Lately, I have seen a lot of Realtors fishing for home sellers’ through Ads like: I have buyers who want to buy a home in your neighborhood this month….if you’re thinking of selling, please contact me 555-FISH. Hmmm, this guy already has a buyer and I was thinking of selling. I wondered how successful could this be? Turns out in my neighborhood, our top agents represent both parties 10% and 17% of the time over a 2 year period. I guess if you build enough trust people can forget about real protection. The AD could read I am looking for someone ready to sell but I can only provide one buyer, competition is over-rated, but I don’t think as many would call.
In Real Estate the most common legal arrangement is for a listing agent from one company to represent the seller and a buyer’s agent from another company to represent the buyer in a transaction. A separate agent is looking out for each best interest. Some times the price is accepted, separately, by Buyer and Seller in the presence of the same agent. In situations where the price is agreed upon, separately to the same agent, and both parties agree to engage the same Realtor a Dual agency exists. In a Dual agency relationship, the Dual agents’ fiduciary duties to her clients are much more limited. They can no longer be an advocate for either party because each client has opposite goals. The agents’ job is now to shepherd the Transaction through to Closing. Yet many overlook this loss of safe representation because:
Buyer: They want to be in a specific neighborhood and are afraid of the price escalation that comes with competition. They show up first and without a Realtor. They may even solicit home-owners before the sale and end up with the seller agent.
Seller: The home is very difficult to show and they have buyer interest expressed before the sale, a quick sale is needed or wanted.
Agent: With price and condition agreed upon by buyer and seller it is just paperwork to take care of till Closing and more income from one property.
BUT, most problems are not uncovered until financing review for buyers and home inspection of sellers home. When your seller or buyer ask “what’s going on” the Realtor is limited in what they can tell you. This relationship may not help you make the best decision moving forward. When there is a problem who represents you?
Realtor Magazine (NAR) recommends that both parties retain attorneys to advise them regarding the purchase agreement, contingencies, price, earnest money, or other negotiated issues. This can be a win-win for all parties involved since the client will be adequately represented and the attorneys’ participation will take pressure and liability off of the Realtor.
Be smart. Be represented. Reach out to a relocation expert who seeks to represent only you.
Dennis Bell 703-928-4428 firstname.lastname@example.org