Real Estate Agency

The next few blogs will focus on agents, or the agency relationship. It is extremely important to understand what an agent does, who the agent actually is, and what expectations you should have for your agent. A good agent can make the home buying process seem relatively effortless, whereas, a poor agent can make you long for your studio apartment.

An "Agent" is simply someone who represents you, the Principal, in a business transaction when dealing with a third party. In some cases an agent can perform all of the tasks normally assigned to the Principal, some of those tasks, or only a very specific task. Real estate agents fall into the latter category, having the authority to represent you only throughout a single real estate transaction.

When most people speak of their real estate agent they are usually referring to the person who took them around to see properties, or perhaps kept pestering them to list their home. In most cases, however, that person is actually a "sub-agent" of the actual agent, better known as the "Broker". Real estate agents, if not licensed as a broker, must work under someone, or some entity, who is. In my case, I am licensed to sell real estate in California, but not licensed as a broker, therefore I work for Keller Williams Realty; a licensed real estate broker. When you, the Principal, hire an agent, you are actually hiring the brokerage whose license that agent works under.

It is imperative, in any financial transaction, that you have someone representing your interests. I have noticed a recent trend where some buyer's are going directly to the listing agent believing that they will somehow obtain a better price. This is a dangerous trend, and leaves the buyer exposed to the conflicting interests between the buyer and seller, and never results in a reduction in the asking price of the home.