You spend weeks together driving from house to house, talking about plans for the future. You and your real estate agent become friends.
Well, being friendly is fine, but don’t open up too much. Your real estate agent is in business, and the agent’s interests aren’t always the same as yours.
Whether you are a buyer or a seller, follow some basic guidelines in dealing with the agent.
Most important, remember that because the agent is paid by commission, he or she has a financial incentive to get a deal done, even at a price that may not be the best you could get. Urging the seller to take a lower price, or the buyer to pay more, improves the prospects of closing the deal, freeing the agent to move on to the next one.
Agents usually play the role of middleman in negotiations. Typically, the buyer makes a written offer based on the agent’s advice. The agent delivers the offer to the seller’s agent, who passes it to the seller, along with comments about whether the offer is worth accepting or countering.
Buyer and seller don’t know exactly what their agents say to one another. But, clearly, both agents want to see a deal go through. If you are a buyer and your agent comes back and says the seller probably will drop his price a bit more, you can assume the two agents have been sending each other signals.
So remember: Don’t tell your agent anything you don’t want the other party, the buyer or seller, to know. That means you should not tell your agent your final price, which is the most you’ll pay as a buyer or least you’ll take as a seller.
Keep a poker face. As a buyer, don’t make statements like, “This house is perfect! I’ve got to have it!” A seller should not tell the agent, “If this deal doesn’t go through I’ll drop the price another $20,000.” Leave your agent thinking you can live without this deal.
At the same time, be sure your agent knows you are serious about getting a deal done, or else the agent may move you down her priority list. If you display a knowledge of mortgage rates and recent prices in the neighborhoods you are looking at, the agent will know you’re a serious customer who can’t be pushed into a bad deal.
You can reinforce your credibility if you can walk in the agent’s door with a opener like, “Hey, I just saw that J.P.Morgan Chase (Stock Quote: JPM) and Wells Fargo (Stock Quote: WFC) dropped their rates.”
Finally, remember that your deal with the agent is negotiable. The seller’s agent may want a listing agreement giving him the exclusive right to represent you for six months or longer. It might be better to start with 30 or 60 days, then extend if you’re satisfied the agent is really hustling.
The commission is also negotiable. While 6 percent of the sales price is common, the seller can offer less.
But remember that the commission is the agent’s incentive to work hard. It’s fair to stipulate that you’d pay only half the commission if you come up with a buyer without the agent’s help, such as a neighbor or relative who had expressed interest in your property before the agent was on board.
Use the BankingMyWay.com search tool to keep abreast of mortgage rates. With the various mortgage calculators, you can figure monthly payments with various interest rates and loan amounts. Whether you are a buyer or a seller, that will tell you if a home is affordable at a given price.
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