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THE SELLER IS REPRESENTED - WHY AREN'T YOU?
The purchase of real estate is usually the largest financial
transaction you will ever be involved in. It involves legal contracts,
bank mortgages, return on investment, home inspections, financial
appraisals and a myriad of other complicated processes and jargon. Did
you know that before the early 1980's buyers were never represented?
Sellers had agents to list their properties and negotiate the
contract with all the expertise of professional Realtors and buyers were
at a disadvantage in every transaction. From that imbalance evolved the
Buyer's Representative or the Buyer's agent.
I , and several of my team of agents, are Accredited Buyers
Representatives (ABR, an accreditation approved by the National Board
of Realtors) with the extra resources to support both the buyer and seller
through a smooth and legal transfer of title to the new owner. For
sellers, my team of agents know what buyers are looking for, what attracts
them and what kinds of financing is risky and should be avoided. For
Buyers, I have specific expertise to find the right property for you,
negoptiate the best deal, and even help you find the right fianancing! We
know sellers are represented by professional Realtors, why wouldn't you
want to be represented?
Without getting too deep into what agency is, any listing on the Realtors'
multiple listing service (MLS) tells you the seller is represented by a
professional Realtor. The Realtor has signed an exclusive listing
agreement with the Seller and has the fiduciary (another big word that
means all the financial and negotiating responsibility) duty to put the
Sellers' interests first at all times. The Seller negotiates with their
agent as to what commission they will pay and the agent decides with the
seller's consent, how much of that commission will be offered to the agent
that brings in a buyer (the cooperating broker commission).
Point number one: As a buyer, a buyers representative's (or
buyer's agent's) expertise and services usually don't cost the Buyer
anything (unless the Seller is paying an unacceptably low co-op and then
you'd make up the difference of what your agent and you had agreed upon).
When you go to open houses you are dealing with the Seller's agent or
their representative. In Hawaii, open houses are still a good way (but
not the best) to market a property. Seller's put the sign up and hold
open houses to secure more listings in that area. That's their goal and
since that's what we do for a living, absolutely nothing wrong with that
goal. The agents sitting the open house (unless it is a high end property
the listing agent usually doesn't sit the open) are usually less
experienced agents from the sellers' agent's office (agency). They are
their looking for buyers to represent. If they are any good, they'll have
other properties available to show you similar to this one if this one is
not specific to your needs. Once again, smart move on their part.
But how about if you like this house and want to make an offer? At worst
you are dealing with the Seller's agent whose total responsibility is to
the Seller - they've signed the agreement that way. If they write up the
contract for you, they must get the Seller's permission to be a dual agent
and will treat you as a customer (responsible for fair and honest
treatment but not necesarily to put your financial interests before those
of the sellers') while the Seller is a client with the full fuduciary
responsibility and protection of the original contract with the Realtor.
You will at least have someone write up the (very complicated, and new in
Hawaii as of June 2007, Purchase Contract) for you but you are not equally
represented, and in some cases not represented at all in this
transaction.
At best, the Seller's agent would turn you over to another agent in the
Agent's office (or to the other agent who sat the open), and even if you
sign an exclusive buyers agreement with that agent, you are in a dual
agency situation where your agent must consider equally your and the
seller's position. In neither case, is it likely that you will get a
through market analysis of the properties in that area in order to make an
informed decision as to what price you should offer (the list price is
seldom the price that you should offer), nor someone to negotiate that
price, the conditions and terms of the contract, and the myriad of other
parts of the transaction in your favor.
Point number two: Don't get an agent by default. You may only be
partially represented and at worst not represented at all. You will not
get a lesser price by bypassing representation, the Seller knows the
bottom price they are willing to accept and your bypassing knowledgeable
representation only puts you at risk.
Assess and select the best agent to fully represent you and your interests
before you start looking at properties. This is what we do for a living
and I want to bring all our expertise and market knowledge to bear in one
of the most important transactions in your life!!
Point number three: If we agree to represent you in a transaction
involving a listing listed by my agency, we will insist that you sign an
exclusive Buyer's Representation form so that we may properly represent
you. If you are already a client of ours (having already signed the
Agreement), we will fully inform you of any conditions it imposes on my
representation and refer you to another agent outside our office if you
are not comfortable with our abilities to serve you. We can also assign
the agent you've been working with as an "exclusive buyers agent" to
represent only you.
But market analysis for the price to offer, neighborhood knowledge to meet
your criteria, process expertise to smoothly sail you through a
transaction set up to protect your best interests are not the only
considerations. What if you are driving around or looking in the
newspaper for open houses and you come across a FSBO (for sale by owner).
The seller may or may not have the expertise to close the transaction and
transfer title to you successfully. Is the seller prepared to open
escrow? Does he understand the Purchase Contract? Do You? If he is not
using the Realtor's Purchase Contract (scrutinized and approved by all the
legal beagles and the Honolulu and National Association of Realtors) What
kind of contract is he using? Does he have a way to transfer the title to
the property cleanly? (Without a clean registration of the title transfer
in either the Regular or Land Court or both, you do not own the property
no matter how much money has been exchanged). Worst case scenario -
nobody is represented and all sorts of legal red flags are flying!
Point number four: If we represent you and you fall in love with a
FSBO, we will inform you if you will have to pay the commission in order
for us to represent you in the transaction. FSBOs sometimes offer
cooperating broker fees and sometimes they do not. It is more work, as
the seller doesn't have an agent to manage their side of the transaction,
but if you are our client (with a signed agreement) and not just a
customer (no agreement), our job is to find you the home of your dreams
and close your successful transaction!
So use the internet to refine your search for a property, learn about the
neighborhoods, and develop your criteria; but before you go - select an
Accredited Buyer's Representative to be your agent. Going it alone or
flitting from agent to agent only increases your risk of not getting what
you want - a new home that meets all your needs.
Sign up at Hawaiirealestateonline.com
or
OahuHawaiiRealEstateOnline.com and let us show you what we can do for
you!
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Equal Housing Opportunity