Choosing a real estate agent to help you buying a property can be sometimes a very confusing and tricky decision to make especially for a first time home buyers/investor. Let’s dig into details which may help you know everything about a real estate agent.
So who is an agent? In simple words he is the one who plays the role of a facilitator for property transactions between buyer and seller. And for this a buyer and in some cases sellers too have to pay the commission. But no, there is much more to that.
Real estate agents are experts in local real estate. They monitor the market daily and are well versed with current housing trends in terms of inventory, prices, location, and so on. Thus, can let you know about the availability in your budget and also takes you to see the sites.
A broker can help you make a best purchase of your life and even can market the dead property in terms of price appreciation. Be vigilant in choosing one. Before we come to how to choose a good broker for yourself, we should first know kind of brokers present in the market.
Different types of brokers: Despite, most of us know their role in selling and purchasing a property, there are many who still deal with how to choose one and what kinds of them are operating in the market.
Seller's Agent: He/she is also known as a listing agent who works only for the seller.
He/she list the property on behalf of the seller and if the transaction is made possible, a commission (the percentage of the commission is dependent upon the agreement with the seller and the agent) is what they earn.
Buyer's Agent: A buyer's agent works solely for the buyer and will and should make sure the buyer's interests throughout the real estate transaction. Starting from initial house hunting till the deal is closed.
Dual Agent: He works for buyer and seller both. This is a single agent who represents the seller and the buyer at one point of time which means in the same transaction.
Joint Agent: One - or two or more agents jointly instructed by a seller or a buyer. In this, all they are entitled for the remuneration in a proportion as agreed by the person who have hired them. They get paid even if they have introduced you to the buyers/seller.
Since they are on remuneration, if the transactions takes place and deal gets matured, none of these agents would be entitled to a commission.
Joint sole agent: If buyer/seller appoint two estate agents to act together for property transaction/buying or selling, this is known as ‘joint sole agency’. In this case, you have to pay the commission to them once the deal is matured. The agent that actually finds the buyer usually gets a higher portion out of the total commission. But this percentage share is required to be agreed at the start of the contract between owner and both the agents.
How much brokerage should an authentic a real estate agent charge?
If you are planning to buy property from an agent/ broker, then you have to pay 0.5 to 2 per cent of the deal value. In lease transactions, the brokerage value is one month’s rental or 8.33 per cent of the deal.
Tips to consider while looking for a real estate broker:
- Find out as much as possible about the agent before hiring his services. Ask for references. Also, ask family and friends to recommend real estate agents they have worked with.
- Check if the agent is licensed and can work full-time on your real estate needs.
- Ensure that all agreements between your agent and you are in writing.
- Do not pay money upfront to your real estate agent. This could be a loss to you if you don’t buy or sell a property with this agent.