Who's Your Agent? Part I

Who's your agent? That should be an easy question, right? Most people would answer with, "It's the guy driving me around showing me houses." Maybe. Maybe not.  The rules of agency make a seemingly easy question complicated. But never fear, I am here to clear it all up for you. This will be a multi part series because, well, it is a complicated subject, so those of you who are here to see what colors I'm painting my walls will just have to wait.

The North Carolina Real Estate Commission asks more questions about agency on the real estate exam than anything else, which means not understanding it is the downfall of many REALTOR wanna-be's .  It is ironic then, that they expect real estate agents to explain the rules of agency to any potential client in just a few minutes when only about 40% of the students who have a professional instructor in a 75 hour course can get it.

This brings us to the North Carolina Working with Real Estate Agents brochure.  This page turner must be presented and explained to any potential client at the first substantial meeting. What the heck does first substantial meeting mean? Basically this means that it should be presented before personal details concerning the buying or selling of real estate are discussed. Personal details include salary, motivations for buying or selling, the amount you are willing to pay for a property you want to buy or the amount you are willing to take for a property you are selling.

So it is okay to say, "I'd like to buy a house between $150,000 and $200,000." But you should not say to a real estate agent you do not have an agency agreement with,"OMG! This is the best house ever! I would pay $10,000 over asking price if that's what I have to do to get it."

Think of this brochure as your Miranda Rights. As we all know - hopefully from watching countless police shows and not personal experience - the first thing a police officer does after arresting a suspect is read him his Miranda Rights. The first of those rights is your right to remain silent, which you should do because anything you say can and will be used against you. The same holds true of any personal information you give to someone who is not your agent. When it comes to real estate, you should always assume anyone you are talking to is not your agent until you have made an agency agreement with him.

After an agent goes over the brochure with you, she will ask you to sign it. THIS IS NOT A CONTRACT! Your signature just shows the Real Estate Commission that the agent went over the brochure, so sign away.

In the next post we will start to talk about the forms of agency, but I want to say one other thing about the brochure. Personally, I think you can judge to quality of real estate agent by when she presents this brochure to you. She should go over it with you at the beginning of your relationship. I believe if she waits until you are about to sign a listing contract or an offer to purchase, she has not done her job correctly, and she may not have your best interests at heart.