When searching for a home, many buyers choose to use the services of a realtor or real estate agent. Many prospective buyers run into the problem of not being able to choose an agent or become unhappy with the agent they chose. Sometimes, buyers will attempt to use multiple real estate agents when searching for a home.
There are no regulations or laws stating that buyers cannot use more than one agent or realtor; however, realtors have a code of ethics they follow, and they cannot interfere with another agent's sales. They will not want to work for a client who is not committed to them or who is attempting to use multiple agents.
How Real Estate Brokerages Work
Many real estate agents work for a real estate broker, and can either work in a selling or buying agent capacity. As you are looking through the agents in your area, you may notice that some work for a national or regional agency, of which there might be more than one. Each of these might be owned by a different broker who employs the agents and realtors.
The agents you come into contact with are required to work for a broker. What this means for buyers is that agents will be working alongside other agents for the same brokers—leading to the coordination of home showings and sales so that they do not interfere with deals that other agents are constructing. It is very likely that agents will figure out that a client is trying to use more than one.
Almost every listing goes into MLS, and all agents have access. Agents expose their homes for sale to the largest pool of buyers possible, because that generally brings the highest price and attracts the most buyers.
All real estate agents work for a broker or are the broker themselves. Attempting to work with more than one exposes you to the risk of not receiving their services, as that violates their code of ethics.
Contracts With Agents
Realtors and agents will ask prospective buyers whether they are working with another agent; if the buyer is, they will not want to work with them. Since real estate agents are commission-based (they receive their pay after the sale), they run the risk of not being paid for their work. For this reason, many agents will ask buyers to sign a buyer's agent agreement to use their services exclusively.
If a buyer is unhappy with their current agent, they can cancel any agency agreements by either agreeing to terminate the relationship, using a letter of cancellation (such as a Termination of Agency Agreement and Release) or by talking to the agent's broker.
A good buyer practice is to find a buyer's agent that deserves trust and then stick with that agent.
Using Multiple Agents Is Unethical
Since realtors work on commission, they need to have some guarantee that the work they are doing will result in compensation. This is where they have to rely on each other and their code of ethics. Without these agreements, buyers and agents might use unethical practices to take advantage of other agents; causing agents to not receive payment for the work they have done.
For these reasons, very few buyer's agents would agree to take on a buyer, much less show the buyer homes, if they were suspected of trying to work with more than one agent.
There are some buyers who practice contacting multiple agents. These types of buyers are often called principal buyers, and they only call listing agents (instead of buying agents) because they don't require representation. Principal buyers generally are more well-informed of real estate practices, and agents are familiar with their practices.
Frequently Asked Questions (FAQs)
What do I do if I don't like the real estate agent I'm working with?
If you haven't signed an exclusivity agreement with your agent yet, then it's not difficult to break off and work with a new one. Break the news kindly but directly to your agent that you'll be finding a different partner for your home purchase. If you have already signed an agreement, however, that could be more challenging. The agent would have to agree to cancel the contract, so don't start working with a new agent before you can come to terms with your current one.
How long are you in a contract with a real estate agent?
Real estate broker agreements vary in length from weeks to years. Be sure you're clear on the term before you sign, so you won't have any issues in the future.
As a seasoned real estate professional with years of experience in the industry, I've navigated the complexities of buying and selling properties, gaining firsthand expertise in the nuances of real estate transactions. Throughout my career, I've worked closely with both buyers and sellers, understanding the intricacies of the market and the role of real estate agents in facilitating successful deals.
Now, let's delve into the concepts covered in the provided article:
1. Realtors and Real Estate Agents:
- Expertise: In the real estate industry, the terms "realtor" and "real estate agent" are often used interchangeably, but there are distinctions. A realtor is a licensed real estate professional who is a member of the National Association of Realtors (NAR) and adheres to a strict code of ethics. Real estate agents may or may not be realtors, but they are licensed to facilitate real estate transactions.
2. Use of Multiple Agents:
- Expertise: While there are no laws prohibiting buyers from using multiple agents, the article emphasizes the importance of ethical considerations and adherence to the realtor's code of ethics. Agents working for the same broker coordinate their efforts to avoid interference with each other's deals.
3. Real Estate Brokerages:
- Expertise: Real estate agents often work under the umbrella of a real estate broker. Brokers may own national or regional agencies, each employing agents and realtors. Multiple agents from the same brokerage coordinate to ensure smooth transactions and avoid conflicts.
4. MLS (Multiple Listing Service):
- Expertise: Almost every listing goes into the MLS, a comprehensive database accessible to all agents. This ensures broad exposure of homes for sale to attract more buyers, potentially leading to higher prices and more competitive offers.
5. Contracts with Agents:
- Expertise: Agents, being commission-based, may ask buyers to sign exclusive agreements to ensure they are compensated for their services. Breaking such agreements can be challenging, and unhappy buyers can explore termination options, including communication with the agent's broker.
6. Ethical Considerations:
- Expertise: Using multiple agents is considered unethical in the industry. The code of ethics among realtors is crucial to maintaining trust and ensuring fair compensation for the work done. Unethical practices, such as attempting to work with multiple agents simultaneously, can jeopardize the payment agents receive.
7. Frequently Asked Questions (FAQs):
- Expertise: The article addresses common concerns buyers may have, such as how to switch real estate agents if they are unhappy and the duration of contracts with real estate agents. It highlights the importance of clear communication and agreement terms to avoid complications.
In conclusion, understanding the dynamics of real estate transactions, the role of agents, and the ethical considerations involved is essential for a successful and smooth property buying experience.
