In my last post I wrote about:
This post assumes you have decided that it’s very beneficial to have an agent working for you. The question is when does a Realtor become an agent?
The Law of Agency Governs Agency Relationships
Are You My Mother is a book about a baby bird who hatches and leaves the nest while Mom is off looking for food and asks whoever he meets if they are his Mother. He doesn’t know his Mother. (Written by P D Eastman of The Cat in The Hat Fame or Green Eggs and Ham – I am sure you remember those).
This is a great analogy in real estate as it’s very common that buyers don’t know the person they are working with when starting out buying homes is already their agent. The horrible thing for us is many of you see us as simple door openers, and that’s because we are not doing the best at getting the general public to understand we are not that at all. Illinois took steps to rectify the lack of understanding a while ago with our written notifications -see below.
The Law of Agency in Illinois is what governs that agency relationship. Buyers must be told in Illinois right from the get go that they have become a client. If they are not to become a client they must also be told that. Here are some examples.
1. You are ready to buy and a Realtor starts to show you property. You are a client, she is already your agent.
2. You go to visit an open house and start talking with the listing agent. The listing agent can answer your questions about the house, at this point you are a customer and she is not your agent.
3. At that open house you express interest in buying it or another property and provide confidential information about your motivation to move. Client/agent.
As you can see it can be a very fine line.
When Should You be Told you are a Client and Why? The Start of The Agency Relationship.
Using the same three examples.
1. Before any agent in Illinois shows you any property you will be given two written notifications. One is of “Designated Agency” and this is to tell you that you are now a client and the Realtor is now your agent and who she works for. (Her brokerage). The second is to let you know what the agent has to do and what you, the buyer, should do. This is not a written binding contract, it’s a notification and because of that you are not required to sign the documents.
2. Visiting open houses does not create an instant agency relationship. However it’s important for you to know that at this point the listing agent is working for the seller and will use every piece of information at their disposal to help the seller. So potential buyers should keep their mouths zipped very tight about anything confidential. It could put you at a disadvantage. If you engage in a conversation with the listing agent you should at least be told she is working for the seller and not you. (She can become your agent but for now you don’t have one).
3. Now you’ve expressed an interest in buying you’ll start to talk about things related to buying the property. Do you have a property to sell, are you financed to buy, do you have a time frame and so on. None of this should be talked about until you agree to the listing agent becoming your agent, or not at all if you intend to go and get your own separate agent (My recommendation!)
Pick Your Mother
I’ve said this before, I believe every buyer should have an agent to represent them in a real estate purchase.
Time to Pick your agent. Let’s face it none of us could pick our Mother! A good personality fit will result in a good relationship. So talk to a few, find one you like and stick with them.
Finally why is it very important you understand why having your own agent is the best way to buy real estate.
Consider that a seller wants to sell on the very best terms he can. To suit his time frame-usually quickly, for the most amount of money and the best terms imaginable. Now you come along to an open house and tell his agent that you are desperate to find a house as your lease ends in 14 days and you’ve got nowhere to live. Do you think he is going to take pity on you and drop his price? NO WAY! He has information that could help him drive that price up and get more out of you because of your situation.
Having your own agent would have put a wall between you and the seller, we know to keep that kind of information to ourselves. A listing agent is not a wall because she’s working for the seller.
Remember buyer agency representation starts very early for buyers, likely far earlier than you realized. Although in most cases it starts with looking at homes, if you have an interview to select an agent, some of your conversation may trigger and agent/client relationship. If you are not sure what to say and what not to say, my advise is to say nothing! Other than Will You Be My Mother.
Call us if you need a buyers agent. We can be reached at 847-363-3686.