DC REAL ESTATE AGENTS AND AGREEMENTS

Buyer Agency and Listing Agreements in Washington DC

Important Factors in Choosing a DC Real Estate Agent

It’s not just that some DC real estate agents are more talented, skilled, experienced or educated than others. Motivation and dedication, availability, style, work ethic and personality are involved, too. You can’t assess all these important attributes during a short introductory meeting, but your ‘spidey sense,’ combined with a bit of Internet searching, should produce a fairly clear picture.
  • Response: Does the agent return your calls, texts and emails in a timely manner? Are they including you in their schedule or asking you to do your own searches and and attend open houses instead of touring? Buyers and sellers all have different needs, but your agent should do more than function as a human key and paperwork facilitator. Find a proactive partner, not a paper pusher;
  • Honesty: Does the agent tell you hard truths or play into unrealistic expectations? Working with an agent who educates you about the market, products and methods will help set realistic expectations and better your ability to reach your goals;
  • Brokerage: What type of brokerage is the agent affiliated with? Is the agent a full-time agent with a full service agency? Part of a team? If so, will you work with an experienced agent?
  • Website: Does the agent have a website? If so, what’s included? Is it local? Informational or generic? Personalized or a cookie-cutter template primarily focused on generating leads from IDX listings? Does it mirror the talking points the agent made during your interview? Does it cater to YOU?
  • Is the agent a member of any online groups or engage in social media interaction? Check out the agent’s comments, posts and blogs to see what kind of information they provide;
  • Reviews: What are others saying about the agent? Not just testimonials on the agent’s website, but blog comments, ratings and reviews on consumer-related sites such as Yelp, Zillow and Trulia. If an agent doesn’t register themselves on sites that allow objective reviews, ask why. No one can be expected to have perfect reviews from every client and some people just don’t believe there is such a thing as “five star service” but an agent with no reviews at all really leaves you guessing;
  • Is the agent a “ghost?” It’s almost impossible these days not to have some type of mention on Internet search engines if you’re active in the business, so if the agent you’re considering is not showing up, you may wonder if they have the experience level necessary for your transaction, whether they are able to drive traffic to your listing or network with other agents to show you the best listings before everyone else is bidding, and/or if they’re a full time, full service agent or just someone who dabbles on the side;
  • Is the agent a Realtor? Designations can show that an agent has really gone the extra mile to become an expert in a certain area… or that the agent is really good at attending classes to obtain every possible designation. The designation of “Realtor” is an important one used by real estate agents who are members of the National Association of Realtors. Realtors must subscribe to the NAR’s Code of Ethics, which offers added protection and quality of service for the client.

Types of Listing Agreements and Terms

  • Open Listing: Owners can sell their home themselves under the terms of this non-exclusive agreement. They may have listings with more than one brokerage. Commission is paid to the agency who is the procuring cause (brings a ready, willing and able buyer who makes an offer on the property). Since the owner is unrepresented, they are not paying a broker on their side of the transaction. Should the owners find the buyer themselves, no commission is due. Full service real estate brokerages, therefore, are not motivated to accept open listings;
  • Exclusive Agency Listing: The broker will represent the owners but the owners may still sell the property themselves and avoid paying commission . The broker may cooperate with other brokerages to bring in a buyer and the listing commission is split between the two brokerages. Exceptions and deadlines may be included in the agreement;
  • Multiple Agencies: As a seller, it is also possible to use more than one agency to list your home, though the listing agreement used must be for the jurisdiction where the property is located. It may be difficult, however, to get brokerages to agree to a multiple agency agreement. Good agents put a great deal of time, effort and expense into your home search and/or sale and want to be guaranteed they’ll be paid for their work;
  • Terms and Conditions to Consider: Commission Term(s) of listing Price, flexibility and bottom line Selling agent commission bonuses and incentives; who will pay them? Cancellation Expiration Showing restrictions & showing contact Marketing & advertising: Venues and who will pay costs of print advertising and the photography for listing? Staging: Which staging company will you use and who will pay the cost? If you’re staging yourself, what’s expected? Open houses: How often? What results are expected? Who will pay any additional compensation such as agent bonuses and gifts?
  • Same Agent, buy and sell transaction: This is different than Dual Agency, where the agent represents both the buyer and seller of the same property. Often sellers of a home will also want to purchase a new home in the same city and use the same agent for both transactions. Ask: Will there be a commission discount on the listing for obtaining the buyer business? Is the agent adept as a buyer agent? Ask all the questions you’d ask of any buyer agent Outline your expectations as a buyer, timing, pre-qualification and talk strategy;
  • Listing Agreement Terms: In a listing agreement, commission percentage (default, FISBO or commission disparity), and other monetary terms Dual Agency, Designated Agency, Single Agent Dual Agency are negotiable;
  • Property Type: What type of property are you selling? Is the agent proficient in that area of real estate? Real estate type can cover a number of different categories, such as residential, commercial, farm or vacant land. Location can be any location in the DC Metro area;
  • What’s Negotiable: In a listing agreement, commission percentage (default, FISBO or commission disparity), and other monetary terms can be negotiated.

Buyer Agency Agreements

In addition to standard terms of the agency agreement, you’ll want to ask DC real estate agents about how FSBO properties will be handled, how discrepancies in commission will be handled, types of representation, term of agreement, locations and ancillary fees like “admin” and “additional commission” charges. Ask your agent to explain these provisions and their implications for your transaction.
  • Designated Agent: Agent who is designated by the broker to represent either the buyer or the seller in a dual agency transaction. *When you sign an agency agreement, it is with the brokerage, not the agent. By default, since you chose the agent, the brokerage will designate the agent you decided to partner with;
  • Multiple Agents: As a buyer, you can choose to have one agent covering Virginia real estate, one covering DC real estate and one covering MD real estate if you’re looking at property in all those places and you think working with different agents will benefit you. Agents may choose not to work with you under this scenario as it becomes a complex situation requiring concise communication between the agents and with the buyer. In DC, neighborhood boundaries sometimes overlap state lines, such as in Chevy Chase, and those lines are not easily defined on listings or during tours. This can lead to disputes and violations of agreements that may result in agents taking action against one another and the buyer;
  • Single Agency: An agent from brokerage A represents the seller and another agent from brokerage B represents the buyer in a transaction;
  • Dual Agency: This is when one agent from Brokerage A represents one party to the transaction (either the buyer or the seller) and another agent from the same brokerage represents the other party. In other words, two agents from the same brokerage, but representing opposite sides. This is very common, since buyers would not want to exclude properties just because they were listed by Brokerage A;
  • Single Dual Agency: Single Dual Agency is a real estate agent who represents both the buyer and the seller in the same transaction. Once this occurs, the agent is restricted to providing “ministerial acts” only for both parties. This is legal and popular with agents since they earn both sides of the commission, but The Isaacs Team won’t agree to do it. We think you hired your agent expecting full service and that is what we provide;
  • Transaction Agents: These agents do not owe a fudicary duty to either the buyer or the seller. They do not represent either side. Instead, they facilitate the transaction by providing the paperwork for one or both sides and overseeing the transaction in the most basic terms. Virginia and DC law requires buyers and agents working together in an agency relationship to define terms of their agreement in writing before property is shown or a substantive discussion of a property takes place. The purpose of the law is to ensure that obligations of both parties are clear and mutually agreed upon, and that the agreement begins at the start of the relationship. The scope of the written agreement is negotiable, but it must include a list of services the agent will deliver, a schedule of fees associated with those services and a definite termination date.

Your Agency Relationship

The relationship you have with your DC real estate agent can make a difference in your transaction. Here are some rules of thumb:
  • You Have to Give to Get: When you decide to work with an agent, think of him/her as a partner in your real estate transaction. In doing so, you’ll create mutual trust and loyalty, shared interest in a common objective, and enthusiasm on the part of your agent to help you reach your goals. This requires sharing any relevant financial information that could affect your transaction, your game plan, intentions, timeline, goals and obstacles. It also includes playing by the rules in obtaining a pre-approval from a qualified lender before touring, signing an agency agreement that protects the brokerage and you, and refraining from contacting listing agents or sellers while under representation. Communication and trust are the most important component of a successful relationship between client and real estate agent;
  • Firing DC Real Estate Agents: What happens when things aren’t working out as you’d hoped? Maybe there’s a personality conflict, or you just don’t have confidence in your agent’s ability to find you the home you want. Whatever the problem, here are some suggestions on saving or ending your relationship with your agent: Evaluate objectively how the process has gone. Is it really failing? If so, what part did you play in that failure? What part did the agent play? Make a list and share it with the agent. Sit down and discuss the issues diplomatically, but honestly. Explain what you were hoping for when the relationship began and how you’d like things to go forward. Listen to the agent’s side and understand what he or she is trying to get across. Ask and answer the question “Where do we go from here?” If you’re both unwilling to sever the relationship but agree it needs to change, create an action plan that you both buy into, and agree on a specific time periods to reach goals. Detail how you’d like communication to work and review your home purchase criteria. Are your goals reasonable and achievable? If things haven’t improved as agreed in the designated time period, proceed to the next step. Make an appointment with the agent’s broker, who actually holds, and is responsible for, your listing or buyer agency. You don’t have to throw the agent under the bus (unless you feel it is truly deserved) to make a change. Simply say your goals and styles don’t seem to be the same and you’d like to work with someone who has the ability to better meet your needs. The broker should handle the rest. If the agent is also the broker and talks fail, review the terms of any written agreement you have. If you’re a seller, request a release from the listing agreement. Be sure to get the release in writing. If the broker refuses, advise the broker that you’ll consult an attorney and, if merited, file a complaint against the broker with the broker’s affiliated associations and real estate board. If the broker still refuses to release you, do consult an attorney. If you’re a buyer, ask the office broker to reassign your agreement to another agent within the office;
  • Being Fired by DC Real Estate Agents: Yes, you can be ‘fired’ by DC real estate agents. Sometimes clients aren’t team players and a real estate agent realizes that the business relationship is not going to yield positive results. Agents don’t have to be BFFs with every client–or even like them for that matter–to do a great job, but they do want to feel there is mutual respect and motivation to reach a common, realistic and achievable goal. If an agent feels they are being shut out, mistreated or misled, expect a swift end to come of the relationship. Agents can end a client relationship in a number of ways and some are more kind than others. The most confusing for clients is when the agent simply stops interacting (termed “abandonment” in the industry). The best scenario is for the parties to meet and go through the process outlined in Divorcing Your Agent (above). Focus on the agent’s experience with the circumstances and ask for an explanation of why a positive outcome is not foreseen. Most agents won’t walk away from a promising client, especially after investing a good amount of time, energy and expense, so if this does happen to you, it’s probably time to take a good hard look at your expectations, opinions and behaviors. Make necessary adjustments before continuing (if the agent is willing), or before signing on with your next agent;
  • Referrals and the “Win-Win”:  Sooner or later, you’ll want to buy or sell again. Having a trusted ally who already knows your property, needs, likes and dislikes puts you ahead of the game. So keep in touch! If your agent has done a good job for you, reward him/her with referrals, online recommendations and shout outs on sites such as Yelp! Trulia and Zillow. From time to time, email your agent for property updates so you can keep track of your home’s value. If you’re considering major improvements, drop your agent a line to ask which ones will net you the best ROI on resale down the road. There are many ways your agent can benefit you after your transaction is completed. Don’t hesitate to ask!

New Construction

That attractive, smiling face on the other side of the developer’s sales center is a licensed real estate agent who represents the seller. It may seem like a good idea to go directly to the source if you’re considering the purchase of new construction, but you can cost yourself advantages that a Realtor expert in development can provide, without gaining a discount. Read our page on Buying New Construction. Making a first visit to a development sales center or meeting with a developer’s sales rep without your agent present can allow developers to refuse to pay your agent’s commission? Always let your agent make new construction inquiries for you and be sure your agent accompanies you on your first visit.

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