It's important that you understand how agents work - what you don't know CAN hurt you!
"Unless the agent has a buyer's agreement with you, the agent may be working as a sub-agent of the seller and obligated to get the highest price for the seller." - CNN Money
"Buyers average a 5% Savings when represented by a Buyer's Agent rather than a Sales Agent." - Money Magazine
"...commission is paid out of the money the seller gets from the sale. Even though the buyer's agent works exclusively for the buyer, the buyer doesn't have to pay him or her a cent." - Practical Money Skills For Life
"A real estate broker doesn't work for you, but for the seller. If you want someone on your side, get a Buyer's Agent." - Reader's Digest
Actually, it is usually just the opposite! In Wisconsin, agents that use the MLS (Multiple Listing Service)agree to represent the seller of homes that they show, unless the agent has a Buyer Agency contract with the buyer. Think of a sales clerk in a shoe store. Although the clerk is helping you find the shoes, ultimately, you know that the clerk works for the store, not for you.
"Real estate agents are all Realtors"
To be a Realtor, a real estate agent must join the Board of Realtors, pay the dues and agree to abide by the Realtor Code of Ethics. If an agent does not join, they may not be held to the same standards as a Realtor. And not all Realtors are Accredited Buyer Representative (ABR) designated.
"I can't tell my agent any confidential information, because they'll tell the seller."
This is a common misconception. Because of national news articles published in local papers, Wisconsin buyers think things are the same here. Fortunately, Wisconsin passed very specific laws regarding confidentiality. A broker is required to maintain the confidentiality of all information given to the broker in confidence and all information obtained by the broker that he or she knows a reasonable party would want to be kept confidential, unless the information is required to be disclosed by law. Agents in Wisconsin are required to have all customers and clients sign a Disclosure of Real Estate Agency at their first significant meeting.*
"If I hire Buyer's Agent then I have to pay them."
Buyers Agent's are usually paid the same way as non-buyer agents are paid - the listing agent offers a share of their commission to the agent that brings in the buyer. If it is a For Sale By Owner property, the agent's fee, typically 2.4% of the purchase price, can be written into the offer and paid by the seller.
"Real estate agents get paid like everyone else AND make 6% or more on every deal."
We wish! Minimum commissions are different in every company and a common belief is that the agent keeps it all. Let's say that a seller lists for 6%. The company agrees to pay the buyer's broker 2.4% and keeps the rest. Then the companies split that with their agents. The average agent gets 1.2% to 1.5% of the sale price. If an agent sells $1 million in real estate in a year, the average income is $13,000. From that, they have to deduct income taxes, social security taxes, errors & omissions insurance, travel expenses, advertizing expenses, Board of Realtors and MLS fees, health insurance, etc.
Another problem is that agents only get paid if they are the reason the buyer buys the property. That means that they have to be the one to show the property. This is called "Procuring cause." Many people think they can see the property at an open house or with any agent and "their" agent will still get paid by the company or by writing the offer for them. Unfortunately, once they saw the property with that other agent, they gave THAT agent procuring cause. Their agent is now out of the loop. Keep in mind, agents don't make any money until the transaction closes. Until then, they are working for free!
*Section 452.14(3)(i) of the Wisconsin Statutes requires that brokers provide a written agency disclosure form containing a disclosure of duties owed to all parties, the duties owed to a broker's client, a statement regarding confidentiality and a statement of which party(ies) the broker represents, before providing brokerage services to a party. This form is being provided to comply with that requirement.
"As a first time home buyer, I had many questions and concerns regarding my purchase. Kristin's expert knowledge, professionalism and patience were a great comfort to me during this process. I felt much more confident in the transaction because I knew that Kristin would protect my interests in the negotiations. I would highly recommend her to friends and associates, and in fact, I already have. Not only do I have a new home, I also have a new friend." - Laurie H., Riverwest
