| Donald Khoury |
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| Principal Broker | ||
| Real Estate Services | ||
| 540-347-5777 | ||
| Associate Broker | ||
| RE/MAX Regency | ||
| 540-341-8926 | ||
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| What A REALTOR® Can Do |
Are you representing yourself in this real estate transaction? If so, there is no need to read any further.
However, if you require professional representation, you need to understand the real estate laws in the state. Please contact me at info@realestatephd.com or call me at 50-347-5777.
One of the hot topics facing the world of real estate right now is the issue of agency. Some would have you believe that it really doesn't affect you, the buyer or seller, and that nothing much has changed. But they are wrong. The topic of agency is important to you because it answers the most basic and fundamental question that can be asked of any real estate professional: Who do you represent in this transaction? Until that question is answered, you may be left with the impression that all agents who work with buyers actually represent those buyers, and that you have somebody going to bat for you in this transaction. Well, the issue of agency is important because without it, we can never be sure who represents who.
Read the
scenario: You meet a really nice agent at an open house named Bonnie. Even
though Bonnies' house is not right for you, she tells you she has others to show
you that fit your needs exactly. You spend an hour or so with
Bonnie looking at a half dozen homes and talking about your needs and your
wants. During the course of the conversation,
you volunteer that you have
$100,000 cash to spend and that you will not go over $100,000 purchase price no
matter what. Then you find the perfect house. Asking price is $100,000 but you
decide to offer $92,500 based on recent sales in the area. During negotiations,
the seller asks Bonnie directly how much cash you have and how high will you go?
What does Bonnie say?
Here's the answer: Unless you have signed a "Buyer Agency Agreement" with your buyer agent, (RE/MAX Regency), Bonnie most likely is acting as a sub-agent to the listing broker who represents the seller. If that is the case, she has a fiduciary obligation to the seller to disclose to him any information she has that might "promote or protect his interest" in the transaction. Guess what? Bonnie has that information. The Seller, now having knowledge of your financial position, counters at a full $100,000. He knows you can afford it and that this price falls within your desired range. He also knows that you have seen a number of other homes and that his is the one you want. Regardless of what eventually happens in this scenario, it can hardly be called an even playing field. So, how can you protect yourself from a possible disclosure required of a seller's agent?
1. Make sure that the agent you are working with has agreed, in writing, to represent you as a "Buyer's Agent." This will mean signing a buyer brokerage agreement in which you promise to work only with that particular agent for a specific period of time, often 90 days. It also means that you promise not to buy from anybody else, even FSBOs, without involving your buyer's agent. In almost every case, the commission will still come from the seller, but your agent must present the offer.
2. Never say anything to anybody unless you would be willing to have that information repeated into a seller's ear. Assume that everybody, and I mean everybody, is working for a seller unless you have specifically hired them to work for you. And even then, be discreet. During the second world war, the military promoted a phrase designed to stop idle gossip: Loose lips sink ships! You would do well to adopt that philosophy in your home-buying as well.
By John Adams, Adapted by Donald Khoury of RE/MAX Regency
What Is a REALTOR®?
A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate® -- the world's largest professional association. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. Founded in 1908, NAR has grown from its original nucleus of 120 to today's 720,000 members. NAR is composed of residential and commercial REALTORS®, who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry. Members belong to one or more of some 1,700 local associations/boards and 54 state and territory associations of REALTORS®. They can join one of our many institutes, societies and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice. Working for America's property owners, the National Association provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property.