When you are buying, or selling a home, your most important step to take is choosing the right real estate agent or buyer's agent. The process is very detailed and difficult and you will want someone that could potentially save you from mistakes that can cost a great deal of money.

Monday, March 9, 2009

Protecting The Buyer and the Realtor® / Importance of Buyer's Representation

by Patti Lora

The other day a lady phoned me that I had not spoken with in several months. Her agreement for the house she was renting was about to expire and she wanted to look at homes to rent as well as homes to buy. We discussed all the benefits to buying and I requested that she go through the pre-approval process with a mortgage company so that we would know exactly what her budget would be. She declined and said she wanted to wait until she was certain she would buy instead of renting. I conceded knowing that we would be getting pre-approval before submitting any purchase offers.

I proceeded with my MLS internet search for suitable properties. After several hours work on my part I found many that fit the qualifications she gave me perfectly. I scheduled our appointments to view the homes and called the lady to finalize her information so that I could fill in the buyer's representation paperwork. She refused to give me her address saying that she would not sign anything. After explaining to her the importance of representation, even if it is for the one day we look at homes she still said, "No". At that point I wished her the best because I have decided not to work with anyone who will not listen to what I, as a professional Realtor® is advising.

Here is why a Buyer's Representation Agreement is important:

– The written agreement helps the prospective client understand the level of services the Realtor® will provide as well as their role. It can also help eliminate any misconceptions.
– A prospective client should understand how the Realtor® will be compensated and whether the client is or is not obliged to pay any part of the associate’s compensation.
– An agent may spend a significant amount of time showing properties to a prospect. Realtors® are committed to assisting clients. The same level of commitment is expected on the part of the client back to the Realtor®.
– If there is a possibility that the client will choose to purchase one of the firm’s listings, the authority for the broker to become an intermediary must be expressed in writing. The Notice of Intermediary Relationship form specifically refers to the buyer representation agreement and listing agreement (which the form presumes were previously executed). It is critical in an agency relationship for the sales associate to discuss what role the sales associate will take if the prospect buys one of the firm’s listing.
– There are several disclosures and statements that Texas law requires licensees to provide to prospects. The written buyer's representation agreement serves as a good checklist.
– The buyer representation agreement helps avoid commission disputes between REALTORS®.

If you are a buyer and are concerned about signing representation paperwork consider the following:
– Sign a shorter agreement with the Realtor®. Consider a 30, 15, or five day representation agreement.
– Another option would be to limit the term (even to a single day) or the market area (even to a single address). Consider a one-day agreement. If at the end of the day, you are comfortable with the Realtor® extend the written agreement.
– Limit the term (even to a single day) or the market area (even to a single address). Consider a one-day agreement. If at the end of the day, you are comfortable with the Realtor® extend the written agreement.
– You should also know that entitlement to Realtor® compensation in most buyer representation agreements is determined by the date that the buyer signs a contract to buy, not by the closing date.
– Ask for an explanation and a copy of the Information about Brokerage Services and Buyers Representation forms. Texas law requires that the Information about Brokerage Services be presented at the first face-to-face meeting with a prospective client.
– Believe it or not, many Realtors® fear the buyer's representation agreement solely because of a lack of knowledge of how to represent buyers. These agents need more education on the topic.
– By signing buyers representation your Realtor® will be bound to represent your interest before they ever step foot onto a property or search for properties.
– If you, as a buyer have sold a home in the past, keep in mind that a written agreement is equally as important when you buy as when you sell.

My hope is that buyers and sellers will become as educated as possible before they begin their home search. Education coupled with a good Realtor® who is committed to excellence and customer service will make your home buying and selling a positive experience.

Source: http://www.texasrealtoronline.com/issues/1100/buyerrep/1100buyerrep.html

posted by Patti Lora

1 Comments:

Anonymous Gabe Richter said...

Great article Patti. Too often we get scarred of contracts and lengthy agreements, while in this case they seem to protect us. Thanks for the info!

March 9, 2009 10:59 PM  

Post a Comment

<< Home