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WHY DOES ANYONE TAKE THE ADVICE OF THE PRINT MEDIA, ANYWAY??

The print media keeps making my job harder and harder.

FIRST PIECE OF BAD ADVICE
First they advise home buyers to "use the services of a buyer's agent".
Then they write: "Don't sign a buyer's agency agreement because you
don't want to be tied to one agent.

NEWS FLASH: In the state of Maryland, without a written Buyer's Agency Agreement,
an agent cannot:

1. Evaluate property.
2. Write contracts.
3. Negotiate for a buyer.

=============== SEE PERTINENT PART ========================================
Agents Who Represent the Buyer
Presumed Buyer's Agent (no written agreement): When a person goes to a real estate agent for
assistance in finding a home to buy or rent, the agent is presumed to be representing the buyer and can
show the buyer properties that are not listed by the agent's real estate company. A presumed buyer's
agent may not make or prepare an offer or negotiate a sale for the buyer. The buyer does not have an
obligation to pay anything to the presumed agent.
If for any reason the buyer does not want the agent to represent him or her as a presumed agent, either
initially or at any time, the buyer can decline or terminate a presumed agency relationship simply by
saying so.
Buyer's Agent (by written agreement): A buyer or tenant may enter into a written contract with a real
estate agent which provides that the agent will represent the buyer or tenant in locating a property to buy
or rent. The agent is then known as the buyer's agent. That agent assists the buyer in evaluating
properties and preparing offers, and negotiates in the best interests of the buyer or tenant. The agent's
fee is paid according to the written agreement between the agent and the buyer or tenant. If you as a
buyer or tenant wish to have an agent represent you exclusively, you must enter into a written buyer
agency agreement.
==========================================================================
Now, tell me how a buyer's agent can do their job without a written agreement???

SECOND PIECE OF BAD ADVICE
Do not let your agent refer you to a lender. Buyer's agents may have secret agreement for kickbacks
from lenders.

In a pig's eye. The reason I recommend lenders is because I have experience, have closed hundreds
of sales, can evaluate lender's Good Faith Estimates and know local direct lenders who will be
accepted by local sellers and will close the sale on time, provide the written loan commitment timely,
and don't charge a lot of junk fees. What more could anyone ask????

The writers in the print media tell the buyers to "shop around". Fine, but their advice usually only extends
to interest rates. They don't distinguish between direct lenders and brokers. They don't explain lender
fees. They don't have any knowledge of any lender's track record of closing timely.

THIRD PIECE OF BAD ADVICE
Do not use a home inspector recommended by your agent. They claim that home inspectors
recommended by agents will overlook defects in order to get the contract to settlement so the agent can
get paid. Have these fools read any of our statutes lately?? Do they understand the duty of fiduciary???
All an agent has to do is recommend a home inspector who misses or overlooks something and when
the buyer takes possession of the property and discovers the defects, WHOM DO THE MEDIA
FOLKS THINK THE BUYER WILL BE FILING COMPLAINTS AGAINST??? Not the home inspector.
Their liability is usually limited by the signed agreement. They do not have a duty of fiduciary. Only
the buyer's agent has that duty.

The reason I recommend certain home inspectors IS PRECISELY BECAUSE THEY ARE GOOD AND
THOROUGH AND TOUGH. We WANT to discover defects prior to settlement, not after settlement.
Before settlement, the burden of repairs is on the seller. After settlement, the burden of repairs falls
on the deep pockets. Who has the license that they will pay a lot of money to protect??? Agents.
Who has the E&O insurance that will settle almost any claim rather than fight??? Agents. Who will
pay rather than defend a law suit??? Agents. EXCEPT THIS ONE.

THE MEDIA HAVE NOT THE FOGGIEST IDEA WHAT WE DO.
But, then, they don't really care, do they?? Their purpose is to sell newspapers. Not print truth
or news. It doesn't make the news when we find serious defects through a home inspection and
get serious repairs made. It doesn't make news when a loan goes smoothly and a buyer has a
fair rate with low fees and closes on time. It doesn't make news when a buyer's agent puts 200
miles on their vehicle in 4 days of showing homes to a buyer family to find the very best home to
meet that buyer's needs. It doesn't make news when a family moves in to their home at the end of
a very smooth transaction.

It just makes our buyers very happy and gives us a very good pay day and EVERY PENNY EARNED.

Good Home Inspectors are our friends.

Lenn Harley, Homefinders.com. Serving Maryland and Virginia real estate buyers.

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 10/12/2006 07:26 PM

Comments (11)

buyers agents maryland, buyers agents virginia

11 Comments on WHY DOES ANYONE TAKE THE ADVICE OF THE PRINT MEDIA, ANYWAY??

OCT

2006

This is pretty funny because I understand your frustration but tend to agree with two of the three suggestions:

1I think the BAA establisheds your role as a fiduciary.

2- Borrowers should seek financing advice from their PRIMARY financial advisor; a stockbroker, financial planner, accountant, etc. NOT because a Realtor gets kickbacks because their primary financial advisor knows their needs better. A financing rep whom you do NOT suggest removes that piece from your fiduciary responsibility.

3- The inspector? Well, an independent inspector is always going to protect your fiduciary role inasmuch as the buyer made the choice to be informed.

Just my opinions. Realtors aren't legal experts, financial advisors or construction consultants. It may slow down the deal a bit but transferring those risks of your fiduciary capacity to independednt experts in those two fields reduces your exposure.

IMO, the media hit the nail on the head with the last two.

I'm interested in seeing more comments; this is a good discussion pont about WHAT fiduciary capacity a buyer' agent has and HOW that can be misconstrued by Realtors.

I agree with Lenn. When you're dealing with a reputable agent, reputable being the key, then why not benefit from their experience with lenders and inspectors? How many lenders has your accountant dealt with - what were the problems, and did it close on time? How many home inspectors has the stockbroker worked with, to analyze what they find and what they overlook?

I've seen too many cases where a financial advisor, accountant or stockbroker has referred someone just because they belong to a common Leads Group, without checking their abilities.

I've also had lenders, title companies, financial advisors refer good professional, competent REALTORS® because they've seen how they worked and know they're the best of the best.

So, no solution is absolute - it's the integrity of the referring individual that matters. Referrals based on kickbacks or organization affiliations? Not unless you know they're the best!

Good job, Lenn. As Sharon stated, "reputable" is the key word. I agree with everything you said as long as the buyer(s) are dealing with a reputable realtor. Perhaps, the media not only is selling papers but they think most of us aren't reputable. As we all know, there are "those" out there in any occupation...

Maybe it's time for a buyer to sue the media company for giving them advise that can cost tehm thousands of dollars. That would be a fun case to see happen...to bad it never will.

I like the comment you make, Sharon. that says "no solution is absolute".

My discussion point is this? Why put yourself in harm's way when it comes to your fiduciary responsibility? I have seem many cases where Realtors overstep the boundaries of the referral relationship; those relationships are based upon their "goal" which is, of course, to close the transaction ON TIME.

I think in the purest sense of a fiduciary responsibility, you should NOT "direct" 3rd party service providers such as the lender or inspector but advise the buyer of the provisions of the contract and the ramifications of non-compliance; that puts the pressure to perform on the buyer and he( or she) will be responsible for dealing with 3rd party service providers.

But hey, I wasn't born yesterday. Realtors refer deals to "favored" lenders because they adhere to the mantra, "meet the closing date". Mostly, the goal of the referring Realtor and the goal of the lender to whom the deal was referred are consistent with the best interest of the client.

I think my points of discussion are academic and not necessarily practical. I'll echo my kudos to Haron whe she states that "no solution is absolute"

I know down here in Florida, a lot of lenders bait the realtor by providing a 25% compensation package and use ways to bypass RESPA to do this.

Reputable agents and "no solution is absolute" are great points. But what about if your fiduciary responsibility? Is it just to get the loan closed on time (a must anyways)? Or could your referral to loan officer be considered not in the best interets of the borrower.

IMO, anyone who hasn't fully demonstrated their ability to properly integrate the buyer's mortgage into their overall financial plan could deemed as not acting in the best interests of the buyer. This is because it could actually cost them thousands, even hundreds of thousands over time by going with the wrong LO or loan program.

Just a thought.

Amen, Brother Ashby!

NOV

2006

I'd have to disagree with Brian Brady that my goal is simply to "close the transaction on time". I want a transaction that is so successful the client will refer me to all their friends and family.

Just getting it closed on time doesn't come close to what I want to accomplish! And I think that's true of any agent worth their salt who intends to succeed in this business long term. Getting any one deal done is never worth risking your reputation.

I make the referrals I do to the lenders and other professionals I work with because they have a track record of success. They are good at what they do and that makes for happy clients and future referrals.

Julie, I am pleased to see that you are indeeed ethical. All too often, agents trade good pricing for assurance that their "preferred bank" will close the transaction in their rtime frame.

In Southern California, that is the norm rather than the exception.

Good work! We need more like you !

NOV

2006

The print media loves to try and control things - any things - if not the housing market - then the elections.

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