Helping newcomers understand benefits of proper representation
There is much for newcomers to know and understand when they are looking to purchase a home in the Houston area. Oftentimes they are moving from out of state or even from outside of the country, where real estate contracts and representation work much differently than they do in Texas.
Thus, it is critical for real estate agents to fully explain representation and how it benefits their relocation home buyers, as it can be confusing to understand who is being represented by whom in a potential real estate transaction.
Texas real estate law requires all real estate license holders to provide the “Texas Real Estate Commission Information About Brokerage Services” form to all prospective buyers, tenants, sellers and landlords. This form explains the different types of representation available.
In Texas, a broker or sales agent can represent a seller/landlord, a buyer/tenant, or act as an intermediary between the parties.
Unfortunately, sometimes home buyers make their own assumptions or act without considering representation.
For example, home buyers don’t necessarily realize that when they call the telephone number on a for sale sign, or walk into an open house, that the agent that they speak with is representing the seller.
“I think that there’s a lot of confusion when buyers call the listing agent,” said Amy Bernstein, president/ broker of Bernstein Realty. “They think that’s the easiest and quickest way to get into the property. Also, the more seasoned buyer sometimes thinks that there is a better deal to be made by working directly with the listing agent, and by not bringing another agent into the transaction, which often is not the case.”
She added that Realtor participation should not be discouraged, and said that her company really encourages home buyers to have representation.
“We are so much of an advocate of this that our office does not allow single-agent intermediary, meaning that we don’t allow the same agent to represent both the buyer and the seller on any transaction,” Bernstein said.
She explained that buyers should always have representation, even and especially when buying a new-construction property. This is something that is often misunderstood by relocation buyers, because they might think that they can get a better deal without an agent, since the builder won’t have to pay an agent’s commission.
“In a new-construction transaction, agent representation is so valuable and important, because the agent will know the right questions to ask, as far as what promotions or incentives the builder is offering, and will be able to compare and contrast what is being offered to the client,” Bernstein said.
In addition, she said that when an agent negotiates on the buyer’s behalf, it ensures that certain items will be included in the price of the home, and reduces the chances of any surprises or hidden costs at the closing table.
Pattie Huey, director, relocation and business development for Better Homes and Gardens Real Estate Gary Greene agreed on the importance of representation for relocation buyers, but added that there is additional value to be gained in working with an agent who has been specifically trained in relocation.
“When an agent is looking for properties for a relocating buyer, it’s a different procedure, because relocation is a very fluid, ongoing process,” Huey said. “Relocation buyers are not just looking for a community and a house, but they are also thinking in terms of future saleability, in a shorter-than-average time period. So, that brings a different opinion about future marketability from the agent, since the life of a relocation is typically two to five years.”
Therefore, Huey said that the agent needs to be well aware of what is happening in an area or neighborhood, and be able to factor in how those things might impact the resale of that property within the next few years.
For instance, Huey said that the agent should know about continued new construction planned in the area, because that would create competition for future resales properties in the neighborhood.
“The agent should also know about businesses moving in or out of the surrounding neighborhoods, and what is happening with commercial properties, and the roads and commute time, because all of these things will affect future marketability,” Huey said.
She added, “A professional relocation agent should also be able to tell a buyer whether they are buying at the peak of the market, the middle of the market, or the bottom of the market in a particular area, because that too will affect future marketability.”
Huey and Bernstein agreed that when representing relocation clients, that it starts with setting expectations. When an agent takes time to do that, it helps the client to better understand the home-buying process, while earning their trust.
Michelle Sandlin is a writer, journalist and global mobility industry expert. Her work is featured in Worldwide ERC’s Mobility magazine, and in business and industry-related publications and corporate blogs. Facebook: www.facebook.com/ TheMichelleSandlin and on Twitter: @ MichelleSandlin. Visit “On the Move” at blog.chron.com/onthemove.