Friday, January 17, 2014
Saturday, November 24, 2007
The Effects of Dealing with a Seller’s Agent
Unless the seller has authorized it, your seller’s agent can’t disclose how much less than the selling price the seller might take, even if the agent knows of a specific figure! (This isn’t to say that many agents don’t hint at the lower figure, but they aren’t supposed to come right out and tell you, for example, that the seller said, “My price is $100,000, but I’m so desperate to sell I’d take $75,000, butdon’tyou dare tell that to any buyer!”)
The agent can’t disclose that the seller might accept terms more favorable to you unless the seller has authorized the agent to tell you.
On the other hand, if you tell the agent that you’re desperate to buy, that even though you’re offering $175,000 you’d be willing to pay $200,000, the agent is obligated to tell the seller what you said!
Working with a seller’s agent is almost like having an enemy spy in your camp! Of course, in actual practice there is some bending of the rules. And a good agent will always attempt to work fairly with both buyer and seller.
In today’s world, where consumers are so litigious, many agents are hesitant to do anything that a seller might construe as violating the fiduciary relationship and that might result in a lawsuit against them. Hence, when you work with a seller’s agent (or subagent), don’t expect advice on how to get the best terms or price.
When you’re working with a seller’s agent, even one you consider on your side, button you lips. Don’t tell the seller’s agent the highest you’ll go on an offer. Remember the old World War II slogan about loose lips. Don’t let the agent know the best terms you’ll give the seller. Think of the agent as the seller’s earphone. Don’t whisper anything that you don’t want the seller to hear. Keep your own confidences.
Are There Agents Who Work for Both Buyer and Seller?
There is no easy solution to the problem of agency for buyers. One answer, however, that is gaining increasing popularity in some areas of the country is to have a “dual agent.” Adual agent represents both buyer and seller. This agent owes both the seller and you, the buyer, “integrity, honesty, and loyalty.” However, unless permitted by the seller, the dual agent still may not tell you if the seller will accept a price less than the property is listed for. However, to compensate for this, the dual agent may also not tell the seller that you’d be willing to pay more than the price you offer. (The same generally holds true with terms.)
Thus, while the dual agent really isn’t 100 percent on your side, the agent also isn’t 100 percent on the seller’s side either.
Dual Agent versus Buyer’s Agent versus Seller’s Agent
In a dual agency:
■ The agent tries to represent both you and the seller
■ The agent tries to avoid telling either party anything that will hurt the other. Usually this means not saying anything that will benefit you
In a buyer’s agency:
■ The agent represents just you
■ The agent must tell you if he or she learns the seller will take less
In a seller’s agency:
■ The agent represents just the seller
■ The agent must tell the seller if he or she learns you are willing to pay more
How Do I Know Whom My Agent is Working For?
Ask.
Your agent is obligated to tell you. Further, before you sign any documents, including a sales offer, your agent should present you with a written statement describing who that agent works for (seller, dual, or buyer). Many states now require a formal disclosure as part of their agency law. (California, for example, requires dual agents to give a signed statement to that effect to both buyer and seller.)
Friday, November 23, 2007
Get Agents Working for You Instead of the Other Way Around
The vast majority of real estate agents are very hardworking people whose goal is to serve you by getting the best home on the market for you. Along the way, however, there are a few agents who are simply incompetent or unscrupulous, or who really don’t work very hard at all. Since you’re very likely to work with an agent when you buy a home (around 85 to 90 percent of all homes for sale are listed with agents), you need to be sure you get a good one.
Most people think picking real estate agents is like picking apples out of a barrel. There are going to be a few shiny ones here and there, a few bad ones on the bottom, but overall they are going to be pretty much the same. Unfortunately, that’s simply not true.
Yes, there are always a few bad apples, but the real distinction has to do not so much with ethics as with ability. Some agents are able to help you, but some are not.
It’s important to understand what I mean by “ability.” I’m not talking about understanding the laws of your state with regard to the licensing of agents or the selling of real estate. Today, in all states agents must pass strict tests as well as continue their education to make sure they understand what their legal and fiduciary responsibilities are. In this sense, the overwhelming number of agents are capable. It’s when it comes to serving your needs that many fall down.
Are There Active versus Inactive Offices?
Just as there are two types of agents, there are also two types of offices: the active office where sales are constantly happening, and the inactive office where the agents sit around and commiserate with one another about the slow (to them) real estate market. There are a few good ways to tell the two types of offices apart:
How to Identify Active from Inactive Offices■ An active office almost advertises heavily. Check the ads in your local paper.
■ An active office usually has quite a few agents and they always seem to be scurrying around, not sitting at their desks drinking coffee and reading the newspaper.
■ An active office usually has promotions going on to induce greater activity from agents. Walking in, you will often see “salesperson of the month” and “lister of the month” awards—TVs or trips to Hawaii for the best producers of the season, and so on.
■ Other agents will know of the active offices and often will speak of them grudgingly as people who are always getting the deals done.
■ This is just a personal observation, but I have found that active offices usually have a secretarial staff. The agents are out there selling; the staff handles the paperwork. In an inactive office (without many sales or much revenue), it seems the agents are stuck with all the secretarial duties.
Just keep in mind that the 80/20 rule still applies even in an active office. It’sjust that in an inactive office, the hot 20 percent aren’t there.
How Do I Find an Active Agent in an Active Office?
If you walk in off the street and into an active real estate office (see above), chances are actually against your getting an active agent.