Real Estate

Anecdotes and Advice from a First Time Home Buyer Part 3 – Choosing a Realtor

My friend Christine has kindly agreed to write a series of posts on her experiences with buying a home for the first time which will be posted occasionally.
See Part 2 – Down Payments and Financing

Going it alone or choosing a realtor

With the availability of information online on MLS (Multiple Listing Service), how necessary is an agent? After all, agents work on commission and are paid a percentage of the value of a home. The fee is paid through the seller, but a buyer indirectly pays through the negotiated selling price.

For myself, the decision came down to the practicality of having an expert do the initial culling through the listings. Because our top priority is to stay along the subway line, my husband and I are dealing with the “hot” neighbourhoods where houses can sell within a week of being listed. As home buying novices, we wanted the advice of an expert in finding the right home and not overpaying for it. Real estate professionals have access to MLS properties before the public and can fine-tune searches. Agents are also experienced in negotiating offers, have access to a plethora of specialists such as home inspectors, lawyers, and mortgage brokers, and can lead one through the intricacies of closing costs and legal requirements.

Choosing a real estate agent

Choosing the appropriate person to work with was therefore not a decision that we made lightly. Start with the recommendations of friends and people you trust. Look at an agent’s online profile and their recent listings to evaluate if they work in the neighbourhoods you are targeting and at your budget. How long has the person been in the business? Although I was confident about a friend’s referral, I still met with the agent to interview her and to determine if she was someone with whom I would be comfortable working. I was impressed with her frank advice and that we could sign a buyers’ representation agreement for as short a term as two weeks. My husband and I decided to begin with a one-month contract instead of a longer commitment to see how it goes.

Dual Agency or Buyer’s Agency Agreements

Several of my friends were fortunate enough to find their homes without an agent and then worked with the listing agent to negotiate the buying price and finalize the offer. Such a situation, whereby the seller and buyer use the same agent, is referred to as a dual agency. The seller must also agree to this arrangement. From the agent’s perspective, dual agency is advantageous as s/he would earn a double commission. However, the worry is whether the agent has your best interests in mind, especially in terms of price.

Engaging in a buyer’s agency agreement is a contract to use the services of a particular agent or company for a specified length of time. The advantage of such a contract is that the realtor has agreed to work for you and is obliged to disclose all available information.

Realtors also have a network of other experts they can connect you with such as home inspectors, mortgage brokers and lawyers. A real estate agent’s job is to make things easier for you, so do not be afraid to make use of their network if you don’t already have access to such professionals.

Read the next post in this series “What to Buy?”.

15 replies on “Anecdotes and Advice from a First Time Home Buyer Part 3 – Choosing a Realtor”

This is a good series for first time buyers, friend of Four Pillars.

While Rob and I see some advantages in not using a real estate agent in certain situations on the investment front, I tend to agree with you that an agent is the way to go for first-time buyers/homeowners. In addition to the reasons you point out, I think it’s fair to say that the service is largely free for first time buyers. As you note, the seller pays the commission. If a buyer does not have an agent, it’s only the seller’s agent that benefits.

While some suggest this is an opportunity to negotiate the seller’s agent’s commission and reduce the purchase price, I don’t believe this is possible in most cases for retail purchases, and it’s a bit much to take on for a first time buyer looking for the best place to live.

Mike-TWA: I agree with you – a first time home buyer has enough on their mind (and not a lot of confidence) so better to just use an agent.

As I’ve read elsewhere – what is the benefit for the buyer to buy privately?


When I was looking for a real estate agent I went to open houses until I found that I really liked. So I called each one and had each one show me a house. Then I called the one I got along with and had them put together a pack of the houses that were in my price range and would fit our requirements.

I always think that the poor guy had to take us to around 25 houses before we put in an offer on one. Since we were first time buyers it took us a while to make the jump. Though if you consider he made quite a bit of cash on our transaction and mentioned that he was part of 9 other deals in the month we closed it was hard to take pity on him 🙂

Traciatim – I found my last real estate agent the same way – at an open house. She was selling a similar house to my own just up the street and it did well so I figured she was a good choice (which she was).


I agree with the idea that real estate agents can be useful for first time buyers. I’m always surprised that agents aren’t more eager to get offers from an unrepresented buyer accepted (since they’d earn double commission), but its been my experience that they aren’t, so its not really worth trying.

A buddy told me that agents typically view unrepresented buyers as ignorant rather than a chance to make a higher commission.

On an unrelated note I put an order in today for 30 shares of BMO – limit at $60.00 GTC.

Not really looking to add to the leveraged portfolio but it’s good to buy if it’s cheap.


I?m drooling over the prices of Canadian banks (and sad that I don?t have the cash/credit to buy right now

See, I actually do. “The plan” is to put a few grand into a U.S. equity ETF (due to the strong dollar and the fact my only exposure to the U.S. is a single Baby Berk) But hot damn, is the hammering Canadian banks are taking seriously tempting me. I really want to double up on BMO.

Damn you, asset allocation! Somebody talk me into it!

Sorry for the threadjack. Continue talking real estate. A very useful series, BTW.

Back on topic (:)) I’ll just point out as a side note, never hire a friend as an agent. We did that and it was awful – we didn’t want to criticize her decisions because she was our friend. Our son (about 12 months old at the time) loved her, and we were so embarrassed to point out to her that she – frankly – sucked as a real estate agent. It would have been so much easier to use a stranger where we could have had a professional relationship.

GIV – there’s no rules that you have to have perfect asset allocation at all times. You want banks? Then you shall have banks.

BB – that’s a tough situation to be in. I guess doing business with friends has that extra risk.


BB – it just occurred to me – what would have happened if you hadn’t hired your friend? Would she have been insulted? Could be a no-win situation either way.


Leave a Reply

Your email address will not be published. Required fields are marked *