Some CT Home Buyers Are Getting Blindsided, Especially Those From NYC

Here’s the most common question I have received from clients re-locating from  NYC to CT.  In CT, Must A Buyer Sign A Representation Agreement to Tour Properties with a Realtor or Real Estate Agent? 

The answer is No, yet many CT agents tell customers that they must sign long-term agreements without explaining all of the consumer options. Clients moving from NYC and many other areas often don’t understand how the laws vary from state to state.

Here are the facts:
If you want to see property listed by a specific agent or agency, you can see that property without signing any agreement. This means if you are meeting with a Sotheby’s agent you can see all of Sotheby’s listings without signing an agreement.  In that case you must understand that the listing agent represents the seller and not you, so use caution in disclosing anything that might compromise your negotiating position. Everything the agent says, or does not say, can be in the sole interest of getting the seller the best deal and price. (Please note that the listing agent has an obligation to act in the interest of the seller only, unless you have entered into an agreement in which he or she is representing both you and the seller. This type of a agreement is unusual and difficult. It is not entered into often. I only recommend that very experienced buyers agree to have one agent represent both buyer and seller.)

If you are meeting with an agent from agency A and you want to see properties listed by agency B (since all agencies in CT have access to all MLS listings from all other agencies, this is very common), you have many choices beyond signing a long-term agreement with a stranger that you have only known for a few minutes. These are the options exercised most often by informed consumers:

  •  You can decide to see any property with the listing agent of that property. Just call the listing agent of the property you want to see and set up an appointment. In this case I advise that you not disclose any personal information. The listing agent is not representing you, but you can still tour the property, decide if you like the property and request all material information related to it. If you are considering buying the property after the tour, you should then take some time to research local agents and find one that can best represent you as a buyer’s agent.
  • You can sign a representation agreement with any agent just for that day or for the specific property you are seeing that day. The date, term of agreement, and properties that you are touring immediately can be listed on the agreement.
  • Do not sign any contract with any stranger before you fully understand who the person is and the nature of the commitment you are making. You should first take the time to understand all of your options and to research, assess and compare agents. This decision should not be made hastily when you are on your way to see a property with a stranger. The tour can usually wait. If you want time to research agents before you commit to long-term representation, then tell the agent you will do so and get back to him or her on a later date. If you must see a property before you have had a chance to do your due diligence, you can sign an agreement for a day or just for properties you will see that day. Tell the agent you will consider signing a longer term agreement once you feel comfortable with your agent selection.

 All consumers should do their due diligence before entering into a long-term agreement for such an important purchase. Only sign with an agent that has the skills, experience, knowledge and availability required to be a solid agent. If you have not had time to do your research, I advise that you don’t sign anything for longer than a day. After you have completed your research and select an agent you can also try working with them for just a week or month before signing something longer term.

 Eventually, a long-term working agreement with the right agent is in your best interest.
Once you do your research and select the right agent, having representation gives you a strong advantage. The best agents will allow you to compete more effectively against other buyers and exploit the right opportunities with sellers. They provide better analysis to help make decisions and they have a better knowledge of day-to-day market activity and the issues that should impact your decisions. They also understand the art and complexity of negotiation.

How can you research an agent?
Search the internet
Examine the agent biography for substantive skills and experiences, not fluff
Ask for list of property transactions completed
Check education and work experience outside the industry. Sophisticated skills in the area of analysis, negotiation, and communication are required to be an exceptional real estate agent. Much of this can be learned in other industries.
Check experience in the industry. Top transaction management and negotiation skills can only be learned through extensive experience doing many types of transactions.
Discuss knowledge of listed properties, neighborhoods, market trends, local real estate development activity, major local issues.
Ask agent to describe his or her breadth of services. All agents provide different services based on skill level and experience.
Does the agent work full-time? Does the agent have other jobs? Part-time agents can be in adequate in terms of service levels and competitiveness with other agents that are full time. When you are competing with other buyers, a full-time agent has an advantage.
Have a thoughtful conversation with the agent about how he or she runs his or her business. What are the agent’s priorities? How is the agents work week organized to service clients best? What skills do they think are most important in serving each type of consumer (for example a buyer versus and seller or investor).

The answer to these questions will give you insight into the agent and what they have to offer. Follow your intuition and use an agent who resonates with you in terms of authenticity, approach, education, knowledge and work style.

What if you have already signed a long-term agreement and you did not fully understand your rights?
CT laws protect people against agents that mislead consumers.  An attorney can advise you.

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