Confidential: Real Estate "For Sale" Signs

I just got a comment from a reader that said: "Hi Gerry! I have a nephew that is looking for his first home in the Lancaster County area. He thinks that he must call the realtor that is listed on the yard sign to see and buy a particular house. I told him that I heard it is best if a person has his own realtor and that his representing agent can show him any home that is advertised. Is this true? Thanks for your advice. Sherri C"

This comment points out another 'confidential' fact about real estate that shouldn't be confidential; that is - NO! You generally do not WANT to call the agent whose name is listed on a sign in the yard!

Up until about 1998 in the State of Pennsylvania, if you were driving down the street in a neighborhood in which you had some interest and you saw a sign in the yard that said "For Sale", you would often call the agent listed on the sign. Often the agent would offer to show you the house. He/she would be friendly and outgoing and do everything possible to make you feel 'at ease' and comfortable. After a while, if the agent was good, you might begin liking them. It seems like they know a lot about the house and they are sure being helpful in showing you around. They appear to have your best interests in mind - or at least they seem to!

In fact, that agent's job is to represent and protect the BEST INTERESTS of the seller of the home. They have a written agreement that they will do everything within their power and within ethical practices, to get the BEST TERMS possible . . . for the SELLER!

That means that if you are the person who called the agent with the intention of buying this home, that agent will, through casual conversation, find out as much as they can about your motivations, timing, finances, etc., etc. Then they will "use" that information to negotiate ON BEHALF OF THE SELLER!!!

An analogy might be as follows. Let's say you are in a car accident with another driver. The other driver decides to sue you. You think to yourself "Sue me???!! The accident wasn't MY fault. I should be suing them!" But instead of hiring your own attorney, you decide you will just call their attorney and see if he will represent you, too. Maybe you can even save some money!

The conflict of interests is obvious here. But it is about the same situation as the home buyer who calls the listing agent about a home for sale. You want an agent that represents you and YOUR best interests - exlusively.

The reason that I mentioned 1998 above is because that is the year that Pennsylvania adopted the "Consumer Notice". It is sometimes referred to by agents as "the green sheet" because of the color of the form. At the top of the form, it indicates in bold type "This is NOT a Contract." This is so consumers are not afraid to sign it. It does not obligate you to anything or anyone. In fact, if you were to interview 10 real estate agents about listing your home, you would (or at least should) be asked to sign 10 copies of this notice.

Signing the notice merely indicates that the agent has described to you the various types of agency practiced in the State of Pennsylvania. In other words, he/she has described the various types of Real Estate Agents. These would include Buyers Agents, Sellers Agents, Dual Agents, Designated Agents and Transaction Licensees. They must also indicate WHICH TYPE of agent they would be during the proposed transaction. Again, in other words, they would have to tell you whether they would be representing you or someone else in the transaction (or no one at all).

It is the State's way of ensuring you know who your 'friends' are. And in the past, they weren't always who they said they were. Now they have to identify themselves!

Since this post is getting so long, I will describe the various sorts of agency in another post, but suffice it to say, that in a transaction as important and complex as a real estate purchase or sale, you want to have someone representing YOU and YOUR INTERESTS. You also want to know who anyone you happen to speak to, who they represent. It could save you thousands of dollars as well as having a legal and successful transaction.