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No words can describe the mental anguish suffered by people who innocently make a bad real estate deal, such as buying a noisy apartment, or one with problematic neighbors, serious structural faults or a cellular antenna on the roof.

One of the institutions designed to make life easier for apartment buyers and help them make the right decisions is the real estate agency. Agents are supposed to be professional, skilled and familiar with a neighborhood and its surroundings. Still this is an expensive service, and the growing number of lawsuits against real estate agents in recent years shows that instead of helping, an agent can actually increase the anguish and the difficulty inherent in the search for an apartment.

What, then, are the advantages and drawbacks of using a real estate agent, and what is the best way of going about it?

Aliza Cohen, CEO and owner of Reshef Properties, one of the largest real estate agencies in Israel, says there are clear advantages in transacting a real estate deal via an agency.

"Every professional has the prior knowledge required to examine a deal from a professional perspective and arrive at the best deal," says Cohen. "These days agents who have graduated from training courses can help a client obtain the best deal."

Getting the upper hand

In every deal, she explains, each side tries to retain the upper hand. "The seller says to himself, `The other side will try to lower the price anyway, no matter what price I set, so I'll start with a higher price so that I can come down.' The buyer, for his part, will start out with a low bid that he can then increase."

For this reason, Cohen adds, "when there is an agent, he knows the absolute truth about the buyer and the seller, who always leave a little extra leeway, and he can therefore bridge the gap that one of the sides sees as unbridgeable."

"There are many advantages to transacting real estate deals via an agent," concurs Tzachi Bardugo of Bedek Bayit, a service that checks apartments and their surroundings for potential buyers. "Using an agent saves a buyer the cost of purchasing a classified ad, handling dozens of phone calls and setting up appointments with interested parties."

Furthermore, explains Bardugo, the agent is supposed to provide the added value of efficient and proper marketing for an apartment and showing it to a focused, quality target audience and to as many potential buyers as possible.

"The agent is supposed to help along the selling or purchasing process in other ways," adds Bardugo. "He is supposed to provide information on the neighborhood and advice on the planning and development of the surroundings, as well as refer clients to other relevant professionals, such as assessors, lawyers, building engineers with expertise in structural defects, environmental experts who can check for cellular radiation or proximity to high tension wires, experts who can check for radon in home security rooms and other neutral professionals who can check out the neighbors and the neighborhood."

Another advantage, notes Bardugo, is that the agent has years of experience in getting things moving and closing real estate deals.

It's not cheap

Still, one must not forget that this is a service that involves more than a little outlay. The accepted agency fee is 4 percent of the price of the deal and is shared equally by the buyer and the seller, Cohen says, but if an agent represents both the buyer and the seller, he usually settles for 3 percent - 1.5 percent from each party.

This fee is quite justified, Cohen says. "In a deal worth $150,000, if someone has to pay $3,000 to an agent but saves $10,000 on the price of the property, that's certainly worthwhile."

On this matter, Bardugo adds that considering the number of unlicensed agents working in this field, both buyers and sellers are advised to make sure they understand the meaning of any agreement they make with the agent and what the agent's job is. Bardugo also says that real estate agencies with branch offices are less flexible regarding payment, while private agencies are often willing to accept a lower fee.

The drawbacks and risks have nothing to do with the high fee.

"The Israeli real estate agent is perceived as a dishonest merchant interested only in his own personal gain and not in the satisfaction of the parties to the deal," says Bardugo. "This can be a deterrent."

Bardugo adds that agents are often perceived by the public as being interested only in the good of one side to the deal - as representing one party alone - making their opinions totally subjective.

"Sometimes the agent leads the buyer or seller into a situation or meeting that is unsuitable for one of them," explains Bardugo, "and which does not meet the criteria they defined. For example, quite often the agent will show potential buyers an apartment that is beyond their price range."

Verify the license

Attorney Shir Hasfrai, the marketing manager at Bedek Bayit, mentions another problem.

"The Real Estate Brokerage Law states that someone who wants to work as a real estate broker has to pass a licensing test and must uphold a series of ethical requirements concerning his clients, as well as pay an annual licensing fee."

The problem is that this law is not enforced, and anyone who wants to can engage in brokering real estate. The result? The courts are full of lawsuits against real estate agents. Due to the large number of unlicensed brokers, the courts are now handling many serious cases in which agents presented unauthorized exaggerated valuations of properties to promote deals, while the law explicitly states that only a licensed appraiser is allowed to assess the value of real estate properties.

Hasfrai says that in other cases structural checks are done by people who are not building engineers with expertise in defective construction, to promote a deal tainted by lack of good faith and negligence.

"Most of the suits against agents concern draconian contracts their clients have unwittingly signed," says Hasfrai. "The most common problem with these contracts is their generality, allowing the agents broad interpretation as they see fit."

The Real Estate Brokerage Law also has a loophole allowing agents to sign sellers on an exclusivity contract for an unlimited time period, leaving the sellers "hostage" to the agents.

"First," says Cohen, "check that the agent has a valid brokerage license. Then check whether he knows the market. I advise people to go to a local broker who lives in the desired area and knows the advantages and disadvantages of every street - how they look during the day or night, whether there are any traffic or ecological hazards.

Client's checklist

"Make sure the agent will be providing added value. This should be evident almost immediately. Make sure the agent treats the client seriously, returns phone calls, makes a concerted effort, presents himself as a real estate broker from the outset and does not try to hide this fact."

Bardugo says that before choosing an agent a few things should be checked. First, get some recommendations from friends regarding reputable and professional agents, and do a market survey between the relevant agents and between the local real estate agency chains.

Check whether the agent has professional training in marketing real estate, whether he has a valid license, whether brokering real estate is his only job - some brokers have other jobs. It is important to choose an agent who works only as a broker and will have a high level of availability.

"It is worth investigating how the agent works," adds Bardugo. "Check how he advertises his services and his marketing methods - signs, flyers, `open house' mornings or evenings - when a number of interested parties are invited at the same time to see a property. Does the agent have an active Internet site, and does he stay up-to-date regarding new, relevant properties?

"It is likewise worth finding out, as far as is possible, what percentage of the properties he has represented have been sold by him, what is his average selling time and whether he closed the deals at realistic prices. A professional agent will take good care of his clients and not think only of his own personal gain and pressure clients into making a deal."

Bardugo also advises people not to be afraid of exclusivity, which is designed to provide the client with a high level of service and spur the agent into closing the best deal.

One should check the level of quality provided by the agent before signing an exclusive contract and should also designate a fixed period for exclusivity with the agent.

Another recommendation is to ask the agent for a written description of the neighborhood: the type of population, educational facilities, transportation, crime rate, community services, environmental data (cellular antennas, high tension wires). One should not hesitate to ask about the neighbors in the building, future plans for the building and about the house committee. Even when everything looks perfect, says Bardugo, one should also ask the broker about the drawbacks of the apartment and its surroundings.

Before signing a contract, Bardugo also advises obtaining an independent appraisal of the apartment and a structural check by a building engineer qualified to detect structural defects to assess the cost of renovations and to provide bargaining chips during negotiations over the apartment's price.

Try to check out the neighbors and the common areas in and around the building - make sure there are no public nuisances or environmental hazards. In developing areas, it is worth examining the future plans for land in the area, as well as the infrastructure.