Real estate agents live a conflicted life. On the one hand, they are salespeople. They only make money when their deal closes.
On the other hand, they are consultants. They advise buyers and sellers throughout the deal process, ideally giving their clients advice that is not influenced by their own financial outcome.
Often, these two objectives are aligned and there is no issue. For example, an agent makes more money if he is able to sell a house for a higher amount. However, there are many situations where the right advice for a client is not aligned with the agent’s monetary incentives.
Most successful real estate agents are true professionals who take the long view. Their advice is in their clients’ best interests. Some agents go further by being fully transparent when conflicts arise (which they often do) and make certain any conflicts are fully disclosed to their clients.
So how do you know your agent is doing the right thing and giving you the best advice? Here are 11 things that selling agents and buyer’s agents should be telling (or asking) you:
Stay Put – From a purely financial perspective, you want to move in life as few times as possible. Let’s face it, moving is expensive. Once you add up the transaction fees, costs of moving, costs to furnish your new place and so on, it’s a lot of money. Further, in the early years of paying off an amortised mortgage, your monthly payment goes mostly to interest. As you hold the mortgage longer, your payments increasingly go to paying principal. Staying put is a great forced savings tool.
More house, more problems – As a buyer, you should try to find the most modest home that will make you (and your family) happy. The larger the home you own, the more expenses and headaches you will have. Whether you are looking to buy a two-bedroom, salt-box house or a 6000-square-foot, five-bedroom home, you should consider whether the house is too big for your current and future needs.
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