What does a real estate agent do?

Part 2
By Marc Holt

In my last article we discussed the basics of the work of a real estate agent. In this article we'll see what else is involved.

A real estate sells property, right?

Wrong! I have never "sold" a property in my life.

Buying a property is a complicated process. You don't just go out and buy the first property you see. I have seen clients look at a few properties and then suddenly decide to buy a particular one almost as soon as they see it. Others spend days or even weeks looking around, and even then they may not make a decision.

So why can one client make a decision and another one can't?

They are all looking for that property with what I call the "Oooh factor". That's the sound you hear when a client walks onto a property and says, "Oooh! This is what I am looking for." Of course, the client may not always say that, but a good agent will read a client's reaction and recognize the Oooh Factor when it happens.

In other words, clients will only decide to buy a property when they see exactly what they want in their heart. And this is why agents never actually "sell" property. How can we force anyone to like a property enough to buy it? Anyone who suggests an agent forces people to buy property doesn't understand human psychology or the real estate business.

Once a client has made a decision, in most cases the agent's work has just begun. He has to ensure that the property in question is a sound investment, that the client buys it at the right prices, and that the legal process of buying and transferring the property is handled correctly.

But there are times when the agent has to step back and let the seller and the buyer thrash out the details. For example, if a client decides to buy a house in a new development, he may want to work with the developer to make changes to the basic design of the house he has selected before he even puts down any money. The ultimate price of the property may change as a result of any additions or changes, and this will affect the commission the agent receives. But that is not his concern. He is just there to ensure that the buyer is getting the best possible deal. If the negotiations stall over an issue, the agent should be ready to step in and try to help both parties reach an amicable agreement. And if that is not possible he should be prepared to advise his client to walk away.

Reaching an agreement takes the ability for an agent to listen to and understand each party and help them work towards a successful conclusion. Each agent operates differently, but we all have some responsibilities in common:

1. The agent should provide any information the client needs to make an informed decision. This can include a schedule of legal or building maintenance fees, the age of a development or property, estimated completion date of an unfinished project, which direction the sun rises and sets, and so on. In short, the agent should provide answers to the many questions a client will ask. And if he doesn't know the answer he should be honest and tell the client that he doesn't but that he will find out the answer, and then do so.
2. The agent should investigate and report on the management of a housing estate or condominium, and check that the operating and sinking funds are healthy enough to sustain the operation of the property in good condition.
3. The agent should ensure that any developers he introduces a client to are reputable and financially viable. It is the agent's reputation that is ultimately on the line.
4. The agent should negotiate a sale on the buyer's behalf without regard to the commission he will finally receive. After all, if the seller and the buyer conclude a sale and they are both happy the agent will have earned his commission as well as the good will of both parties. In the end, an agent lives or dies by his reputation for honesty and fairness.
5. The agent must work closely with a client and listen to his concerns and needs.
6. The agent should ensure that a client receives the best possible legal advice.
7. The agent should not exert any pressure on a client to buy. Buying property is a big decision, as well as an emotional one. The agent should be there to help the client find the right property, and be prepared to continue looking for as long as it takes.

So, what is an agent not responsible for?

1. The agent is not responsible for a client's finances. If a client says he has 5 million Baht to spend the agent should show properties around that budget limit. If a client decides to buy a property over that limit the agent should ask if the client can afford it and accept the client's answer. If the client realizes later on that he can't afford the property the agent should not be held responsible.
2. If a client has paid a deposit on a property and then changes his mind for no good reason and decides not to buy, the agent is not responsible for regaining the deposit for the client. Once a deposit has been paid in Thailand the buyer will automatically forfeit unless the sale is cancelled for a very good reason. For example, if the buyer has to cancel a deal because he cannot get financing, this might be a valid reason for returning the deposit. But this condition would have to be written into the deposit agreement at the time of signing.
3. The agent should not have to pay for additional expenses the client incurs. For example, if a client asks an agent to take him away from the agent's home territory to look at properties elsewhere the client should pay the expenses. This would include expenses for gas, accommodation, and even meals. The agent should negotiate this with the client before traveling.
4. The agent should not be held responsible for any faults with a property that a buyer finds after the sale. It is up to the client to thoroughly check everything with the help of the agent beforehand to ensure a property is up to standard before buying. When in doubt, the client should hire expert help to check engineering or other factors.

Have I covered everything an agent does in these two articles? Probably not. But I hope I have given you enough food for thought to understand more clearly what to look for when choosing an agent. There are plenty of reputable agents and agencies in Thailand. The guidelines I have outlined above should help you weed out the wheat from the chaff. Happy property hunting!

© 2005 Holt WorldWide Co Ltd, Published in the Pattaya Property Trader magazine, May 2005

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