SELLING: What do real estate "agents" do? Who do they represent?
What is the meaning of the word "agent" in the context
of real estate?
Real estate is practiced under the "Law of Agency" -
a concept in which one party, the "agent", represents
the interests of another, "the principal". Their relationship
is said to be an "agency relationship".
In the past, real estate brokers have most often acted as the
representative of the property owners, the sellers. As the sellers'
agent, the broker acts on their behalf, and with their best interests
in mind, to locate a suitable buyer for the property.
When the broker represents the sellers, buyers must be treated
honestly and fairly, however they are not "represented" by that broker. Keep in mind that the sellers' agent - the broker
- must be always faithful to the sellers' best interests (not
those of the buyer).
concept of agency is an important one to buyers also. Most buyers
are not "represented" by an agent. Their buying decisions
are made using factual information presented to them by the sellers
or their "agent", the real estate broker.
Can buyers be "represented" by an agent? Yes. This relatively
new concept, called "buyer agency" is quickly becoming
more common. To gain representation in their purchase, the buyers
may employ a broker to represent their interests. This broker
becomes their "agent" and has the obligation to faithfully
serve the buyers.
the real message about agency? Both buyers and sellers should
know whether or not they are represented in a real estate transaction.
To find out, they should ask the real estate broker: "Who
are you representing in this transaction?"
As an informed buyer or seller, with factual
information in hand, it is possible to make a good real estate
decision. Learn the facts about agency relationships before you
buy or sell.
Imagine this scenario. You plan to buy a home, and notice
one you like in a great location. You call for an appointment,
and drive straight to the home to take a look. You like it, pull
out your checkbook, and write a check for $136,000. As you leave,
you think to yourself "Homebuying is fun, and easy too!"
Do you see any holes in this idealistic story? Does it seem just a little too
easy? Of course it does!
Most home buyers look at more than one home before making their purchase
decision. They want to compare features, amenities and price to find the best
value. To do this, they must identify a selection of homes in their preferred
location which match their housing objectives.
Locating a suitable selection of homes requires comparison by location,
architectural style, lot size, bedrooms, baths, condition, amenities, and
numerous other criteria. Each home must be seen individually to measure the
value offered vs. the price asked. The process can be daunting.
Rarely, if ever, does a buyer write a check on the spot to purchase a home.
Even when paying cash, the transaction takes time to allow for a title search,
survey, appraisal, and other necessary activities to protect the buyers.
More often than not, buyers choose to borrow a large part of the purchase
price. This requires going through the qualification process including
verification of income and employment, as well as a credit check. Certain ratios
must also be met to qualify for the various available mortgages.
To enjoy the home buying process, and keep it simple, choose Jill & Herb to make it all come together. They will research the market for
suitable homes, and arrange a prequalification interview with a mortgage lender.
You will breath easier, and be in your new home sooner than expected.