Every industry has its share of insider knowledge, quirks, and idiosyncrasies. Louisville real estate is no different. As society grows ever more complex, expertise becomes more and more valuable. But what the heck are agency agreements?
For people selling their home, there are times when selling without a Realtor® may make sense. The seller pays both sides of the commission and that’s no small amount of money. So, a solid argument may be made for a homeowner selling their property without an agent.
(Please note, offering a cooperating commission, one side, is almost always a smart choice. Offering no commission to a buyer’s agent is a recipe for frustration, in my opinion.)
Now all of that refers to selling a home. Buying a home is a separate deal. People buying a home should always use a Realtor. On to the point of this post.
Who Is Your Realtor®? How Do You Know?
One of the quirky things about real estate is that customers don’t always understand how the buying process work. They often think of Realtors as merely salespeople—like a clerk you might find at Macy’s or Best Buy.
Unless the reasoning behind the process is thoroughly explained to them, a buyer might call a Realtor® friend from college on Monday with a question about financing. Then on Sunday, they might call the listing agent for a home they saw online.
Given enough time and the buyer might call a 3rd and 4th agent, not understanding how that affects their relationship which each of them who want to be their only agent.
What Makes You My Realtor®?
Here’s the danger. If an agent is not secure in their relationship with the client, there’s a level of apprehension that doesn’t serve either party well. Realtors put in a great amount of time searching properties online, sending emails or texts, arranging showings, following up with feedback and a myriad of other tasks all with the goal of helping a client purchase a home.
Here’s the point, a Realtor® only gets paid if a home is purchased.
Most good agents don’t mind helping a client over the course of several months, even years, as long as they know they will be the Realtor® who gets to sell the property in the end.
Finding the Best Louisville Realtor® for You
Buyers have the freedom to choose whomever they like to represent them. They can start with one agent and decide that person isn’t a good match or isn’t putting in the time needed to help the buyer find exactly what they want, and then move to another agent. Here’s where agency agreements come into play.
On the selling side, there is a Listing Agreement, which outlines the terms of that business transaction. But what do buyers have? It’s called a Buyer Agency Agreement. These are a simple contracts that outline the responsibilities of both parties, the terms of the agreement and has space for both parties to sign.
The Benefits of Agent Agreements
The plus for buyers is that they know what to expect from their agent. It’s right there in black and white. If the agent doesn’t produce, ending that arrangement is spelled out in the agreement.
For the Realtor®, they can feel better knowing the buyer has committed to using their services so all the long nights, weekend showings and abundance of paperwork will produce positive results in the end, in the form of a paycheck.
It’s my opinion that the entire Louisville real estate market would run more smoothly if Buyer Agency Agreements were required. All parties would know better where they stood and misunderstandings would be far fewer.
If you have any questions about what type of information lives in a Buyer’s Agency Agreement, please comment below or feel free to contact us.