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Is Your Real Estate Agent A Spy?

The real estate agent, unless specifically contracted as a buyer's agent, is working for the seller. Buyers usually know this, but they don't think it matters, as long as the agent is helpful. While true to an extent, buyers don't realize that an agent has a real legal responsibility to, and loyalty to the best interests of the seller. It is referred to as a fiduciary responsibility, but what does this mean?

A Real Estate Agent Is A Spy

Let's suppose you make an offer on a home, and mention that if the seller says no, you'll probably offer ,000 more. The sales agent now has an obligation to tell the seller what you said. That's an expensive comment, isn't it? An agent may spend all his time with you, showing you houses and helping you write offers, but his allegiance is legally with the seller, unless he is hired by you.

An agent, even if she is a seller's agent, can be a great help when you are buying, but remember that she is a sales-person, and you're not the boss. Be careful what you say, and be careful with anything she says. You may want to work with a buyer's agent. In that case the agent can work for YOUR best interests, but even here remember that she will usually get paid only when you buy something, so her objectivity is suspect.

Some real estate agents work under "dual-agency" rules, meaning they're supposed to work for both the buyer's and seller's interests. Of course, they only get paid when a property is sold, so they may be more helpful to the sellers. In any case, how can someone really be on both sides of a negotiation? It is probable they'll work harder for whoever they like more. Do you want a popularity contest that can cost you thousands of dollars?

Things Real Estate Agents Won't Tell You

An agent will often let you assume things, to get the sale closed. They'll tell you that the seller and buyer always split the closing fee, for example, or let you assume it. They'll say they can't change the commission after it has been set. They'll say you have to write a big check for a "good faith" deposit when you make an offer.

I've seen realtors take ,000 off a commission to get a sale closed at a lower price. I've seen the buyer or the seller pay the entire closing fee. Buyers sometimes put less than 00 down as a deposit with an offer, and sometimes nothing - agreeing to deposit something when the offer is accepted. Little is set in stone when it comes to real estate.

Don't think real estate agents are all experts. My first time making an offer on a house, the agent didn't understand when I told him that I wanted to get a 90% first mortgage and have the seller carry a second for 5%, so I could get in with only 5% down. Many years into his career, he still had only dealt with conventional deals.

What do you look for in an agent when you are a buyer? Agents will often be knowledgeable about a certain type of real estate, or a certain neighborhood, but know little else. Just like other professionals, they specialize, so when you want to find a particular type of property, look through listings online until you find a real estate agent that already has several of that type listed.

About the Author: Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for ,500, visit

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