Tag Archives: Broker

Trust in your real estate broker is the foundation of home buying, selling – The Washington Post

 

Trust in your real estate broker is the foundation of home buying, selling  By Ilyce R. Glink and and Samuel J. Tamkin November 29, 2013

I bought a house for a bit under $2 million in Los Altos, Calif., (about average for around here). The seller and I were both represented by (different) agents from the same local branch office.

I was encouraged by my agent to bid aggressively for the house as “several disclosure packets had gone out” and the situation was supposedly very competitive.

After my offer had been presented (and accepted), I learned that in fact my bid had been the only one presented to the sellers — there were no other competing bids presented at the offer deadline.

When I pointed this out to my agents, they said their realty office would provide me $10,000 “toward closing costs,” apparently out of the goodness of their hearts. No release of liability was required. Was I lucky to get such nice real estate brokers, or should I be considering legal action? For later tax assessment purposes, is there any precedent for claiming the house sale price was actually $10,000 less than recorded, due to this agency payment?

We hate to point this out to you, but you always need to work with a real estate broker you can trust. While we don’t know if you ever considered this real estate agent’s trust in the equation of buying a home, the issue of trust is of utmost importance. Were you lucky? We don’t know. The information you received is not unlike what we hear our readers tell us when their brokers pressure them into putting in an offer on a home or increasing the amount of an offer during negotiations.

Not all brokers will pressure their clients, but certainly some do. Your letter doesn’t say that your broker told you that other buyers were bidding on the home. You were told that other buyers were given information or packages about the home. The brokers could have given you correct information, and either you took it to mean that you were competing with others, or your broker might have intended on giving you a sense of urgency to buy the home. In either case, the real question is whether the brokers did something wrong. California law tends to pioneer issues like this, and you could seek legal advice about your situation. The real estate broker has offered to pay $10,000 toward your closing costs once you brought up this issue.

You might have found a really good broker who feels bad for you and would rather keep you happy than have you feel bad about the deal. Your broker may be entirely correct. Your broker might have thought other people would come in and bid against you and thought that this home was the best home for you at the time. Whether you’re buying a home for $2 million or $200,000, the psychology of buying is the same. If you’ve been working with a reputable and good real estate agent, that agent may believe, after working with you for some time, that the home you’re bidding on is the right home for you. If that agent has a sense of what home values are in the area, he or she may also encourage you to make an offer to avoid having you walk from the deal. For many home buyers, this process works well.

The buyers end up buying the home they like and they move on to close on it. It’s possible you wound up with the right home at the right price. You might have initially bid less if you had known no one else was bidding on it, but you might have come up in the counteroffer or even lost the home if your agent didn’t push you to buy it. It’s quite hard to say where things would have ended up and how low the seller would have gone. But if the broker did nothing wrong — and perhaps the agent didn’t do anything wrong — the agent is making a fair amount from your purchase of the home. Your agent would rather that you buy the home, be happy in the purchase and make future referrals to him or her than have you feel bad about the purchase. It’s quite hard to second-guess what happened with your deal.

You’d know better as to whether the broker had dealt fairly and well with you during your entire home-buying process. If you feel that he or she was fair with you, you might give the benefit of the doubt and move on. On the other issue of the purchase price, we don’t think that the agent’s contribution toward your closing costs will adjust the purchase price one way or the other. Your lender will still consider the contract price to be the price you are paying for the home, and all of the closing documents will show the purchase price as what is stated in the contract, without regard to your agent’s contribution of $10,000 to your closing costs.

Source: Trust in your real estate broker is the foundation of home buying, selling – The Washington Post

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.