June 2018 Housing Market Update: Prices at or near all-time highs in Washington D.C. and Baltimore Metro areas. Inventories continue their unrelenting decline, days on market at or near record.
How To Spot A Bad Real Estate Agent In 20 Minutes Or Less
Have you met with a Maryland real estate agent who did not provide you with the form “Understanding Whom Real Estate Agents Represent” prior to or in that meeting? Then you met with a bad real estate agent.
This month I met with three unhappy buyers and they were all unhappy in pretty much the same way. They had been working with an agent who wasn’t sending them listings that matched what they were looking for, who didn’t schedule visits to the homes in a timely way, and the agent expected them to do the legwork of going to open houses. The buyers were searching online to find the houses for themselves because the agent wasn’t sending them all the relevant listings, they lost out on homes because they went under contract before they could see them and they had lost out on offers on houses they loved because they didn’t get good advice about what offer to make.
In each case the agent was a friend of a friend or of a family member so they felt bad about firing them. They were upset they’d spent so much wasted time, but they felt bad about changing agents because they were recommended by someone they knew and the agent had already worked with them for several months. Referrals can be a great way to find a service provider, but not if the referral is simply “I have a friend who is an agent”.
In my meetings with these buyers I discussed buyer agency and showed them the agency disclosure form “Understanding Whom Agents Represent” and let them know that an agent is required to have a signed buyer agency agreement in order to represent the buyer rather than the seller. This was the first these buyers had seen or heard any of this.
In Maryland, if a real estate agent does not have a written agreement with a buyer, that agent is representing the sellers for every property they show – even ones that are listed with a different company. All agents represent the sellers unless they have a written buyer agency agreement. Also, real estate agents are required to provide the agency disclosure forms in their first meeting with someone. The first sentence of the disclosure says that! Yet not one of these buyers had seen the agency disclosure forms or had a discussion with the previous agent about buyer agency in the course of several months of futile home shopping!
Can a real estate agent who ignores something as fundamental as providing required disclosures and ignores Maryland law regarding who their client is possibly get the rest of their responsibilities right? No, hard stop. If an agent gives a buyer the impression that they are representing the buyer when their legal obligation is to represent the seller, that agent is engaging in borderline fraud against the buyer and the seller. If they counsel the buyer to make an offer that is lower than the asking price or on terms that are not favorable to the seller, the agent is in violation of their obligation to their client – the seller. If an agent gets this wrong at the start, everything they do after is wrong.
Discussing agency relationships and providing required disclosures isn’t as fun as going out right away and seeing homes, but don’t work with an agent who skips this step. Discussing agency isn’t proof an agent is a great agent, but not discussing it is sure proof of a bad agent.
Charles Chapman has more than 20 years' experience in the Montgomery County real estate market. He has been a full-time agent through rising markets and good times, and also through falling markets an....
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