In case you missed the previous steps in my How To Buy Your First Home series:
Read on, and if you have any questions, let’s grab a coffee (or iced tea if you’re like me and don’t drink coffee) and we can gab about the process of buying your first home.
Step 5: Pick Your Side Kick
If you haven’t done so already, now would be a good time to pick a real estate agent to assist you through the process of finding and purchasing your new home. It can be a jungle out there, so it's best to have a trusty guide to help navigate you through the process.
Do you really need a real estate agent’s help?
You’ve been visiting open houses every weekend for the past couple of months, religiously checking out realtor.ca, and now are starting to get serious about finding “The One.” Does this sound like you?
While it may be tempting to go it alone, you have nothing to lose by getting assistance from a skilled and knowledgeable real estate agent to help with your home search. As outlined in Step 3: Calculate the Costs of Buying Your Home, when assisting you in the purchase of your home a real estate agent’s services are typically free of charge.
So why not use our neighbourhood knowledge, savvy negotiation skills, and guidance in submitting an offer to help you get your dream home?
How to pick your real estate agent
Ideally you want to work with a real estate agent who you actually enjoy being around - someone who has a personality that meshes well with yours. You will be spending quite a bit of time with this person and you should feel comfortable going to them with any questions during the house hunting process. So here are some suggestions to help you pick the right agent for you.
- Pick an agent who knows the area you are looking to buy in. Picking a Cambridge agent to help you buy a home in Toronto is a bad idea. Each market has it's own intricacies and you want to be working with an agent who knows that area specifically.
- Don’t be afraid to interview a couple different agents to determine who you get the best vibe from and who you will enjoy working with the most.
- Pick a full time real estate agent, not someone who works an office job from 9-5 and will only be able to work for you on evenings and weekends.
- Your agent should be up to date on market trends and stats. They should be in the loop on what’s going on in the local market so that they can keep you in the loop too.
- Make sure to hire an agent who will be available to assist you. If your agent likes to go to the cottage every weekend and that’s the most convenient time for you to look at properties, you’re going to be left feeling stranded. Similarly, if it’s easy for you to communicate by e-mail but you are working with an agent who “doesn’t do e-mail”, that’s going to get old real quick.
- If you would like to get to know me a bit better and see if I can be of assistance to you, feel free to contact me and we can meet up. Prefer to make sure I don't bite before meeting me in person? Check out my About Karly page. (P.S. I promise I don't bite, and I will even treat you to coffee.)
What is a Buyer Representation Agreement and should I sign one?
The Buyer Representation Agreement (BRA) is a contract that a real estate agent and an individual looking to buy a home can sign to formally outline their commitment to work together to find the buyer a home. The contract is for a specific time period (can be as short as a day or several months in duration) and for a specific location (can be for a specific property only or for several cities). Once you have signed a Buyer Representation Agreement with a specific agent, you are legally committed to working with them for the duration of the contract and in the locations specified.
My thoughts on the Buyer Representation Agreement
The Buyer Representation Agreement seems to have gotten a bad reputation. Here's how I think it happened:
- Buyers view it as a tool agents use to "lock them in" to work with that specific agent only. When a buyer has only just met a real estate agent, how are they to know whether they want to commit to work with that specific agent exclusively for the next three months?
- Real estate agents aren't always great at explaining the BRA and why it actually benefits the buyer to have an agreement signed that formally outlines the agent's legal requirement to protect your best interests when representing you.
- Buyers fear signing the BRA and then discovering they have a dud for an agent. Let's say you meet this agent at an open house and they make you sign a BRA the first time they take you out to look at properties. What happens if you discover that that agent is not your cup of tea? What if that agent is consistently not available to show you homes when you are available? Are you stuck being committed to someone you no longer want to work with?
While you are under contract with this one agent, legally you cannot work with any other agent. You can wait it out and let the contract expire. Or you always have the option to terminate the BRA if you really feel like you no longer want to work with that agent.
So why do some agents try to force buyers to sign Buyer Representation Agreements?
The plain truth of the matter is that real estate agents only get paid when they sell a property. Real estate agents don’t get paid to do showings, to do open houses, to research properties, to type up offers, to negotiate a good purchase price for you, etc. We get paid when we sell a property, which is ultimately a result of all the activities I just mentioned.
If a real estate agent is researching and previewing properties for you, showing you homes, giving you market updates, providing advice on submitting an offer, preparing and negotiating that offer, handling all the details around you taking ownership of your new home, and ultimately sharing their expertise with you, they want to get paid for it. Can you blame us?
So unfortunately many agents view the Buyer Representation Agreement as a tool to lock buyer clients into working with them and guaranteeing that when the client does decide to buy, the agent will get paid for it.
I don’t love the idea of forcing someone to be committed to me that doesn’t want to be. So I try to take a different approach.
How I handle the Buyer Representation Agreement
I will never ask a buyer to sign a Buyer Representation Agreement until we have been out to see some properties together and I feel like that buyer has gotten a chance to feel me out and I have gotten a chance to do the same. Do they like me? Do they understand the value of working with me? Do I like them?
The contract binds two parties – the agent and the buyer. So both parties have to want to work together.
I prefer to build the trust of my clients first before ever approaching the conversation. How do they know if they want to commit to working with me if they don’t know who I am and my integrity yet?
Once the rapport and trust has been established, I sit down with my buyer clients and go through the Buyer Representation Agreement in detail, answer any questions they may have and they realize that having a signed BRA is actually a good thing!
Make sure you really like your real estate agent, are confident in his/her abilities, and know they will work hard for you before you sign a BRA. But when you meet an agent who possesses these qualities you would be wise to sign a BRA. It means that that agent is legally committed to representing your interests. It’s a serious commitment and one that real estate agents do not take lightly.
Up next - Step 6: Let The House Hunting Begin
Do you have questions about the home buying process? That's what I'm here for! Drop me an e-mail or give me a call and I'd be happy to help.