Buying or selling a home is a difficult and complex procedure, but one that ultimately should end with all parties getting what they want. However, if you have a tumultuous relationship with your real estate broker, it can poison an otherwise happy occasion.
In fact, some buyers and sellers can get so upset with their brokers that they actually try to deprive them of their fees. That's a worst-case scenario, of course, but one in which too many people find themselves. You don't need to be best friends with your agent in order to successfully sell or buy a home, but at the very least, the relationship should be functional, and like all relationships, it is often a matter of chemistry.
"Most importantly, there needs to be an open line of communication," says Pat Vredevoogd, a broker with AJS Realty in Grand Rapids, Mich. "Depending upon whether or not it's a seller's market, a realtor needs to be someone who can keep you informed of new houses as they become available, and someone who has got your best interests in mind."
The legal relationship between a realtor and a homebuyer isn't as straightforward as it appears. Each state has different laws governing the relationship between an agent and a buyer or seller, and in some states, it may not be a legal contract, but more of an accepted code of conduct. The client-Realtor relationship is especially problematic in situations where the broker is representing both the buyer and the seller in a transaction because there may be a conflict of interest. In some states, agents may get around it if they serve as a transactional broker, whose allegiance is neither to the buyer nor the seller, and therefore, transactional brokers are not legally obligated to keep confidential anything the buyer or seller tells them.
"You need to know who the realtor is working for," says Bill Powers, chief operating officer of Realty Executives International in Phoenix, Ariz. "If a realtor has an open house and someone walks in and says they want that agent to represent him or her in the purchase of the house, the buyer needs to know that the loyalty of the agent has already been pledged to the seller. Good realtors will tell you immediately who they represent, and may recommend someone else to the buyer, or offer to represent the potential buyer if they want to buy another house."
The realtor also has just as much of a right to part ways with a home buyer as you do to leave your realtor. Sometimes, it's the brokers who find relationships with their clients unsatisfying and break it off with a homebuyer or seller.
"I've only fired a client twice in 20-something years," says Allyson Bernard, owner of Real Estate Professionals of Connecticut, in Danbury, Conn. "It's a relationship, and if you don't have honesty and chemistry, it's hard for anyone to reach their goals.
So what justifies a breakup with a broker? Sometimes home buyers feel their agents aren't showing them appropriate properties; sometimes home sellers feel they aren't asking enough for their home or aren't getting the right exposure. In either case, Bernard says the best way to approach a realtor who isn't giving you exactly what you want is in writing.
Sometimes the reason for breaking up with a broker is purely financial: If the offers coming in are well below a seller's expectations, or if a seller's home languishes on the market too long, it begins to stale and seller's only course of action is to pull it from the market and give it some time before relisting it again later.
One of the main reasons why a property may languish is because it was improperly priced by the broker, assuming a higher value than the market will bear. While many homeowners may be initially thrilled that their home could be worth more than they had thought, they should be warned against being too greedy. An improperly priced house may turn off buyers, and the seller will be disappointed when they inevitably have to lower the asking price. That is why it is best to meet with a number of different brokers prior to signing with one, and ask them to not only price your home but also to provide comparable listings for other recently sold properties in your area.
One thing that prospective buyers and sellers should do is read the fine print. Often the agent will hand you a form during an initial meeting stating that they will act as sole representative in any real estate transaction for a predetermined number of months. It is wise to read this form carefully and refrain from signing it if the conditions don't make you comfortable.
Bear in mind, as with many failed relationships, some brokers won't disappear quietly. If a buyer that your ex-broker originally introduced to you ends up buying your house, the broker is still entitled to the commission.
"Before I even take someone in my car to show them houses, I sit down with them for an hour and a half and go over what their goals are, what they expect from me, and I go through the process and show them the paperwork so that nothing is a surprise," Bernard says. "If a buyer or seller feels a relationship isn't working, they should put their concerns in writing and confront the broker or agent, just as I would do with a client."
Brokers should have some plan of attack whether you are buying or selling--although for selling it's especially important. Ask the realtor how he or she plans to market the house, and what sort of price realistically can be fetched for it.
Also, according to Powers, friends and real estate don't always mix. Even if you have a good friend, whom you trust implicitly, it's not always advisable to use them as a realtor.
"Friends often expect you to provide above and beyond the normal, and if anything goes wrong, your friendship is in jeopardy. I've always told myself that in the same way you shouldn't lend money to a friend you can't afford to write off, if I'm working with a friend, the commission has to be secondary to their needs," Powers says.