What will a Realtor do for you?

When you choose to work with a real estate licensee, he or she may or may not be "your" agent. An agent owes certain duties to a client but has a different obligation to a customer. You must know whether you are a customer or a client in a real estate transaction, and it is your decision as to how you will work with the licensee. 

You should discuss the following information with the real estate licensee with whom you are working in order to make an informed decision.

For Buyers Only: What Your Realtor Does For You

Most people who buy a home rely on the assistance of a real estate agent. Many of those homebuyers believe their agent knows everything about real estate, from how much they should pay for their home to whether that home has termites. Good real estate agents do know a lot, but they don't know everything.

Real estate standards of practice are regulated by federal, state, and local laws. And any agent who is a member of the National Association of Realtors (i.e., a "Realtor") must comply with N.A.R.'s Code of Ethics. Beyond that, how much your real estate agent knows is a function of his or her training and experience. Here's a rough idea of what agents do and know in the areas of house-hunting, price negotiation, zoning, and inspections.

It may seem obvious, but what agents do best is help you find a home you want to purchase. The process includes searching the Multiple Listings Service (MLS), previewing and pre-screening homes, and conducting home showings for you.

If you sign an exclusive buyer's agent agreement, the agent will go beyond the MLS and search among new housing developments and for-sale-by-owner (FSBO) homes. But if you don't sign an agreement, the agent will be reluctant to show you homes that aren't in the MLS for two separate reasons. "One, if it isn't clear as to who they are serving, they can be in trouble with the laws and ethics of the state they're operating in, and two, they may not get paid," says Ron Schmaedick, associate broker with Realty Executives in Eugene, Ore.

Once you've located a home you'd like to buy, you'll want your agent to help you negotiate the purchase price. How much assistance you can expect to receive depends in part on whether the agent who found the home is representing you or is actually representing the seller. That's not as easy to determine as it might seem, so you should ask your agent about agency relationships.

"If the Realtor is the buyer's agent, they have a fiduciary responsibility to do the best they can to get the very best price and terms for you," Schmaedick says. "You can ask your buyer's agent to do a market analysis and show you what comparable properties are being sold for in the marketplace." An agent also can tell you what amenities in the home might make it more valuable than comparable homes on the market.

Your agent won't be able to tell you exactly how much you should pay for a particular home. Each buyer has unique needs and wants, and you are the only person who can decide how much a home is worth to you. "You are buying amenities that sometimes are `priceless.' If someone needs to be able to walk to work and there is a house that fits that person, it might be worth a few more dollars to them than it would be worth to anybody else," Schmaedick says. "The agent can tell you what other people might pay for it or what's happening with similar houses in that neighborhood, but you're the final judge."

Another area where you are the final judge is zoning. Many agents have basic knowledge about local zoning, but they aren't experts. If you need a property with a specific type of zoning, an agent can do some preliminary searching, but you'll need to ask local authorities whether the property is zoned for your specific intended use. "Sometimes, you can have a wood shop in your garage and sell kitchen cabinets out of it, but the day you hire someone, you've broken the [zoning] ordinance. There are things like that which sometimes the agent isn't aware of," Schmaedick says. Make your purchase contingent on the zoning being appropriate for the intended use, then check with the local authorities.

Matters are similar when it comes to Inspections. "The Realtor will generally know what inspections are common to the area. In some areas of the East Coast, radon is a big issue. In California, termite infestation is a big issue. In our area, dry rot and roof conditions are big issues," Schmaedick says. An agent also can tell you the cost of various inspections and recommend inspectors you may want to hire.

However, few agents are qualified to tell you specifically which inspections you must have or interpret the results of an inspection. And agents aren't mind-readers. Your agent can't advise you about inspections or other matters if you don't tell him or her your concerns. "The biggest misconception is that the Realtor is going to be the expert on all matters," Schmaedick concludes. The moral is: When in doubt, ask your agent to direct you to the source of the information, then investigate it yourself. 


Written by Marcie Geffner