25 Quick, Cheap and Easy Home Sale Tips | Realtor Magazine

25 Quick, Cheap and Easy Home Sale Tips

If you want to get a home sold quickly and inexpensively, you should review these sales and design tips.

AUGUST 2012 | BY BARBARA BALLINGER

Even with rising values and reduced inventory in certain markets, selling a home remains challenging. Buyers expect not just a shiny new stainless sink but pruned hedges, freshly painted walls, glistening hardwood floors, and more. Making everything look great can cost a pretty penny, and many sellers won’t be able to afford all the suggestions you might make.

You can help them prioritize based on the condition of what’s needed most, what buyers in the area typically request, what competing houses offer, and — of course — cost. Here’s a list of 25 affordable, easy-to-make changes from top design and real-estate pros:

 

  • Add power outlets with USB ports in rooms that lack them, especially in the kitchen, bathrooms, and bedrooms where they’re most needed. “Younger, more tech-savvy couples and individuals love them,” says Tyler Drew, broker and property investor with Anubis Properties Inc. in Los Angeles.
  • Eliminate acoustic popcorn-style ceilings since they look dated and tacky.
  • Remove exposed posts and half walls. Today’s buyers want more space, and partial walls and posts gobble up room. The only walls that should remain are those that offer privacy or conceal electrical wires or plumbing stacks.
  • Update wiring for the Internet and flat-screen TVs. You don’t have to run CAT-5 through walls, which can be costly and require opening and closing and repainting walls. Instead, find a place to put a wireless router, Drew says.
  • Clean carpets and wood floors since they’re often the first part of a room that buyers check out; you don’t need to replace them unless they’re in terrible shape. A good carpet steam cleaning or wood floor waxing can be relatively inexpensive, sometimes less than $200.
  • Expand a small kitchen to make it work better and look larger. Two quick fixes: Change the backsplash by adding mirrors, stainless steel, or paint, which will introduce light and views; and add an island, which requires only 30” between counters and the island to pass through comfortably. If there’s not enough room for an island, bring in a rolling cart with pull-out shelves underneath and a wood top, says Libby Langdon, an interior designer, author, and expert with Liebherr Refrigeration..
  • Clear out and clean a garage, a big selling feature.Power wash the floor or paint it if it’s in bad shape, remove dated cabinets, and remove all junk that’s been stored there, so prospects can see how much space they would have for their stuff.
  • Change out corroded or dented door knobs and levers. The replacements don’t have to be expensive but they should look new and clean, Chicago architect Allan J. Grant suggests.
  • Pay attention to landscaping, which can add 7 to 15 percent to a home’s value, according to HabitatDesign.com principals Jessy Berg and Bonnie Gemmell. Focus on mowing grass, removing crab grass, and eliminating dead plants and tree branches. “I’d rather have dirt and the potential to paint a picture for the buyers’ mind than a backyard full of dead plants,” Drew says. But if you have extra funds, consider Sacramento, Calif.-based landscape designer Michael Glassman’s ideas: Add lots of seasonal color through blooming annuals and perennial plants and remove problems like too much noise from traffic or neighbors by installing an inexpensive fountain with trickling water.
  • Paint exterior windows, doors, gutters, downspouts, and trim, then go inside and paint the home’s trim, doorways, and walls that are in need of freshening. Don’t worry about the colors but consider those that veer toward quiet and comfort such as Benjamin Moore’s Yosemite Sand, Edgecomb Gray, or Carrington Beige. “Gray is a hot interior color now,” says Manchester, Vt.-based designer Amy Thebault. Painting rooms other, lighter colors such as white, yellow, and beige help to bounce and reflect sunlight and use more natural and less artificial light, according to Chris Ring, vice president at ProTect Painters, a professional painting source. But in cooler months, Ring says, dark colors such as deep brown and blue absorb sunlight, thereby reducing heating costs. And don’t forget ceilings, which can be a “fifth wall.” You can improve them with paint or old-style metal or faux-metal tiles, says Beverley Kruskol, a general contractor and owner of MY Pacific Building Inc. in Los Angeles.
  • Remove outdated wallpaper, replacing it with paint and preferably a neutral color, says Shelley Beckes, ASID, CID, a designer with Beckes Interior Design in Los Angeles.
  • Remove, store, or discard excessive accessories on tabletops and walls and in cabinets. “Less is more, and you want the house to be seen by prospective buyers without the distraction of too many personal items,” Grant says. Some suggest following the rule of three: Leave out only three things on any surface.
  • Get the house inspected before it’s listed to know its condition and identify any structural issues that could derail sales. Many problems can’t be detected by an untrained eye, including those in a basement, crawl space, or attic, says BillJacques, president-elect of the American Society of Home Inspectors. “There might be roof damage or a plumbing leak. Many inspectors take photos and provide a detailed report,” he says. “And if home owners have repairs made, they should be handled by a qualified licensed contractor, so the home owner can get problems corrected.”
  • Outfit closets for extra storage to make rooms look larger and less cluttered, but don’t redo all closets and elaborately. Top contenders for redos are an entry closet for a good first impression, kitchen pantries where storage is key, and a linen closet to keep sheets, towels, and other stuff neat, says Ginny Snook Scott, chief design officer at California Closets Co. “The costs needn’t be excessive. A linen closet can be fitted with baskets and cubbies for between $500 and $600, an entry closet for between $400 and $700, each dependent on closet size and features,” she says.
  • Tighten a home’s “envelope” to improve energy efficiency and savings. Put money and effort into well-insulated double-paned windows, sealed furnace ducts, energy-efficient appliances, the newest programmable thermostats, LED and compact fluorescent lights, and a smart irrigation box on a sprinkler to cut water usage, says Kate Latham, energy consultant with WattzON, a service based in Mountain View, Calif., which analyzes home energy use to pare costs. “After a few months, sellers can show buyers how costs have dropped. They also should put together a green manual to show which features they added,” she explains.
  • Improve a home’s healthfulness by using paints and adhesives with low or no VOCs. Point out these changes to prospective buyers in another list or manual, Latham says.
  • Use what you have, and arrange each room in a conversational way if possible.Don’t set all furnishings in a family room so they face a TV, since most potential buyers like the idea of an open-room milieu for socializing.
  • Remove and replaced faded draperies, fabrics, and rugs, or leave windows and floors bare to avoid showing lack of attention, Thebault says. Slipcovers, which can cover worn furniture can also provide an affordable decorative feature, changed for each season, says Hugh Rovit, CEO ofSure Fit, a manufacturer and distributor of ready-made slipcovers and other accessories. The company’s slipcovers range from $49.99 to $149.99, based on fabric and treatment.
  • Replace old, dated, or worn bedding. Before any showing, fluff up pillows and covers, and make all beds neatly. Affordable choices can be found at stores like Target and Web sites likeOverstock.com.
  • Toss out old magazines. “You don’t want a People magazine from a year ago; it looks like nobody lives in the house or cares,” Thebault says.
  • Check smells regularly. Besides getting rid of bad odors from pets and mildew, introduce nice fresh fragrances, but don’t go heavy on scents from candles. A light lavender or citrus spray is smart and inoffensive. Open windows before showings to bring in fresh air.
  • Make rooms lighter and larger for showings with good lighting. Thebault prefers warm, cool colors rather than fluorescents. Additionally, 60-watt bulbs are a good choice, even though they’re not as energy-efficient.
  • Go with plants rather than flowers indoors since they last longer, but either choice can add vivacity to a room.
  • Pay attention to your bathrooms. Specifically, make sure you have freshly laundered towels, new soap in soap dishes, spotless mirrors, and no mildew in view.
  • Be sure your house is priced competitively with the current market and homes in your area. In most regions, it’s still the No. 1 “fix” to sell quickly. Go a bit under the market price, and you may even bring forth multiple offers that are higher than expected, says Jill Epstein, a REALTOR® with Nourmand & Associates in the Los Angeles area.

via 25 Quick, Cheap and Easy Home Sale Tips | Realtor Magazine.

How a Dual Agent Affects Sale Prices – WSJ

How a Dual Agent Affects Sale Prices

Having an agent represent both buyer and seller can either raise or reduce the final selling price, depending on the timing of the transaction

By SANETTE TANAKA

Jan. 23, 2014 9:02 p.m. ET

Would you trust a dual agent?

Dual agency occurs when the same brokerage firm—and sometimes the same real-estate agent—represents both the buyer and the seller in the same transaction. Dual agency can increase or reduce a house’s sale price, depending on the timing, says Bennie Waller, professor of finance and real estate at Longwood University in Farmville, Va., who studied dual agency in home sales.

Dual-agency sales that occur in the first 30 days of the listing contract sell for roughly an 18% premium because agents may be able to more efficiently match the property with the right buyer if they search within their own network, Prof. Waller says.

Over time, that information advantage diminishes as other agents learn more about the seller and property, says Raymond Brastow, professor of economics at Longwood University, who co-wrote the study. By the end of the listing contract, the agent’s priority is getting the property sold before the contract expires. Dual-agency sales during the last 30 days of the listing contract sell for roughly a 6% discount, or $9,300 less. Overall, a dual-agency representation reduces sale prices by about 1.7%, according to the study.

Real-estate agents have a lot to gain from dual agency. The seller typically pays 5% to 6% of the sale price as commission, which is split between the buyer’s agent and seller’s agent. Thus, agents have an incentive to represent both sides of the transaction and earn the entire commission, Prof. Waller says.

That may also mean an agent might encourage sellers to accept a lower price for a home to get the double commission, says Prof. Brastow. “You have the interest of the buyer, the seller and the agent, and it’s unlikely all three will coincide, especially in respect to price. They can’t,” he adds.

Prof. Waller and Prof. Brastow examined 12,549 transactions between January 2000 and June 2009 in a central Virginia multiple-listing service. They analyzed which transactions were dual agency or non-dual agency and looked at effects on sale price and time on the market. The study, “Dual Agency Representation: Incentive Conflicts or Efficiencies?” was published in the Journal of Real Estate Research in June 2013.

Many states allow true dual-agency relationships, in which the agent represents, and has a fiduciary duty to, both the buyer and seller. Some states, however, have modified versions of dual agency, such as letting transaction agents act only as deal facilitators, says Ilona Bray, real-estate editor for Nolo, a publisher of consumer legal guides in Berkeley, Calif.

In general, Ms. Bray warns against dual agency. “A buyer and a seller are in very different parts of the transactions. Their interests are different,” he says.

But some agents say dual agency is more efficient and effective. Sometimes they will accept a lower commission from the seller. Also, both sides benefit from having one point of contact, says Jud Henderson of Callaway Henderson Sotheby’s International Realty in Princeton, N.J., who was a dual agent in three transactions last year. “It can work to disarm the process, cut out the politics and just focus on the terms of the transaction,” he says.

Last May, he received two offers for a $1.995 million listing from one of his buyers and another agent’s buyer. The seller ended up selling the property for just under the asking price to Mr. Henderson’s buyer.

via How a Dual Agent Affects Sale Prices – WSJ.

Will I Make More Money if My Listing Agent Also Represents the Buyer? – Research Center | Redfin

by Glenn Kelman | February 14, 2012

A surprising number of U.S. listings – about 1 in 10 — are sold by a real estate agent who also represents the buyer. How, we wondered, does this work out for the seller who originally hired the real estate agent?

Dual Agency Costs the Seller $4,789 On Average

To answer that question, Redfin’s real estate analyst Tim Ellis dug up every sale from January 1, 2011 – December 1, 2011 across 22 counties in nine different states — over 230,000 records in all. The results were remarkably consistent:

In every county we measured, the discount off list price was much larger when the seller’s agent also represented the buyer.

The average discount off list price was worse by 1.6 points with dual-agency sales, which is the industry term for a transaction where the listing agent represents both sides:

 

DiscountDualAgency

For a $300,000 home, dual agency cost the seller $4,789. The consistency across all 22 counties surprised us almost as much as the magnitude of the disparity in outcomes:

County Dual Agency
Avg. Sale to List Ratio
Different Agents
Avg. Sale to List Ratio
Difference Difference in Dollars for $300,000 Home Percent of Sales
That Were Dual Agency
Arlington County 96.5% 97.9% -1.4% -$4,161 8.1%
Baltimore City County 92.2% 94.3% -2.1% -$6,171 14.9%
Clark County (Nevada) 95.9% 98.1% -2.2% -$6,561 5.2%
Cook County 92.4% 94.8% -2.4% -$7,113 8.0%
Denver County 96.2% 96.6% -0.5% -$1,414 10.4%
District of Columbia 96.7% 97.7% -1.0% -$2,942 10.4%
Fairfax City County 97.4% 98.1% -0.7% -$2,187 5.3%
Fairfax County 96.9% 98.1% -1.2% -$3,553 6.6%
Fulton County 93.6% 94.7% -1.1% -$3,397 7.5%
King County 96.0% 97.1% -1.1% -$3,426 6.2%
Los Angeles County 97.1% 98.0% -0.9% -$2,674 12.6%
Maricopa County 95.0% 97.4% -2.4% -$7,285 7.1%
Multnomah County 95.0% 97.1% -2.1% -$6,175 5.8%
Orange County 96.7% 97.5% -0.7% -$2,233 12.7%
Queens County 92.8% 93.7% -0.9% -$2,768 34.5%
Sacramento County 96.9% 98.2% -1.3% -$3,781 8.5%
San Diego County 95.9% 97.4% -1.4% -$4,280 9.3%
San Francisco County 97.3% 99.1% -1.7% -$5,178 9.4%
San Mateo County 96.5% 98.2% -1.7% -$4,956 8.7%
Suffolk County, MA 95.6% 96.4% -0.8% -$2,486 13.3%
Travis County 95.1% 96.5% -1.4% -$4,248 4.9%
Philadelphia (Market) 91.2% 94.7% -3.5% -$10,608 13.1%
Average: 95.6% 97.2% -1.6% -$4,789 8.9%

Many brokers treat dual agency as a choice the buyer makes, at his own risk, assuming the seller would never have reason to complain about how a buyer is represented. But in fact the damage done is to the original client of the dual agent, the seller.

Is the Difference Because Dual Agency is More Common Among Foreclosures? Nope.
We wondered if the results were correlated with distressed sales, since banks seemed less likely to notice dual agency than a typical home-seller.

But it turns out the prevalence of dual agency is actually higher among traditional home-sellers, not banks. And the outcomes were the same: both traditional home-sellers and banks got significantly worse prices when the buyer did not have his own agent.

Is Dual Agency Even Legal? Mostly, Yes

Concern for the seller is why at least eight states have attempted to outlaw dual agency.

In Alaska, an agent can act as a Neutral Licensee, providing a limited set of services to buyer and seller without representing either side. In Colorado, an agent who starts off as an agent for the seller can meet a buyer and become, with the seller’s permission, a Transaction Broker. A Transaction Broker carries out the deal on behalf of both parties but with  no fiduciary obligations to either side.

Florida, Kansas, Oklahoma also allow Transaction Brokers. Texas allows an agent to act as an intermediary between buyer and seller, not fully representing either, and Vermont allows Limited Agency, in which the agent represents both parties but with very narrow responsibilities to either.

In Maryland, one agent cannot represent both parties, but an agent can represent the seller while still collecting the commission reserved for the buyer’s agent, so long as he doesn’t provide the buyer any advice. In Maryland in particular, it is the seller who loses at the negotiating table in these situations, more than 2% on average of the total home value.

So all of these arrangements are not, regardless of what you call them, usually in the seller’s best interests. The official responsibilities of a transaction broker, neutral licensee, or limited agent differ from the original duties of an agent, but no one else performs the essential duty of the seller’s agent, which is to sell the house for the best possible terms.

For this analysis, we considered any transaction an example of dual agency if the Multiple Listing Service used by agents to record transactions listed the same agent as representing buyer and seller. In a separate analysis, we’ll take up designated agency, in which buyer and seller are represented by two different agents working at the same brokerage.

But Don’t You Also Save Money by Paying Only One Agent? Yep (But Not Enough)
But wait! Is dual agency all bad?

The advantage of one agent bringing together both sides is, of course, efficiency, since you avoid having to pay two agents. Some listing agents will collect the full commission normally due the buyer’s agent as well as their own listing commission, eliminating any efficiencies or savings.

But some will refund a portion of the fee offered to a buyer’s agent. A seller can save 1% or even 1.5% of the total value of the home in commissions; in an extreme case this is almost worth as much as the 1.6% a seller will on average give up at the negotiating table.

But if you’re the seller, the commission savings probably isn’t worth worrying about a conflict of interest with your agent. Even if you get a good price, you’ll need that agent’s advocacy beyond the initial negotiation: when the inspection turns up problems the buyer wants you to fix, or when you need an extra two weeks to move out.

If your agent also has a relationship with the buyer, and a stake in your working with that buyer over others, it becomes harder for the agent to function as an impartial guide to the deal best for you. It may be harder for you to feel like someone’s really watching out for you and you alone.

This is why almost no real estate agent would argue that dual agency or its equivalent is better for the home-seller; the only debate is about the extent to which it does or does not damage the seller.

Where Is Dual Agency Most Common?
What was most surprising to us was how often dual agency and its equivalent occurs. It isn’t just the occasional menage-a-trois: in Baltimore, the seller’s agent is listed as the buyer’s agent in 15% of all sales. In Queens, it’s 34%. Across the 22 counties we surveyed, it was 9%:

DualAgencyPrevalence2a

By contrast, among Redfin’s 10,000+ clients, dual agency or its equivalent has never happened. We also don’t allow dual agency among our partners.

How to Have Your Cake and Eat It Too
So what does this mean for you as a seller who isn’t using Redfin? Should you turn away a buyer, just because your agent also wants to represent him? Of course not, especially in an age when less than half of all listings sell.

If your agent meets a buyer, he can refer the buyer to another agent or — if you want to avoid paying two commissions – a lawyer, so that both sides have an advocate.

No agent would put a sale in jeopardy by refusing to refer the buyer to someone who can represent his interests. No buyer will hesitate to buy a house simply because the buyer has to get his own agent or attorney.

An even simpler solution is to head this issue off at the pass; the language allowing dual agency is optional in most listing agreements, so your agent can easily use a form that precludes dual agency.

You can also raise the issue in a listing consultation, asking how the agent will handle a situation in which he himself meets a buyer. In my experience, the best agents at traditional brokerages dislike dual agency, though attitudes also vary by market.

Regardless of the prevailing attitude among agents, at a time when 100,000 people will soon be signing listing agreements, one of the simplest ways to ensure you get the best terms is to ask that your agent is committed exclusively to you.

A Series on Data-Driven Best Practices for Home-Sellers

This essay is part of a series that takes a scientific approach to selling homes for more money, faster, with less risk. As listing agents ourselves, we use what we learn to help our clients make better decisions. We also share that with other agents and consumers.

Recently we’ve discussed what season to list your home (surprisingly, winter), which day of the week it should debut (Friday), and whether professional photography is worth it (absolutely).

This has turned out to be very handy information: the vast majority of listings come to market too late, in spring and summer; only 19% debut on a Friday; only 15% feature professional photography.

If there are other analyses you’d like to see us undertake, leave a request below and we’ll dig into it soon.

[Note: This post was updated to reflect a correction in our calculation of what percentage of sales were dual-agency in each market. The sale to list ratios were unaffected.]

via Will I Make More Money if My Listing Agent Also Represents the Buyer? – Research Center | Redfin.

Dual Agency | Realtor Magazine

Dual Agency

Duties in conflict

JULY 2003 | BY LYNN MADISON

Representing the buyer and the seller in the same transaction, also known as disclosed dual agency, gives you the flexibility to assist both parties and can reduce the adversarial atmosphere of negotiations. On the other hand, it means full representation isn’t available to either the buyer or seller. And because dual agency isn’t always fully understood by salespeople or consumers, it can lead to misunderstandings and liability.

Because of the potential for conflicts of interest inherent in the disclosed dual agency relationship, buyers and sellers must understand its implications and give their informed consent to the relationship.

For salespeople who practice dual agency, one of the biggest challenges is keeping price and motivation confidential on both sides of the transaction so that neither buyers nor sellers lose their bargaining position.

Disclosed dual agency is legal in most states. However, nondisclosure or improper handling of dual agency can result in substantial legal liability, such as the $200,000 settlement in a 2002 Alaska case in which the salesperson didn’t properly disclose a dual agency relationship (Columbus v. Mehner).

Even with proper disclosure, many dual agents find themselves in complex situations in which it’s difficult to know how best to serve both the buyer and the seller. Consider these familiar scenarios, and recommendations for dealing with them:

You attend the home inspection with your buyer and even though you let the inspector lead the way, you overhear the buyer saying things like, “That’s fine; I can take care of that myself” or, “No problem; my brother’s a carpenter.” The buyer and his attorney list those same items as repairs they want the seller to make, but you know the buyer probably doesn’t really need the repairs.

Recommendation: Although the buyer may be using the repairs as a negotiating ploy, as a dual agent you really have no choice but to relay the buyer’s repair demands to the seller.

You receive an offer from a buyer client on your own listing. When you present it to your seller, he asks about the other buyers who looked at the property in the last few days: “Please call all their agents to see if their buyers are interested.” The seller won’t move forward with the offer until you do. Your buyer really wants this house and has asked you to let him know if there are any other offers. Yet the seller has instructed you not to tell the buyer if another offer comes in for fear it will cause him to walk away.

Recommendation: The savvy dual agent can head off this type of situation by learning early on how the seller wants to handle multiple offers. Then, make sure to inform your buyer of the seller’s plan for addressing multiple buyers up front, before the buyer makes an offer.

You have two sets of buyers interested in your listing. You sign an agency agreement with the first set but refer the second set of buyers to another agent. The buyers you referred say they don’t want to work with another agent because they feel the first buyers would have a negotiating advantage working with you.

Recommendation: You may hate to lose both sides of the sale, but the best alternative is to refer both buyers to other salespeople and represent only the seller in the transaction.

Protect yourself

The only sure way to avoid conflicts arising from disclosed dual agency is to not practice this form of agency. However, there are steps you can take to protect yourself and lessen potential conflicts.

Do:

Give buyers information about the property.

Disclose all material defects.

Help the buyers compare financing alternatives.

Provide information on comparable properties so that both parties may make educated decisions on the price.

Don’t:

Disclose confidential information about either client without permission.

Recommend or suggest a price to either party. Do a comparative market analysis and let the parties decide for themselves.

Disclose the lowest price the seller will take for the property or the seller’s financial position without permission.

Disclose the highest price the buyer will pay for the property or the buyer’s financial position without permission. (May not apply in Arizona. Check with your local counsel.)

Following these simple rules won’t guarantee that you’ll never get caught in a disagreement between buyers and sellers in a disclosed dual agency relationship. But it’ll give you the protection of knowing you did your utmost to serve both parties fairly.

via Dual Agency | Realtor Magazine.

Working With a Dual Agency: What You Need to Know | Fox Business

Working With a Dual Agency: What You Need to Know

By Donna FuscaldoPublished June 12, 2013FOXBusiness

REUTERS

With a housing market favoring sellers, buyers are resorting to different tactics to get their offer accepted.

Home sales and prices have been on a steady increase over the last few months as the market remains on a stable path of recovery, but low inventory in some markets have created stiff competition—with some areas reporting bidding wars.

To help compete, some buyers are incentivizing agents by offering them the opportunity to represent them as well as the seller. Under these circumstances, dual agents get the full commission as both buyer and seller.

“One of the best ways to convince the listing agent to take a somewhat- less qualified offer is to let them represent you and give them the commission as well,” says Eric Tan, a RedFin listing agent in Los Angeles. “A lot of buyers are catching on to this.”

In certain real estate markets around the country, inventory is tight and houses are selling above market price. On top of that, foreign investors are jumping into the market and making all-cash offers. If buyers can lure the real estate agent into their corner, experts say the commission potential could help them win a home—even if they don’t have the best offer.

While it could work in winning a home, working with a dual agent or agency may not always be in the best interest of both the buyer and the seller. After all, if the real estate broker is representing both the buyer and the seller, each party will never fully know whose corner the agent is actually in.

“In very rare circumstance the dual agency makes sense,” says Tan. “We’ve done a lot of market research and according to the data, on average you lose about $5,000 in the sale of a home when you use a dual agency.”  Even though buyers are losing money, RedFin’s survey, which was conducted last year, found that one in 10 homes in the U.S. are sold by a dual real estate agency.

Although real estate agents are required by law to disclose if they represent both the buyer and the seller, but often that disclosure isn’t so black and white. Every state has its own laws regarding dual agencies according to John Murphy, a realtor in Plymouth, Minn., and that buyers and sellers will often run into dual agencies when dealing with big brokerage firms.

“Real estate is a very entrepreneurial environment and is perfect for small brokers. There are many that are out there, but there also continues to be consolidation like we see in many other industries where the big brokers continue to get bigger and bigger,” says Murphy.  “It’s in the big broker environment where you run in to dual agency situations.”

Even in situations where the dual agent is disclosed, home buyers aren’t necessarily informed on what this means. Murphy says he sees a lot of dual listings with new construction sales since most buyers are so focused on purchasing a home and will make sacrifices.

In Minnesota, Murphy says dual agents would go from fully representing one party to having limits placed on the representation of both. For example, agents aren’t allowed to argue to benefit one party over the other. “It is like a boxing match where we would move from being the coach in the corner giving explicit guidance, direction and coaching to our boxing client to becoming the referee where we have to remain impartial, says Murphy. “ I don’t think real estate consumers fully understand this aspect of real estate.”

Going with a dual agent arrangement makes a lot of sense for buyers looking for an edge, but in a normal real estate market, critics advise homebuyers to avoid that situation if at all possible.

“In today’s market, where the dual agency method can get the property it’s tough to avoid the dual agency but it really does harm the system,” says Tan.  “You jeopardize the rights of the buyer and the seller. You’ll never know if you really got a good deal.”

via Working With a Dual Agency: What You Need to Know | Fox Business.

Why you should never agree to ‘dual-agency’ by a REALTOR

Why you should never agree to ‘dual-agency’ by a REALTOR

Posted on March 3, 2015 08:22 AM by Andy Pierobon

“Dual-agency” is when a REALTOR® or a broker is neutral in the sale and purchase of a home.  That means the REALTOR® represents neither the buyer nor the seller. I’m writing here to say up front why you should never, ever, agree to be represented by a dual agent, although it is legal in Virginia.

Quite simply “dual agency” is a conflict of interests (sic) for the buyer, seller and the REALTOR®.  I refuse to serve as a dual-agent because I feel strongly each party deserves and needs independent advice in what is one of the most important transactions of his/her life.   It’s part of my DNA to exclusively represent just one party in each transaction. Read on to understand why.

IMAGE CREDIT: Compass Commercial Real Estate, Bend, OR

Below are excerpts from the text of the “DISCLOSURE OF DUAL AGENCY OR DUAL REPRESENTATION  IN A RESIDENTIAL REAL ESTATE TRANSACTION” used in Northern Virginia. After reading them, ask yourself why, with the complex issues that may arise in the purchase or sale of your home, you would ever agree to be write a contract with someone who cannot advise you on what is in your best interest.

Here are excerpts of what you would be agreeing to by signing a form authorizing dual representation by your agent or broker:

“ … that the foregoing dual agent or dual representative may not disclose to either client any information that has been given to the dual agent or representative by the other client within the confidence and trust of the brokerage relationship except for that information which is otherwise required or permitted . . . to be disclosed” by the Code of Virginia.

 

“That following the commencement of dual agency or representation, the licensee (REALTOR) cannot advise either party as to the terms to offer or accept in any offer or counteroffer; ”

“ That the licensee cannot advise the buyer/tenant client as to the suitability of the property, its condition . . .and cannot advise either party as to what repairs of the property to make or request;”

“ That the license cannot advise either party in any dispute that arises relating to the transaction;”

“That the licensee may be acting without knowledge of the client’s needs, client’s knowledge of the market, or client’s capabilities in dealing with the intricacies of real estate transactions.”

Don’t assume that a broker or agent is obligated to represent your interests, and your interests alone, until you have carefully read the agreement(s) detailing which services are being provided to you.

A quick note about the transaction brokerages that have sprung with via the Web and Internet: they may have no fiduciary relationship to the buyer or seller. It’s not just ‘buyer beware,’ but ‘seller beware’ too – in the same transaction no less!

Whew! Enough of this legal stuff. Happy Home Selling and House Hunting!

via Why you should never agree to ‘dual-agency’ by a REALTOR.

Office of General Counsel-Dual Agency

BE WARY OF DUAL AGENCY

With the growing number of very large and widespread brokerages, the issue of dual agency arises more frequently than ever before. Any purchaser, seller, lessor or lessee confronted with a dual agency issue by their real estate agent should not take the issue lightly. Parties to a real estate transaction, including real estate brokers and salespersons themselves, seldom realize the inherent problems of a real estate agent acting as a dual agent.

Dual agency arises when a real estate broker or salesperson represents adverse parties (e.g., a buyer and seller) in the same transaction.

Dual agency typically arises in the following way: a real estate broker employs two salespeople, one who works for the buyer as a buyer’s agent and the other who works for the seller as a seller’s agent. The real estate broker and his salespeople are “one and the same” entity when analyzing whether dual agency exists. As soon as the buyer’s agent introduces the buyer to property in which the seller is represented by the seller’s agent, dual agency arises.

Dual agency can also arise in a more subtle way: A real estate broker who represents the seller procures a prospective purchaser who needs to sell her property before she is able to buy the seller’s property. The prospective purchaser then signs a listing agreement with the real estate broker to sell her property so that she can purchase the seller’s property. The real estate broker is now a dual agent representing both parties in a mutually dependent transaction.

When you employ a real estate broker or salesperson as your agent, you are the principal. “The relationship of agent and principal is fiduciary in nature, ‘…founded on trust or confidence reposed by one person in the integrity and fidelity of another.’ (citation omitted) Included in the fundamental duties of such a fiduciary are good faith and undivided loyalty, and full and fair disclosure. Such duties are imposed upon real estate licensees by license law, rules and regulations, contract law, the principals of the law of agency, and tort law. (citation omitted) The object of these rigorous standards of performance is to secure fidelity from the agent to the principal and to insure the transaction of the business of the agency to the best advantage of the principal. (citations omitted).” (Emphasis added) DOS v. Moore, 2 DOS 99, p. 7 (1999)

“A real estate broker is strictly limited in his or her ability to act as a dual agent: As a fiduciary, a real estate broker is prohibited from serving as a dual agent representing parties with conflicting interests in the same transaction without the informed consent of the principals. (citations omitted) ‘If dual interests are to be served, the disclosure to be effective must lay bare the truth, without ambiguity or reservation, in all its stark significance.’ (citation omitted)

‘Therefore, a real estate agent must prove that prior to undertaking to act either as a dual agent or for an adverse interest, the agent made full and complete disclosure to all parties as a predicate for obtaining the consent of the principals to proceed in the undertaking. Both the rule and the affirmative [defense] of full disclosure are well settled in law.’ (citation omitted)” Id. at pp. 9-10.

In a purchaser/seller transaction in which dual agency arises, the agent must not only clearly explain the existence of the dual agency issue and its implications to the parties, the agent must also obtain a written acknowledgment from the prospective purchaser and seller to dual agency. That acknowledgment requires each principal signing the form to confirm that they understand that the dual agent will be working for both the seller and buyer, that they understand that they may engage their own agent to act solely for them, that they understand that they are giving up their right to the agent’s undivided loyalty, and that they have carefully considered the possible consequences of a dual agency relationship.

The fiduciary duty of loyalty that your real estate agent owes to you prohibits your agent from advancing any interests adverse to yours or conducting your business to benefit the agent or others.

Significantly, by consenting to dual agency, you are giving up your right to have your agent be loyal to you, since your agent is now also representing your adversary. Once you give up that duty of loyalty, the agent can advance interests adverse to yours. For example, once you agree to dual agency, you may need to be careful about what you say to your agent because, although your agent still cannot breach any confidences, your agent may not use the information you give him or her in a way that advances your interests.

As a principal in a real estate transaction, you should always know that you have the right to be represented by an agent who is loyal only to you throughout the entire transaction. Your agent’s fiduciary duties to you need never be compromised.

via Office of General Counsel.

Never Agree to Dual Agency | CAARE – Consumer Advocates in American Real Estate

Never Agree to Dual Agency

Dual agency means serving two masters.  No other profession is permitted to routinely engage in this practice that most professionals feel should be banned (see our attorney survey on this topic).  No other profession has special laws written for them that automatically reduces their liability in these relationships. And real estate agents are perhaps the least qualified to handle this conflict.  Dual agency occurs when real estate agents represent both the buyers and sellers on the same transaction.  When that happens real estate brokers collect a double commission and  they are prohibited from doing anything to the detriment of either party.  That means that they can not help you negotiate price or terms of your real estate transaction.  It means that they are getting paid twice as much for doing a tenth of the work.

Dual Agency is a conflictive relationship that strips buyers and sellers of service to a level that can best be described as abandonment. Dual agency arises when the real estate broker is representing both the buyer and the seller. It is illegal in every other fiduciary profession except under the most extreme circumstances. It is routinely practiced in residential real estate where there is the least amount of training. When a real estate broker engages in dual agency they may not work to the advantage or the detriment of the buyer or seller. In other words, all the reasons you hired your broker vanish – often with little warning.

Dual agents are legally prevented from negotiating price or terms (two of the most important reasons consumers hire Realtors). And perhaps the biggest problem with this betrayal is that it usually presents itself with little warning to the client – it is a bait and switch. The broker could be acting in the client’s best interests all the way up to finding the house that creates a dual agency. At that point the buyer or seller are on their own.

In a dual agency, brokers don’t have to share the commission with other brokers so they make twice as much money. They profit greatly from this practice. Realtors, who typically have no understanding of the legal ramifications of their own fiduciary relationship with their clients, often illegally counsel their clients of the so-called “benefits” of dual agency. We’re here to tell you that there are NO benefits and that you should NEVER agree to dual agency. Find a small brokerage firm with highly qualified real estate agents and demand that they not engage in dual agency. The likelihood of dual agency arising with a smaller firm is far less than with a large firm.

via Never Agree to Dual Agency | CAARE – Consumer Advocates in American Real Estate.

Never Agree to Dual Agency Representation

NEVER AGREE TO DUAL AGENCY REPRESENTATION

Written by Loren Hoboy on Sunday, 20 October 2013 2:11 pm

Dual agency occurs when real estate agent represent both the buyer and seller on the same transaction. This occurs when a Buyer goes to a builder’s showroom and talks to one of their sales people, or when you call a Seller‘s agent directly from a sign or ad to view a home you are considering.  It also occurs when you buy a house listed with the same Real Estate Brokerage company that your agent represents.

Dual agency means the Realtor is serving two masters. Other professionals like lawyers are not permitted to engage in this practice.  Many real estate agents are not experienced and qualified to handle this conflict. It is illegal in every other fiduciary profession except under the most extreme circumstances.   Under Dual Agency, real estate agents/brokers collect a double commission and theoretically they are prohibited from doing anything to the detriment of either party.

Dual agents are legally prevented from negotiating price or terms (two of the most important reasons consumers hire Realtors). Dual Agency is a conflict relationship that strips buyers and sellers of the Realtor’s service to a level that is essentially abandonment. It means that they are getting paid twice as much for doing much less work. In other words, all the reasons you hired your broker vanish – often with little warning. The broker could be acting in the client’s best interests all the way up to finding the house that creates a dual agency. At that point the buyer or seller are on their own.

Instead, when you use only an independent Buyer’s Agent they have a fiduciary duty to serve only your best interests.   With Dual Agency representation you are taking a much higher risk.

Realtors, many who typically have little or no understanding of the legal ramifications of their own fiduciary relationship with their clients, can illegally counsel their clients of claimed “benefits” of dual agency or that it is “Not a Problem” as they ask you to sign the Dual Agency waiver. There are NO benefits to dual agency and you should NEVER agree to dual agency. In my opinion, find a small brokerage firm with highly qualified real estate agents and insist that they not engage in dual agency. The likelihood of dual agency arising with a smaller firm is far less than with a large real estate firm.

AVOID DUAL AGENCY-DO NOT SIGN THE DUAL AGENCY AGREEMENT- GET A TRULY INDEPENDENT REAL ESTATE AGENT TO REPRESENT YOU!

via Never Agree to Dual Agency Representation.

Getting Started – The Exclusive Agent – Connecticut

Making It Exclusive: Signing With an Agent

SEPT. 14, 2012

By JIM RENDON

CHOOSING a real estate agent for selling a home may seem simple, but there is much to understand about the role of the agent and how the relationship works. And the stakes are high — the sale of what is likely the owner’s most valuable asset.

In New York City, when a seller agrees to work with a real estate agent, the seller is giving that agent’s company an exclusive right to sell the home, typically for a six-month period. Potential buyers must go through the agent to see the home and the agent is guaranteed a commission if it sells.

The agent often pays for professional photographs, copywriting or videos. The agent’s duties include advertising the property, fielding offers, handling negotiations and working with prospective buyers to gain approval from the co-op board.

“Agents want some assurance that at the end of the process they will be compensated for their work,” said Jeremy Cooper, a partner at Cooper & Cooper Real Estate, a Manhattan firm.

Before signing a contract, sellers must first sign a disclosure form that explains the various relationships between buyer, seller and agent. It also gives consent for dual agency, which means that one firm or even one agent may wind up representing both the buyer and seller.

That can be an odd situation. The agent must advocate for both the seller and the buyer without benefiting one party over the other, said Neil Garfinkel, legal counsel for the Real Estate Board of New York and a partner at the law firm Abrams, Garfinkel, Margolis, Bergson. If, for example, the seller is getting divorced and needs to sell quickly, the agent cannot disclose that information to the buyer even though it could work to the buyer’s advantage, he said. Some brokers have noted that in such circumstances, neither the seller nor the buyer really has the full allegiance of the broker.

Exclusive agreements can have exceptions, Mr. Garfinkel said. If someone has expressed interest in an apartment before an agent comes on board, the seller can exclude that person from the exclusive agreement. This means that if that person buys within an agreed-upon period of time, the seller either does not have to pay a commission or the commission is reduced.

In addition, if the home has not sold at the end of an exclusive period and the seller chooses a new firm, the first agent can submit a list of up to six people who expressed interest in the property during the time of the exclusive. If anyone on the list signs a contract on the apartment within a given period of time — usually about 90 days — then the first broker gets the commission. If a seller decides to use the new agent for the deal, he or she may have to pay commissions to both brokers.

When drafting a contract, some buyers ask for a detailed marketing plan. Harold Kobner, an agent with Argo Real Estate in Manhattan, said that his contracts state that he will produce floor plans, hire professional photographers and list where the home will be advertised. “Whatever I tell the person I will do, I put it in my exclusive,” he said.

A commission of 6 percent of the purchase price is standard, but sellers can also try to negotiate a lower amount. With the market bouncing back, brokers these days are less likely to compromise, said Eric Benaim, chief executive of Modern Spaces, which focuses on Long Island City. One strategy is to offer to pay 6 percent if the buyer has his or her own broker. But if the buyer is unrepresented, the seller can offer to pay 5 percent to the exclusive broker who acts as a dual agent, said David Maundrell, the president of the Brooklyn firm Aptsandlofts.com.

Because these relationships can be difficult to get out of, it is important to choose a broker carefully. Micki Lazar says she learned this lesson the hard way. At the beginning of 2010, Ms. Lazar and her husband decided to sell her Greenwich Village studio apartment. They wanted to sell quickly because Ms. Lazar was expecting her first child. She chose an agent with the Corcoran Group because she felt that the well-known firm’s highly trafficked Web site would increase her chances of a speedy sale.

But problems ensued. Ms. Lazar said the agent, Beau Nova, promised to hold midweek open houses but held only one, and was late for another, leaving Ms. Lazar to greet prospective buyers. She said buyers who saw that she was pregnant were tipped off that she needed to sell quickly. Ms. Lazar said Mr. Nova pushed her to accept a low offer and to lower her $400,000 asking price. “He was fighting me about the price, the open houses; we just argued and I wanted out,” she said.

Corcoran let Ms. Lazar out of her agreement two months early. Mr. Nova sent an exclusion list to Ms. Lazar’s new agent and shortly afterward one of the buyers on the list made an offer. Because of her history with her previous agent and because the buyer was also represented by a Corcoran agent, Ms. Lazar said she wanted her new broker, who was from a different agency, to represent her. Ms. Lazar could have been liable for a 12 percent commission