to help you to avoid costly mistakes is to choose the right real estate agent before you start looking for homes.
1. Do you, or the Company you are with, take listings? Only exclusive buyer agents never take listings and never represent sellers. An agent or the employing brokerage company that takes listings cannot provide 100% loyalty to homebuyers 100% of the time.
2. Will you try to sell me one of your listed properties before you show me listings from other Real Estate Companies? Agents that take listings attempt to sell their listings first and their company listings next before showing other properties.
3. Do you have information about FSBOs (For Sale By Owner) properties available? An agent should be willing to show all homes available for sale, not only those listed on the MLS.
4. Do you represent Buyers as an Exclusive Buyer’s Agent? The agent should be willing to promise in writing to the buyer a full fiduciary obligation of loyalty, obedience, confidentiality, full disclosure, due care and accountability. Anything less is not in the best interest of the buyer.
5. Do you know the six fiduciary, client level duties you would owe to me if I chose to hire you as my Buyer’s Agent? They are:
Undivided Loyalty – Prohibits the agent from advancing any interests that are adverse to your own.
Obedience to Lawful Instructions – Requires the agent to act subject to your continuous control and for the agent to obtain and follow all lawful instructions from you.
Full Disclosure – Requires the agent to disclose all information concerning your home purchase which might effect your best interest. Things such as the seller’s motivation for selling, the price the seller paid for the home, deferred maintenance or defects in the home, price comparables for similar homes, listing history of the home, potential problems in the neighborhood, etc.
Confidentiality – Prohibits the agent from disclosing confidential information obtained from you such as: the price you are willing to pay, the amount of loan you are actually qualified for, how much cash you have to work with or the level of your motivation to buy a particular home.
Reasonable Skill and Care – Requires the agent to protect you from foreseeable risks and to recommend that you obtain expert advice when your needs are outside the scope of the agent’s expertise.
Accountability – Requires the agent to properly handle all money received and advise you of all fees involved in a transaction.
6. What percentage of your personal business and your company’s business involves being a Buyer’s Agent vs. being a Seller’s Agent? It should be 100%.
7. What training have you taken that specifically relates to being a Buyer’s Agent and representing buyers? The agent should have completed numerous courses and seminars on home construction, contract law, negotiating, financing, and appraising dealing specifically with the practice of representing buyers.
8. Do you have any specific Buyer’s Agent professional designations or do you belong to any National Buyer Agent Organizations? Such as:
CBA – Certified Buyer’s Agent – Sponsored by the Buyer Broker Institute; REBAC – Real Estate Buyers Agent Council
9. Who will you represent if I am interested in one of your “in-house” listings? Will you want me to allow you to be a “dual agent”? A true buyer’s agent has to either refer you to another agent with another company or operate as a “dual agent”. A true buyer’s agent never operates as a dual agent. However, most traditional brokers will. They want both sides of the deal, the “double-dip” so to speak. Dual Agency makes more money for the traditional broker and many of the larger companies rely on Dual Agency as a routine business practice.
10. Do you know which fiduciary, client level duties I give up if I use a dual agent? You give up the right to the two very important duties of Undivided Loyalty and Full Disclosure.
11. Dual Agency is legal in Oregon with “informed” consent. What does “informed” consent mean and what are the negative aspects of my using a dual agent? “Informed consent” means that the agent has the legal duty to “fully inform” you of all the negative aspects of Dual Agency. The common practice among traditional agents however, is to “disclose” and not “fully inform”. The dual agent no longer owes you their fiduciary duties (See #10 above) such as Undivided Loyalty, and Full Disclosure. These are pretty important duties. The dual agent can’t be an advocate for you, can’t negotiate for you, can’t suggest an offering price, and can’t point out potential defects or problems. The dual agent can’t provide you with information about the seller such as motivation for selling, price they paid or how long or how many times the property has been on the market. Yet, the dual agent still wants to be paid the same amount of money that they would get if they fully represented you.
12. Do you really think it is in “my” best interests to use a dual agent? It is not in your best interest to use a dual agent. Attorneys know better and do not represent both of two opposing parties. Buyers and Sellers have conflicting needs and deserve true, full and independent representation at all times. Dual Agents still expect to get paid the same amount of money as if they were fully representing you. If you allow an agent to be a dual agent than don’t let them get paid a full fee. Tell them you expect a lower fee due to their reduced services and representation.
13. Do you use a written buyer agency contract? (Ask for a copy) This is an employment agreement, much like a listing agreement between a seller and a seller’s agent. It puts in writing what is expected of the buyer and the buyer’s agent, what services are being provided and the cost of those services. This agreement should protect the buyer from the agent. Agents who don’t use a written buyer agency contract are very casual about buyer agency and probably don’t have the professional experience, skills or knowledge to properly represent you as evidenced by the fact they don’t put their services and costs in writing.
14. If I don’t like the job you are doing for me or if I don’t want you to be a dual agent, will you let me cancel my agreement? You should be able to cancel your agreement at any time with a written notice.
15. Does it cost me anything extra to have a buyer agent represent me? You could possibly save money as commissions and fees are negotiable under state law. Any conflict is fully explained. It costs buyers nothing additional to have an exclusive buyer agent represent them.All fees are always paid out of the mutually agreed upon purchase price.
16. How will you help me save money? A buyer’s agent should state in writing that their goal is to try to save you money on the purchase price, the loan, repairs and insurance.
17. Will you help me shop for a mortgage to get better rates or pay lower fees than what is usually available? A buyer’s agent should guide you in the use of the services of a mortgage broker and look out for your best interests to help you obtain a loan with the lowest rates and lowest closing costs.
18. Will you provide me with a list of home inspectors, pest control inspectors and lenders to represent me? A buyer’s agent should take the responsibility to investigate the competency of inspectors and lenders. An agent should not simply give you a list and tell you to choose one.
19. How many buyers have you successfully represented in the last six months? Will you provide me with the names and phone numbers of at least six of those for me to call? A successful buyer’s agent should be proud of their representation of their buyer clients and be pleased to give you references.
20. How will an exclusive buyer’s agent protect my interests better than another agent claiming to be a buyer’s agent? Exclusive buyer agents only represent Home Buyers Only and never take listings or ever represent sellers, thus will never be a dual agent. Exclusive buyer agents are REALTORS