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The Most Widely Misunderstood Service In Real Estate Today
The Buyer's Agent is probably the most misunderstood real estate service available to today's home buyer. It is essential that every home buyer understands "agency" relationships and how those relationships affect their home buying process. Lack of knowledge in this one area alone could cost you thousands of dollars and will definitely hamper your contractual abilities to a fair and equitable transaction.
The History of Agency Relationships in Real Estate
Prior to 1993 all real estate agents were bound under the common laws of "seller" agency to protect the seller in every transaction. Though the agent helped the buyer look for homes, find a mortgage, and guide them through the contractual process- he/she was at all times bound to the duties of agency as it pertained to the seller.
The old agency law recognized all real estate agents as either agents or subagents to the seller. This was mainly due to the fact that:
- This was the traditional way the real estate profession operated, and
- The seller was responsible for all the commission dollars so it seemed only appropriate to have total representation.
What Caused the Change in Local Agency Laws?
The number one problem that arose from "seller agency" was the fact that disclosure was not prevalent. In other words the buyer not only knew nothing about the property he/she was buying, other than what the seller's agent wanted them to know, but they also didn't realize that "their" real estate agent was really working towards the seller's interests. As a result, many legal cases and lawsuits were brought about due to the fact that the buyer was misinformed about the relationships in the real estate transaction.
In an effort to alleviate the "the buyer beware" structure of the real estate transaction two major changes came about:
- Agency Disclosure and Buyer Agency, and
- Seller's Disclosure
Agency Disclosure, as required by most states, requires the real estate agent to explain to the customer or client (on the first "substantive contact") who they represent in the transaction - The Buyer or Seller. This is to ensure that the buyer understands right away who is or is not on his/her side of the transaction. That way confidential information doesn't get mishandled and conveyed to the wrong party.
The Seller's Disclosure Of Real Property requires the seller to complete a large questionnaire explaining features of the home and problems with the property, if any, (past and present). This too has helped the buyer understand more about the home they are purchasing and the property's history.
Of course all types of new services, inspections and tests, have become available letting the prospective home purchaser examine everything about a specific property. Some of these include:
- * Home Inspection- inspection on the structure itself (incl. systems, building materials, condition of home.)
- * Water & Septic Tests where applicable
- * Radon Gas
- * Mold
- * Pools and Jacuzzi's
- * Buried Oil Tanks
- * Lead Paint
Should I Hire a Buyer's Agent?
The answer to this question is a resounding YES. It's what type of buyer agent that is the difficult question. There are however some general things to be careful of.
- Do not sign an Agency contract until you understand it totally. Be careful how long you are obligated to work with an agent and how they are to be paid. In this day and age it is customary for the agent to accept what the "seller" is offering to buyer agents. This will probably be changing in a few years.
- Make sure you can cancel your agreement at anytime without penalty.
- Your agent should be willing to show you as many homes as you would like to see.
- Some buyer's agents will not show you homes unless that home gives them at least a 3% commission which means you may lose out on finding the right home. Choose a buyer's agent that will show you ALL the homes within your search criteria regardless of the commission.
Why a Written Buyer Agency Agreement?
For your satisfaction and protection. You are about to enter into one of the most important decisions of your life. Your home selection and purchase will not only impact you financially, but it will affect the way you and your family will live, and the lifestyles you will adapt for years to come.
When you hire a real estate professional, you need to understand that realtors are independent business people with business expenses. To accomplish your goals they need to know that their expenses will be eventually covered through the transaction.
Therefore, for your own protection and satisfaction, you want to work only with a real estate professional that is prepared to make a full commitment to you, your goals and your expectations.
Advantages of using Jeff McIntyre:
- Full Representation - You deserve an agent who will protect and promote your interests in a real estate transaction.
- Buyer Expertise - Very successful in getting an offer accepted in a multiple-offer situation for the home and price that you want.
- Current Listings - Receive the most up-to-date MLS Listings as soon as they are entered into the MLS.
- Complete Information - Each listing will have as much information as I have on that home.
- Personalized - Fully personalized search criteria to help locate your dream home.
NOTE: You should be willing to get a bank pre-approval for a mortgage.
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