By Dave Twombly
A few months ago some recently married friends of mine decided to start their home search. As we know, there is important prep work that needs to happen before starting a search. You have to figure out what is important to you in a home, where you want to be, check commutes, make sure all parties (husband and wife, pet and owner, roommates buying together etc) listen to each other to know what are deal breakers and what aren’t. Most importantly, and perhaps most tedious for newly married couples, you need to get your finances in order. This means speaking to some lenders, figuring out how much you can afford, taking care of any credit issues and finally getting pre-approved. My friends were looking in an area that 4Buyers doesn’t cover, so I wasn’t involved but did my best to provide them with information and make sure they knew what they needed to get started. Naturally I was interested in their experience.
A friend of theirs recommended a broker at a big agency you’ve all heard of. This is a brokerage that both sells properties and works with buyers, as most big shops do. The brokerage provided an attorney and financing department for them to use. It was one stop shopping, which is part of the pitch especially to first time homebuyers who don’t know and are intimidated by the big and life changing undertaking of buying a house.
They started the search and saw a few properties. I was following them along as I was curious to know the properties they liked and were seeing. I noticed that all of the properties they saw also being sold by the brokerage. They settled on a house in fairly short order (a property they report, they found themselves and requested to see, but was also being sold by the brokerage) and eventually had their offer accepted.
We talked about the whole process as I took mental notes to see how working with a big brokerage that works with both buyers and sellers would be different (better, worse or none of the above) than working with an exclusive buyer agency. I was looking to be educated as well.
While there are some advantages to one stop shopping, there are some also some disadvantages . Clients don’t always find the house of their dreams right off the bat. Oftentimes searches have to be expanded and a good buyer agent will use what they’ve learned about their clients to look for properties that might not fit the black and white search parameters that were set up. If you are only being shown properties that your brokerage is also selling, how many good properties are you missing out on?
Smaller agencies don’t have financing departments. We encourage our clients to shop around for the best deal and provide a number of lenders who have done right by our clients. If you are working with an in-house lender, are you missing out on a better rate or experience from a different lender?
The same goes with lawyers, home inspectors, contractors etc. It’s important that buyers find a lawyer they are comfortable with, who can provide the amount of attention they need (especially, once again, for first time buyers) to help them through this, sometimes, stressful process. As with any service provider you are working with, you should interview the potential candidates before settling on one. Do you have this ability in a one stop shop?
The purpose of this post isn’t to rail against big brokerages. It’s to make sure you are asking important questions before settling on the type of agency you are going to work with. The one stop shop does have some advantages and might be right for you. An exclusive buyer agent might provide you with different services or advantages. Like anything, it’s important to go with what feels right for you. Hopefully this will help you with your thought process.