In an attempt to woo clients, real estate ads often sound either like slightly desperate personal ads (“You’ll fall in love with me!”) or like a description of some kind of magical therapy (“I’ll take all your stress away!”). This approach misses the most fundamental feature of your relationship with a realtor: agency.
Understanding how agency affects your relationship with your real estate agent will change the way you hire a real estate agent.
As a client you are considered the “principal” and your realtor’s brokerage is the “agent”. Your real estate agent is working on behalf of the brokerage when they represent you. Within the terms of this relationship, your real estate agent has very specific obligations to you. Your agent has fiduciary duties to you. They owe you confidentiality, total disclosure, and they must follow all your lawful instructions. Furthermore, everything your agent does while under fiduciary duty to you must be to your greatest interest.
The principal/agent relationship is in place to protect you. In most real estate transactions there are two parties involved each of which are made up of principals and an agent. What you have to remember is that, like lawyers, each agent is looking out for the best interest of their own clients.
Let’s take one example to see how agency can play out. Remember that your agent owes you full disclosure? Well, the agent on the other side of the table owes full disclosure to their clients. Let’s say as a buyer you and your partner go into an open house without your agent. While in the open house you exclaim to each other, “we love this house! We’ll take it at any price!” The listing agent is on her phone and seems to be not listening is actually texting her clients telling them everything you just said. At offer night, they keep sending you back for more money because they know you have it. That listing agent is simply executing her duties to her clients. By the way, this isn’t an imaginary story. We have seen this happen.
There are many buyers in the market today who only work with the listing agent in an effort to save on the commission. Unless you have an agreement in writing with the listing agent, that agent is protecting the interests of their seller and they are using everything you say against you to get their client top dollar.
The moral of this story: While you should definitely get along with your agent, it is most important that you trust them to act effectively on your behalf. Most people don’t hire the lawyer or the accountant that they find the nicest. They hire the most effective professional. The same is true for real estate agent.