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November 17, 2010

Avoid This Common Home Buying Mistake

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Category: Home Buyers, Real Estate Info


Finding your perfect new home in the Tehachapi area is exciting. Completing the sale often turns out to be less so. We’ll talk about the “completing” part later, for now let’s concentrate on finding the right home for you. So here’s some advice on how to make the process work for you:

What’s the difference between a REALTOR® and a real estate agent?  Why should you care? All REALTORS® (always should be written in all caps with the trademark symbol) are real estate agents but not all agents are REALTORS®.  Real estate agents must pass a state licensing exam in order to practice real estate.  REALTORS® belong to the National Association of REALTORS® (NAR) as well as the California Association of REALTORS® (CAR) (or whatever state is appropriate) and one or more local Associations.

The NAR is essentially a trade association that holds its members to a particular Code of Ethics and enforces any violations of the Code.

It’s the one or more local associations part that is particularly important to you. Another function of the local Associations of REALTORS® is to provide Multiple Listing Services (MLS).  In an area like Tehachapi, it’s not enough to belong just to the Tehachapi Association of REALTORS®, to get full coverage in Kern County, you need to belong to three different Associations.  I do.

Make sure you are working with a REALTOR® that has the ability to access all the properties in your desired area.

Never call the number on the For Sale sign.   That statement will probably annoy most REALTORS®, but there’s a good reason for it.  The agent or agency listed on the for sale sign is working for the seller.  Their primary focus is getting the property sold.  Your primary goal should be purchasing the property you want at the best possible terms.  Can you see how those opposing goals may be best met by two different agents?

Choose a REALTOR® before you even begin to think about specific properties.

Call your REALTOR® first. Any time you find a property that you have the slightest interest in, call your REALTOR® to get any questions you may have answered.  Don’t call the number on the sign because that will indicate to that agent that you are asking to work with them.

Often, a potential buyer will call based on seeing a sign, ask a bunch of questions about the property and then say that they called because they “didn’t want to bother their own agent.”  If your agent would be bothered by your questions and efforts to find the perfect home, then I suggest that you need to find a new REALTOR® that is happy to help you!

Moreover, if you told an agent that you had called another, most will tell you that not only is it unnecessary, but that it is inadvisable.  When you develop a relationship with your REALTOR® he or she wants to be your only point of contact for all things real estate.  Again, if you think that is not true in your case, then I suggest you find a new REALTOR® that is happy to help you!

Why is this true?  The obvious answer is that real estate agents work on commission.  No one wants to give up a commission.  If you have an agent that has shown you thirteen properties and answered your questions about 30 more, but you then agree to have a different agent show you one property which happens to be the one you decide to buy, who is entitled to the commission?  Most people agree that the agent that spent hours researching those 43 properties and drove with you to view 13 of them should be entitled to the commission.  The truth is in the situation above, if you write a contract to purchase with the agent that showed you the last house, all the work the first agent did was wasted.

What if you let the listing agent show you the property but then asked your first agent to write the purchase contract on it?  Isn’t the listing agent entitled to the commission since she showed the property to the purchaser?  This is called procuring cause and figuring out which agent really is the procuring cause in a transaction turns out to be a common subject for arbitration between agents.

Why should you care? Well, here’s the real bottom line.  If you have two agents involved in a transaction where they aren’t entirely sure that they will be getting paid as they would normally expect, do you think that you will get the best possible service in your transaction?

I would love to say that it shouldn’t be that way, but unfortunately it is.  So how do you avoid this common home buying mistake?  When you are thinking about buying your Tehachapi area home, make sure you choose a REALTOR® first.

I would be happy to consult with you to determine how I may be able to assist you in your home buying experience.  You can reach me by phone, text, or email through the Contact page.

Share your comments below.  Let us know what you learned in this article.

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