Home Buyers, Does Your Agent Work For You?

As a buyer, you may be looking at many properties — those listed with an agent as well as those sold privately, “by owner.” Let’s say you call a real estate agency regarding a listed property you have found in MLS (multiple listing service), the newspaper, or by driving by. Traditional agencies will offer you ‘buyer assistance’, meaning that they will show you properties, direct you to mortgage lenders, etc., all without a contract.

The agent you meet who shows you that property will be anxious to show you other properties, of course. You begin to feel that this agent is “your agent.” NOT TRUE. This agent works for the agency that listed the property, and most likely is working for the seller of the property, not you. Anything you say may be carried back to the seller at any time.

Agents may call themselves many things according to state regulations. In Massachusetts, for example, the “listing agent” is the agent who obtained the listing from the seller. The “selling agent” is the agent who actually makes the sale. In order to better understand this concept, bear in mind that a real estate agency makes the most money when one of their listed properties is sold by an agent “in house.”

Most properties are not shown or sold by the listing agent. Although the homesellers may have spent considerable time with the listing agent discussing the fine points of their home so that they will be knowledgeable when showing it, the property will most likely be shown by agents who are totally unfamiliar with their home. Remember, whether talking about a listing agent or a selling agent, unless you have signed a contract with a buyer’s agent, their allegiance is always to the seller.

As if this isn’t complicated enough. using Massachusetts regulations as an example, a broker can work for both the buyer and the seller on the same property provided the broker gets the consent of both parties and provides each with a written notice of the relationship. In this case, the broker is considered a “disclosed dual agent.” This broker owes both the seller and buyer a duty to deal with them fairly and honestly.

In this type of agency relationship, the broker does not represent either the seller or the buyer exclusively, and neither party can expect the broker’s undivided loyalty. Realistically, it’s hard to imagine that properties are not discussed over lunch or between agents sitting at the next desk. Undisclosed dual agency by a broker is illegal. The agent must present the buyer with an agency disclosure form upon first meeting to discuss a particular property.

The use of an agent becomes further complicated when the subject of seeing properties offered “by owner” is brought up. Unless the agent that is showing you properties is a buyer’s agent, the only way he/she can get paid is to get the private seller to list the property, something that is not likely to happen. You don’t need an agent to see a for sale by owner property and some sellers prefer not to negotiate with anyone but the buyer directly. If you do feel that you need representation, the one agent that has loyalty to you, the buyer, is a buyer’s agent.

A buyer’s agent (ie. buyer broker) represents you, the buyer, and never the seller. Some buyer brokers are known as “exclusive buyer brokers/agents”. Exclusive buyer brokers do not list property – period, nor are they housed in an agency that does. The buyer broker’s commission, typically 3%, is generally accommodated in the selling price of the property, paid at closing. The National Association of Exclusive Buyers Agents (NAEBA – http://www.naeba.org) is a good resource to locate buyer’s agents in your area. Buyers, remember that a buyer broker is able to show you listed properties, foreclosures, new construction, and for sale by owner properties.

A word of caution….make sure you tell the agent that you want to see ALL available properties without regard to who pays the commission. We have often heard of overly aggressive buyer’s agents who will not inform their buyers about a property unless the seller agrees up front to pay their commission. This behavior is unwarranted as the buyer has already agreed to pay any commission due.

NOTE: If you are currently working with a buyer broker and you are looking at a for sale by owner property, please let the seller know up front. Don’t wait until the negotiations are underway to bring in representation. It could easily kill the deal. Most sellers are very open to showing their property to you and your buyer broker – just don’t assume they’ll pay your agent’s fees.

Selling Your House Online Without The Need For A Real Estate Agent

Pull Up A Word Document & Write Your Listing Description

Writing copy for a property listing is easy, especially if you are the home owner as you know your property best. All you need to do is point out the features and benefits and then elaborate on each. If you are struggling to write anything down, go onto the major property listing websites in your country and take a look at what some of the agents have written for some of their properties. After reading a few other listings, the creative juices will start to flow and you will have no trouble in writing your own ad.

Get Your Digital Camera & Take Photos Of Your Property

Now, you need to make sure that your digital camera takes high-resolution or high quality images so that you images do not come out with pixelation but other than that, make sure you house is clean and well presented and take some happy snaps. Here are some of the main areas of your house that you will need to take pictures of:

  1. Front Yard
  2. Back Yard
  3. Living Rooms
  4. Bedrooms
  5. Bathrooms
  6. Toilets

Get Property Reports & Market Data To Determine Your Selling Price

When selling your house privately, you need to gather your own data and determine the price at which you are going to sell as you do not have an agent to dictate or tell you what they think the property will sell for. You can do this fairly easily by making a search in Google for Free Property Report. This will bring up a number of sites that will provide you with sales data for properties that are similar to yours in your neighborhood. Once you have a general idea of what you would like for your property and you have all of your listing content, you can move onto the fun part, selling.

List Your Property On Free Classifieds & Paid Property Listing Websites

You can start off by listing your house online on free classified websites such as Craigslist or GumTree if you are based in Australia and you may just get enough enquiries on these sites to sell your house pretty fast but if you are looking for the most exposure and are looking to list on the most popular Real Estate websites in your country of region, do a search in Google for Sell My House Online or Sell My House Privately. You will get a large list of websites that will help you to list on these major property portals for a once-off or monthly listing fee. You will still be allowed to handle your own enquiries and deal with prospective buyers directly, they just list your property under their account but direct enquiries on your property straight back to you.

Take Your Enquiries, Conduct Open For Inspections & Negotiate A Price

This is the really fun part. Once your property is advertised and the enquiries start streaming in, you just need to take calls and fight for the highest price. You will have to show people through your home on the in-between but essentially, this is where you get down to business. Show people through and then take down the names and numbers of the interested parties. Organize a time to take them out to coffee and negotiate a reasonable selling price.

Speak To Your Lawyer or Conveyancer To Have Your Contracts Drawn Up

Once you have a buyer, you have done the verbal agreement, you then need to set it in stone. You can do this by going to your lawyer or conveyancer and asking them to write your sale contracts up for a small fee. Once these are done, all you need to do is have them signed and prepare for final settlement.

Settle & Smile

Once your property is sold and you have settled, you can sit back, relax and smile because you have just sold your property all by yourself and what is even better is that you did it without a Real Estate Agent and you did not have to pay a cent in commission.

What is Limited Agency?

Most people understand that a Buyers Agent is the agent that represents a buyer through a real estate transaction and the Sellers Agent represents the Seller during the transaction. Often, buyers do not understand exactly what “Limited Agency” (sometimes referred to as Dual Agency) is and how it will impact their sale or purchase. In Utah, the exact definition of Limited Agency taken directly off a Limited Agency Consent Agreement from Utah Association of REALTORS® reads:

“A Limited Agent represents both seller and buyer in the same transaction and works to assist in negotiating a mutually acceptable transaction. A Limited Agent has fiduciary duties to both seller and buyer. However, those duties are “limited” because the agent cannot provide to both parties undivided loyalty, full confidentiality and full disclosure of all information known to the agent. For this reason, a Limited Agent must remain neutral in the representation of a seller and buyer, and may not disclose to either party information likely to weaken the bargaining position of the other; such as, the highest price the buyer will pay or the lowest price the seller will accept. A Limited Agent must, however, disclose to both parties material information known to the Limited Agent regarding a defect in the Property and/or the ability of each party to fulfill agreed upon obligations, and must disclose information given to the Limited Agent in confidence, by either party, if the failure to disclose would be a material misrepresentation regarding the Property.”

In Utah, it is legal to act as a limited agent, but is it in a buyer or sellers best interest to allow a Limited Agency? If you work exclusively with a Buyers Agent, that agent should be working to locate your home and negotiate the best deal on your behalf. They should be somewhat aware of your financial situation and how much you ultimately plan to spend for the purchase of a new home. The Sellers’ Agent is hired by a seller to market the property with the intention of producing a buyer. This agent is usually aware of the sellers’ position and how much they would be willing to take for the property.

This is where the conflict may present its self. If the Agent is representing both the buyer and the seller in the same transaction, they are bound by fiduciary duties to both clients. It would be impossible to obtain the best deal if the representing agent must remain neutral. The negotiation will only result a mutually “acceptable” deal. This may or may not be the “best deal”.

A Buyers Agent, who is representing a clients interest, will be able to share pertinent information they learn that can result in a lower offer than the client may have initially presented. Alternatively, a Sellers Agent may discover the buyer will likely accept a counter resulting in a higher net to the seller. Information learned can be shared during an exclusive agency, however when Limited Agency is a factor, this information can not be shared. In Utah, each client has the choice to decline or accept limited (or dual) agency. The Exclusive Buyer Broker Agreement has a designated section that fully explains (and requires a signature to accept) Limited Agency. Also, should the Limited Agency situation actually arise, the client will again have to sign an agreement to this. Each party (the buyer or the seller) has the right to obtain an independent agent.

Many clients often point out the fact that the Agent will be making double the commission. This should not be a consideration for either party involved in Limited Agency. You must remember this agent will make commission on their listing no matter WHO sells it, and if the Agent is already working with the buyer, then anything the buyer purchases the Agent will make commission on that as well. Essentially any deal could be a “double commission” when an agent works with both buyers and sellers independently. So it is unfair to make the Agents commission a factor or a negotiation tool, for either party.

Limited Agency… should YOU participate? I suppose it depends on how well you know your Agent. Will you get the best deal? Possibly. You may have to rely on some of your own instincts and research to determine what the best deal will be, as you will not have full disclosure and advice from your limited agency real estate professional.

Tips on Selling Your Own Property

Ever wondered how you can save money when selling your property? Ever thought that you have to have an estate agent to sell you property? With the growing trend of consumers in the selling market now selling their own home, should estate agent start to worry? Is now the time to start selling your own home and cut out the middle man?

If you have ever wanted to cut out the middle man and sell your own property there are a number of considerable benefits. The main benefit is the saving on commissions. This could be in the thousands. The feeling of remaining in control and the sense of achievement when you have finally sold your home can reduce any stress levels and leave a feeling of satisfaction and a job well done. With a growing number of resources on the internet available to everyone, there has never been an easier time to sell your own property. There are however some careful considerations that need to be thought through before you take the plunge; what is the value of your property, what are the benefits to the buyer and how do you intend to advertise.

Knowing how to value your property isn’t as hard as you think. All you need to know is what the market considers to be a fair price for your property in the location that it is in. For you to do this just take a look around. What are the local properties that are similar to yours valued at; research local papers and estate agents windows to see what they have valued similar properties to. There are even on-line house price calculators which can give you a guide price. When you are finding the value of your property, always keep in mind the lowest price you will accept for your property and your ideal price.

Listing the benefits to the buyer is just as easy. Just remember what it was that made you buy the property. Take a look at a local map and list all the amenities, local schools and so on.

Advertising you property can be as easy as placing an advert in the local news paper or seeking out websites that allow you to list your property. Taking photos with a digital camera will greatly enhance any advert. With a little bit of research you could have your advert in front of thousands of potential customers in a very short period of time and the cost of advertising will be considerable less than any fees paid to an estate agent.

Although going it alone can be rewarding there is no substitute for the local knowledge of the market that an estate agent can bring. Selling your own home can be a challenge but very rewarding. The choice is yours to take.

Real Estate Agents and Roles of an Agency

Agency is a relationship existing between two parties called principal and agent, and in the case of property, a Jamaica real estate agent has the function to create a contractual relationship between the principal and third parties.

The Creation of Agency

The power of the Jamaica property agent to act may arise in any one of five ways:

1. Express Authority

2, Apparent Authority

3. Ratification

4. Necessity

S. Presumption of wife in the case of cohabitation.

1. Express Authority

The express authority for an agent to act on behalf of a principal (otherwise called the vendor) can be made either in writing or orally. No formality is required except where the agent is appointed to execute a deed; his authority must be by way of a deed. That is, he is to be given a Power of Attorney. While being trained Jamaica realtors are sensitized of this in a special apartment guide for Jamaica.

2. Apparent Authority

This arises where the principal represents to a third party that the agent is authorized to act on his behalf, intending that the representation be acted upon and is acted upon by the third party. The principal is bound by the agreement entered into by the agent. This is common place for most Jamaica home rentals.

3. Ratification

Where the agent has no authority to contract on behalf of the principal or exceeds such authority the contract is not binding on the principal. The principal may however afterward confirm and adopt the contract so made. This is known as ratification.

For Ratification to take place the following conditions must be present:

a) The agent must have contracted expressly as agent for a named principal.

b) The principal must have been in actual existence at the time of making the contract. He cannot there pore bind a company which was not formed at the time of making the contract,

c) The contract should be capable of ratification. Thus a void contract cannot be ratified.

d) The principal must at the time of the ratification have full knowledge of the material facts.

e) Ratification must be of the whole contract.

Ratification is retrospective in its operation, that is, the parties are put in the position they would have been in if the agent had when the contract was made, the authority he purported to have had. This is possibly the most fundamental with respect to knowledge of the Jamaica real estate market. Most investors are made aware of ratification in a guide to investing in Jamaica property.

4. Agency of Necessity

This arises by operation of law and occurs where one person is entrusted with another’s property and due to some emergency it becomes necessary to do something to preserve that property. Although the person entrusted with the property has no express authority to do the act necessary to preserve it, because of the necessity, the authority is presumed.

Before the Agency of Necessity arises three conditions must be satisfied;

a) It must be impossible to get the principals’ instructions.

b) As a necessity, commercial value must be the catalyst for the creation of the agency

c) The agent of necessity must act in the interests of all parties concerned.

5. Agency of Cohabitation

At common law where a husband and wife are living together, the wife is presumed to have her husband’s authority to pledge his credit for necessaries judged according to his style and standard of living. Though not a legal representation of the principal, this happens more often than not in the divestment of Jamaica homes for sale.

The presumption of Agency arises from cohabitation and not from marriage. It has been held to apply equally in the case of a woman living with a man as his mistress; the presumption can be rebutted if the husband proves:

a) he expressly forbade his wife to pledge his credit;

b) he expressly warned the supplier not to supply his wife with goods on credit:

c) his wife was already sufficiently supplied with goods of the kind in question;

d) his wife was supplied with a sufficient allowance or sufficient means for the purpose of buying such as goods without pledging the husbands credit,

e) The order though for necessaries, was excessive in extent or having regard to the husband’s income, extravagant.

Where the husband has been in the habit of paying his wife’s bill with a particular supplier, his wife’s agency will be presumed and he can only escape liability by expressly informing the supplier that his wife’s authority is revoked.