Barrington Illinois Short Sales - Tips for Sellers - Dual Agency - Advisable or Not?
In my first short sale blog this month we talked about Pricing Your Short Sale Listing in Barrington IL.
Then I discussed Advertising Short Sales and how they deserve more effort than some may care to give.
Now we are going to move on to perhaps what may be a critical decision, Dual Agency.
Definition of Dual Agency: Licensed agent acting on behalf of the seller and buyer of the same property.
First lets see what a Realtor can do for both the buyer and a seller in any dual agency situation. I am specifically addressing sales so have excluded verbiage related to leasing.
- Treat all clients honestly
- Provide information about a property to a buyer.
- Disclose all latent material defects in the property that are known to the licensee.
- Disclose financial qualification of the buyer to the seller.
- Explain real estate terms.
- Help the buyer arrancge a home inspection.
- Explain closing costs and procedures.
- Help the buyers compare financing alternatives.
- Provide information about comparable properties that have sold so that both seller and buyer may make educated decisions on what price to accprt or offer.
Now let's se what a Realtor cannot disclose to clients when acting as a dual agent.
- Confidential information that Licensee may know about a client without that clients permission.
- The price the seller will take other than the listing price without the permission of the seller.
- The price the buyer is willing to pay without the permission of the buyer.
- A recommended or suggested price the buyer should offer.
- A recommended or suggested price the seller should counter or accept.
These points should be explained to any buyer or seller when they list a property for sale and at the time a buyer wants to buy any property. In any real estate transaction this should be seriously considered and discussed so both parties fully understand the points. Now we will consider this in relation to short sales in Barrington Illinois and any other areas.
As the listing agent I am going to discuss with a seller pricing of the property based on comparables and condition of property, and add to that my knowledge of how short sales work and what is likely to be accepted by a bank. We will talk about how to deal with all offers that come in especially with regard to price and "low ball" offers. My job is to price to get a buyer and then have that offer approved by the lender/s.
So think ahead to an offer coming in where I am also the buyers agent. The buyer cannot ask me what to offer, he has to make his own decision in regards to price. I present this offer to the seller who also cannot ask me whether he should accept the offer in regards to price. Who in this situation is the only person that can advise the seller? You've got it, the listing agent..
Here is an example. Let us say the property is listed at $250,000. A buyer comes along and wants to buy. I show him the comp sales and he decides based on what he sees and his knowledge of short sales that he is going to make an offer of $99000. (Yes folks that's $150,000 less than asking price). I have not been able to advise the buyer what he should offer if he is truly interested in buying or why his low offer is unlikely to get accepted. I take the offer to the seller, who needs advice, how on earth can the seller make an informed decision about whether to accept the offer and send it to the bank for approval when I cannot help them. Let's now say the seller decides to take the offer and send it to the bank. The property is flagged as under contract and the showings are likely to stop cold.
Not only have I not acted in the best interests of the buyer or the seller, I am now also a fool, because I know the bank are most likely to say NO! So as you can see Dual Agency for short sales are not advised. It is a situation that requires more input from an agent than a normal sale.
Short Sales = No Dual Agency
So if you have to list your home as a short sale, consider dual agency and how it works. It clearly is not in your best interests. If your listing agent happens to find a buyer for you, don't be concerned, we all have agents we have worked with before or in our office that can step in and represent the buyer.
I help sellers with short sales in other areas in addition to Barrington. Lake Zurich, Hawthorn Woods, Kildeer, Long Grove, Deerfield, Inverness, Deer Park, Cary, Algonquin, Lake In The Hills, Fox River Grove, Schaumburg, Palatine, Hoffman Estates, Arlington Heights, Rolling Meadows, Buffalo Grove, Wauconda, Island Lake are just some of the suburbs I will help clients with short sales. Whether you have a condo or a luxury home, if a short sale is what you need, call me for a free consultation.
The next short sale tip will talk about what to do with offers.
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Contact Corinne Guest ABR, e-PRO, GRI, Broker, Royal Advocate Realty Licensed Realtor® in Illinois, 847-381-6328 to list your property for sale or to buy a property in Barrington, Lake Barrington, North Barrington, South Barrington, Barrington Hills, Inverness and Deer Park, as well as Lake Zurich, Hawthorn Woods, Kildeer and Long Grove in Lake County Illinois.
Call me today at 847-363-3686.
Copyright © 2009 By Corinne Guest, All Rights Reserved. Barrington Illinois Short Sales - Tips for Sellers - Dual Agency - Advisable or Not?
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I don't believe that "Dual Agency" in terms of being a neutral party is possible. As a listing agent I have sold several of my own listings, but I tell the buyers, "I represent the sellers. If you have confidential information that you do not want the sellers to know, do not tell this to me" I then further clarify on the purchase & sale and an agency disclosure that I represent the sellers. So far, it's been fine including one short sale.