So, you may be looking to buy a house. Or you may just be curious about buying a house. Or even better, you may have bought a house and still not know exactly who, what or why things happened in the order they did.
Well, luckily for you Truepad is here, with the help of a top local agent, to help better understand certain terms, definitions, and processes of buying a home.
This ongoing series will highlight some of the trickier definitions or confusing aspects of home buying. What you will (hopefully) see is that when walked through the ideas properly, you will be empowered to find the right (and the best) home for you.
Buyer’s Agent vs. Listing Agent
This is a fundamental concept to understand, that even to some experienced home buyers isn’t exactly clear. The concept: Not every agent is just a real estate agent. Well, they are. Typically, you are going to work with a buyer’s agent or a listing agent, which is simply determined by which side of the transaction you fall into.
On Truepad, we show you the highest rated homes and top, local agents based on our proprietary data. Truepad uses info from the MLS (multiple-listing service) and agent tours to highlight the pros and cons of houses on the market. Armed with better information, buyers can easily find the features of homes, and quickly identify obvious deal-breakers. At the same time, they get to know trusted agents through their reviews.
Both buyer’s and listing agents deal with lawyers, mortgage brokers, and appraisers, and both are set on getting you the best deal. They do have different roles, though, in home transactions.
Buyer’s Agent – This is the real estate agent that you’ll use to find a home. You initiate contact with them, and they help guide you along the path of finding and buying a home.
A good buyer’s agent will set up a time to meet you for coffee and talk about your needs and wants. They will start to educate you on the process of buying a home, which is really confusing at first for most people.
Buyer’s agent and first-time homeowner specialist Mike Opyd, of the Matt Laricy Group (a part of Americorp Real Estate), emphasized learning the difference between what you want and what you really need. The latter is considered first.
“Do you have to be close to Lake Shore Drive, want a view, like an older building, don’t mind a smaller space, and can afford a $500-600 assessment? Then maybe you’d like a downtown high-rise overlooking Lake Michigan,” Opyd said.
The buyer’s agent is really here to help you figure this out.
Next, they set up appointments and guide you through home tours. They evaluate properties with you, consider neighborhoods, and offer insight on things like mortgage lending and property inspections. They may also refer an appraiser or lawyer for your team.
Working with a buyer’s agent has other benefits. Because of your business relationship, the agent can divulge exclusive information to you that can’t be found online or in the paper. This knowledge and expertise comes along with their fiduciary responsibility to you, meaning that if they know something that will benefit you, they have to share it with you-aka-the home buyer. Buyer’s agents tend to receive a percentage of the selling price as commission. What typically happens is the seller pays the listing agent and the listing agent will split the commission with the buyer’s agent. Some home buyers think working directly with the listing agent will save them money on the deal, but that isn’t necessarily true (and is a different post for a different day).
TL;DR – The buyer’s agent has a legal responsibility to get the best deal on a home on the market for you.
Listing Agent – The listing agent represents the person attempting to sell their house.
The listing agent works with the seller to generate an accurate price to list the home. They deeply research the history of the home and updates made to the home and property.
The listing agent fully represents the best interest of the seller, meaning that any and all information they obtain about the buyer can be shared with the seller.
What does this mean? Well, a lot of things. From how the house is presented in marketing or advertising to staging the house for showings, the listing agent spends a lot of time balancing between the seller’s wish and what the market dictates.
This also means holding “Broker Opens,” where the listing agent invites buyer’s agents to tour the home, generating more interest from buyers.
They also coordinate all of the inspections, attorney meetings, appraisals and other actions needed to sell the home and complete the deal.
TL;DR – The listing agent’s main job (after doing many other things) is to make sure the seller actually gets a good deal for selling their home.
Samuel Ciochon, of Coldwell Banker – Gold Coast, said, “The listing agent’s job is to maximize the amount of potential for the property, for the appropriate amount of buyers. They are really looking for what the end sales price will be (apart from the marketing price/listing price). The listing or marketing price is chosen strategically so as to attract realistic potential buyers.” Samuel is one of the site’s most accurate agents at predicting sale price, so he is an asset to whichever side he’s on—the seller’s or buyers. “It’s simple—if I’m getting multiple bids over the listing price, I’ve priced it too low.”
The Real TL;DR
So, both buyer’s and seller’s agents want to get the best deal for their client. And ultimately, neither party wants to leave money on the table. Negotiations happen for a reason, but there is also a collaborative spirit among agents, to help the process go smoothly and to have happy people at the end of it on both sides.
When you go on home tours, for example, your agent will offer feedback to the seller’s agent. Maybe the cat was a distraction on the tour, for example. Feedback offers the seller an impression of the overall value and quality of their home, as they are receiving information from multiple sources, not just their agent.
Feedback and Truepad
“Most people can’t discern what is a very good deal, and what’s not. An agent can evaluate the comps, and they know their neighborhoods, but the right agent will go further, and add tremendous value just in knowledge and smoothing the process,” said Michael Gerhardt of RE/MAX Edge.
At Truepad, we capture agents’ feedback, allowing buyers’ agents to publish information after touring a property. Higher-rated homes (and on Truepad, if the home is $150,000 or $1,500,000 it can receive a 4- or 5-star rating) receive prominent placement throughout the site. The agents with the most accurate feedback increase their standing on the site, too.
The feedback gathered from these reviews will allow you to sell you home faster and more efficiently. On the buyer’s side, you don’t have to guess which homes are great. Buyers go in informed, and more likely to be genuinely interested in the properties they’ve researched, saving everyone time.
Truepad provides a mutual benefit: for potential buyers to see both the positive and negative features of potential homes, and for the best agents to get noticed.
Buying a home is a complex process, but learning about it shouldn’t be. Be sure to check out more of our educational series and let us know if a topic is out there you would like to learn more about by contacting firstname.lastname@example.org.