Representation

The Right Representative Matters!

The most important question property buyers should ask themselves is “How does the home buying process really work?” Starting with the premise, for a property buyer consumer, they don’t know what they don’t know, so questioning the source of guidance becomes the critical first step. The next step involves obtaining a thorough understanding of who represents each party’s best interest in a real estate transaction. In the Multiple Listing Service (M.L.S), there are two major categories of representation, a buyer’s agent and a seller’s agent. Unbeknownst to most consumers, compensation is   offered through the M.L.S directly to a buyer’s agent from the seller and seller’s agent before a property showing. Therefore, usually, buyer agency is a service that does not require an upfront fee as the subsequent buyer and seller agent fees are netted out of the final purchase price and paid at the time of the closing.

 

The Fiduciary Responsibilities of The Agent!

As a property buyer, you may engage a real estate licensee to provide advice, assistance, and representation on your behalf, with fiduciary level responsibility. (Fiduciary: faithful servant or trusted advisor. In a real estate agency relationship, the fiduciary responsibility may include certain legally mandated duties.) The formal definition is: The real estate licensee may represent you as the seller (Seller’s Agent) or represent you as the buyer (Buyer’s Agent) or can assist you as a Facilitator. All real estate licensees, regardless of the working relationship with a consumer, by law, must present properties honestly and accurately and disclose known material defects in the real estate.

 

The duties of a real estate licensee do not relieve consumers of the responsibility to protect their own interests. If you need advice for legal, tax, insurance, zoning, permitted use, or land survey matters, it is your responsibility to consult a professional in those areas. Real estate licensees do not and cannot perform home lead paint, or insect inspections, nor do they perform septic systems, wetlands or environmental evaluations. Do not assume a real estate licensee works solely for you unless you have an agreement for that relationship.

 

Dual Agency!

A real estate licensee may act as a dual agent, representing both the seller and the buyer in a transaction, but only with the express and informed written consent of both the seller and the buyer. A dual agent shall be neutral, regarding any conflicting interest of the seller and buyer. A dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions, which is required of a seller or buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting for funds. Written consent for dual agency must be provided before a potential transaction is identified, but no later than prior to the execution of a written agreement for purchase or sale of residential property.

 

Self-Representation!

Although the Internet has enabled property buyers to become more self-educated about property details, pricing history, and much more, that same access does not necessarily serve them as well for understanding the actual process of buying a property. It would be easy to believe the ease of access to property information via the Internet and a smartphone app would render an agentless useful; however, proper and accurate guidance has never been more important than it is today. There’s too much information regarding properties and little regarding how to build and follow a strategic plan for purchasing a property. Some buyers will have a difficult time overcoming their belief they still have an advantage over an educated real estate agent; however, most buyers should have their interests represented by a competent, resourceful agent, and such services are regularly available without an upfront payment. Proper guidance during one of the largest financial and most emotional transactions most people will ever make in a lifetime is simply invaluable.

 

Conclusion

We realize learning more about choosing a buyer’s agent is a difficult process, so please contact us to discuss the matter further.

 

Understanding you must start the property purchase process by learning how to select proper representation will set up course module #2, where you’ll learn how and why you must secure financing or obtain proof of funds for a cash purchase before writing an offer to purchase.

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