Key Real Estate Roles When Buying or Selling a Farmington Hills MI Home

Key Real Estate Roles When Buying or Selling a Farmington Hills MI Home

Key Real Estate Roles When Buying or Selling a Farmington Hills MI Home

There are many types of professionals that work within the real estate industry. Knowing the key real estate roles and what they offer can be very helpful if you’re looking to buy a home in Farmington Hills MI or sell your existing property. In this article, we are going to discuss the similarities and differences of the different real estate roles, including real estate agents, brokers, REALTORS®, listing agents, and buyers’ agents, and how they each can bring value to a transaction: 

What Is a real estate agent?

A real estate agent is an industry professional who serves as the facilitator of real estate transactions. Agents are licensed salespersons and cannot work independently. Real estate agents work for brokers or agencies and are normally paid on a commission basis, which is a percentage of the sale price of a property. The employing broker is responsible for a real estate agents’ actions and requirements for a real estate salesperson license vary from state to state.

Real estate agents are ultimately responsible for bringing buyers and sellers together and for carrying offers and counteroffers between each party along with any queries they may have. An agent will work with another agent once an offer is accepted, guide clients through the process of filling out paperwork, and make sure their clients are aware of any requirements to complete the sale, such as home inspections, moving, and important dates like the closing.  

What is a real estate broker?

A real estate broker is a step above a real estate agent. A broker typically will have more training and subject-matter education than an agent (but not always) and will typically handle some of the more technical aspects of a real estate transaction. A broker can work independently or hire real estate agents to work under them.

Brokers who work with buyers normally look for properties that match the criteria set forth by their clients, conduct negotiations, prepare offers, and help the buyers with any other issues leading up to the closing date. Sellers’ brokers determine market values of their clients’ properties, list and show properties, communicate with sellers about offers, and assist in the offer process. A broker associate is a real estate broker who works for another real estate broker or a brokerage firm.

Although brokers can work for themselves, they may choose to join a larger real estate network. Some pay a flat fee to the employing broker and some earn a percentage of each transaction. Brokers receive a commission once a sale is completed.  The listing agreement or contract generally outlines how much of a percentage of the sale will go to the broker.

What is a REALTOR®?

Not all real estate agents or real estate brokers are REALTORS®. Although the word “realtor” is commonly confused with that of “real estate agent,” the designation is open to a variety of professions within the real estate industry. A REALTOR® can include residential and commercial real estate agents, brokers, property managers, appraisers, and other real estate professionals.

“REALTOR®” is a title that means the individual belongs to the National Association of REALTORS® (NAR), is bound by an extensive code of ethics, is an expert in their field, and pays annual dues.  REALTORS® are expected to be honest and transparent with their clients, avoid exaggeration and misrepresentation, and always conduct business with their clients’ best interest in mind.  

What Is a listing agent?

A listing agent can be a real estate broker or a real estate agent. Listing agents owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest. In other words, the agent must put your interests first.  Listing agents have a comprehensive understanding of how the real estate market works and how to market and price a property effectively. 

Their responsibilities include listing the property on various listing services; negotiating prices, contingencies, and conditions on behalf of the seller; scheduling showings, pricing and advertising the property; property, and help with the closing paperwork.

Most listing agents require sellers to sign exclusive selling agreements. By doing so, the agent secures a commission for his or her brokerage upon closing. The brokerage then shares a portion of the commission with the agent. 

What is a buyer’s agent?

A buyer’s agent is a real estate professional who guides a buyer through the process of purchasing a home. A buyer’s agent has a legal obligation to protect the interests of the buyer and work to ensure they are getting the best deal possible. Although there are some real estate agents who specialize in working with buyers, most agents work as either a buyer’s agent or listing agent, depending on the specific transaction. 

A buyer’s agent is responsible for acting as a resource for their clients by guiding them through each step of the home buying process. They find listings for the buyer, schedule showings, negotiate with the listing agent, recommend other real estate professionals such as real estate attorneys, inspectors, etc.; and guide and advise the buyer through closing.

Typically, it’s the seller who pays the commission for both the buyer’s agent and listing agent. If buyers are unable to find a home to purchase, the buyer’s agent doesn’t get paid.

The takeaway

Whether you are buying a home in Farmington Hills MI or it’s time to list your property, knowing the types of real estate professionals can help you make informed decisions. For example, when you hire a real estate agent, you may also want to dig into the real estate broker’s reputation, since that’s who the agent works for.

You may also prefer to work with a REALTOR® since they are held to a high ethical standard. Regardless of the type of real estate professional you work with, make sure they are experienced, knowledgeable, skilled, appropriately licensed, and have a stellar reputation.

Partner with award-winning Farmington Hills MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Farmington Hills MI for the past 20 years – offering his guidance and expertise to home buyers and sellers. Tom understands that buying or selling a home is a significant financial and life decision and that you are looking for someone you can trust. As your agent, he will protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure the best results possible. 

Feel free to reach out to Tom directly at (248) 790-5594 or you can get in touch with him by email.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

Should You Go Directly To The Listing Agent When Buying A House?

Should You Go Directly To The Listing Agent When Buying A House?

When you’re looking to buy a house, you might think it makes sense to go directly to the listing agent who’s listed the property for sale.

Some of the more common reasons people give for doing so are:

  • Why not? Doesn’t it just make sense… The agent listed the property and is the one selling it. They know all about the house.
  • They know all about the owner, so maybe you can get some inside scoop and a better deal than if you had your own buyer’s agent in the mix.
  • Isn’t it like buying a car? You have to go to the dealer selling the car, so don’t you go to the agent who’s selling the house?
  • Some people say they just didn’t know any better.
  • It’s just easier than finding and working with a buyer’s agent.
  • It’ll be easier to deal with owner.
  • And, last but not least, if the agent is representing both the buyer and the seller, people feel like the agent will get them a lower price. Either because the agent is getting “both ends of the deal”, and therefore making more money, so the agent has more incentive to get you the better deal… Or, since there’s no other agent involved, people feel that the price can be reduced by the amount of commission saved.

Some of the above is true to some degree. But, much of it is wishful thinking…or a complete misunderstanding of how things work.

So, let’s get into a few thoughts to help you decide if it truly makes sense for you to go directly to the listing agent when you’re buying a house.

The listing agent represents the seller.

Should You Go Directly To The Listing Agent When Buying A House Stop

Stop! Listing Agent Represents The Seller

OK, in most areas the listing agent can represent both the seller, and the buyer. As long as it’s disclosed that he or she is representing both parties, and both parties agree.

That doesn’t mean it’s the best thing for you…or the seller.

Think about it for a minute. It’s pretty hard for someone to represent the best interest of both parties entirely. It isn’t impossible. But it’s tough.

And the first person the agent represented in the scenario is the seller. So it’s safe to assume that the agent probably has more allegiance to the seller. And if the listing agent doesn’t…if the listing agent helps you, the buyer, get an upperhand, well, that just doesn’t feel or sound right.

But, if that sounds good and right to you, and you find a listing agent who’s cool being in cahoots with you, then more power to you. The thing is, most real estate agents don’t play that way.

So, at best, you are “hiring” someone to represent your interest and the interests of your opponent. Think of it this way, would you hire the same lawyer to represent you and the person you’re fighting in court?

No, buying a home isn’t always that kind of battle, but the transaction is certainly large enough that it makes sense for you to have your own representation.

You should have someone representing you as the buyer. Hire your own buyer’s agent. Hire someone who’s going to help you get the best house, at the best price and terms.

If a listing agent pushes you to work with them…

Sometimes a listing agent will either hint at, or outright say that if you want to get the home for a better price, or get the home at all, you need to work directly with them.

The minute you hear that, run for the hills. Go find another agent. Work with the other agent to buy the house. And consider reporting the listing agent who said that. That is a huge red flag.

You have every right and option to choose your own agent to work with. No incentive or fear of loss should be implied for you to work directly with the listing agent.

This is especially concerning if you are already working with your own agent, and the listing agent knows that, and suggests or pressures you to not work with the agent you are already working with. If that happens, make sure to tell your agent. Let your agent take it from there…and don’t worry about it losing you the house or a better deal. It probably won’t.

Buying is a process.

At least buying should be a process.

Haphazardly looking at homes you come across online, or by driving by can cause you to miss homes that agents are seeing come on the market. Or ones that you may have overlooked, that they may point out to you as a great option, once they get to know you and your wants and needs.

When you work with one agent for the whole process, (at least a good buyer’s agent), you’re more likely to find, and not miss the best house for your needs. As much as the Internet allows you a lot more access to the inventory nowadays, it can be hard not to miss something, or overlook a great option on your own.

And when you work with an agent from start to finish, you build considerable trust. And that trust translates into getting yourself a better home, at the best price possible.

But when you’re just out there on your own, going to see every house you look at with a different agent, with no intention of working with that agent if you don’t buy that one house they are showing you…that spells disaster. If the agent only has that one shot with you, there’s a higher chance of an agent pushing you or selling you on doing something.

A great buyer’s agent who you have a committed relationship will look out for you and your best interests. So, before you even get serious about looking at homes to buy, do yourself a favor and find a great buyer’s agent and hire him or her.

Going directly to the listing agent has less upshots than it does potential downsides.

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