Browsing Category dual agency

Real Estate Representation (Finally) Evolves in Virginia

July 1 2012 will be a day that many buyers, sellers (and real estate agents, I’d wager) learn that the current world of real estate representation is (supposed to be) about representing clients’ best interests – not merely selling a home. That’s the day that the new real estate Agency law will take effect. While single agent dual agency isn’t outlawed, real estate agents are now legally bound to explain to potential clients the pitfalls of single agent dual agency – whereby the same agent “represents” both parties in a real estate transaction. And those pitfalls now how to be clearly spelled out so that most buyers and sellers will likely look at the agent advocating for getting both sides of a transaction with a raised eyebrow (at the least).

Long-time readers know that I have advocated for true client representation for years. Simply put: if you were getting a divorce (or some other potentially traumatic legal matter) – would you hire the same attorney to represent both parties? No. Same with buying a home; usually everything goes well and smoothly, but when it doesn’t – representation is more crucial than ever before. (bolding mine)

1. That following the commencement of dual agency or representation, the licensee cannot advise either party as to the terms to offer or accept in any offer or counteroffer; however, the licensee may have advised one party as to such terms prior to the commencement of dual agency or representation;

2. That the licensee cannot advise the buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to what repairs of the property to make or request;

3. That the licensee cannot advise either party in any dispute that arises relating to the transaction;

4. That licensee may be acting without knowledge of the client’s needs, client’s knowledge of the market, or client’s capabilities in dealing with the intricacies of real estate transactions; and

5. That either party may engage another licensee at additional cost to represent their respective interests.

Put more succinctly, if a buyer and seller enter into a dual agency relationship:

1 – The agent can’t tell you about price, terms, etc, but may have already (and probably has) advised the opposing party
2 – The agent can’t tell you anything about the property that’s useful or isn’t something you don’t already know.
3 – The agent is an impartial advisor (rather than an advocate for one party)
4 – The agent doesn’t and can’t know anything about the clients wants or needs.
5 – Get another agent to get actual representation.

Single agent dual agency sounds really awesome, right?

Presented anecdotally:

Real estate transactions require septic inspections. If I’m asked if a buyer should open up a septic system and actually inspect the system, my answers are going to be, respectively:

Representing the buyer: Yes, absolutely.

Representing the seller: No, absolutely not.

“Representing” both parties: I don’t know; you should probably figure that out for yourself.

What are the benefits of using a buyer broker agreement?

I tend to use buyer broker agreements with all of my buyer clients fairly early on in our buyer client realtor relationships and this reason is this: first and foremost it lays out my fiduciary duties to my buyer clients. It’s three and a half or four pages of how I work with my clients. It also lays out my buyer clients’ responsibilities to me. We are making a contractual agreement to work with each other. It professionalizes the relationship as well. It lays out exactly how we’re going to work together.

The Richmond Association of Realtors is doing a pretty good job conveying this change (note to CAAR: Wordpress makes great websites) – What is a Buyer Broker Agreement?

They even have sample dual agency forms you can download.

I’m happy to talk about this stuff extensively, offline – I have so many examples I could share of how dual agency is bad, how I’ve handled situations where I’ve had to separate myself from long-time clients and concede many thousands of dollars – because it was the right thing to do – and detail many of the ways in which a single agent in a dual agency situation is working for herself and not the clients.

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What are Your Favorite Bills in this Year’s General Assembly?

These are the bills I’m tracking on Richmond Sunlight – bill ranging from real estate licensing to the castle doctrine to eminent domain – and quite a few more.

The Charlottesville real estate market has gotten busier since the General Assembly’s session started so my time has been more limited (and this highlights why the only ones able to really influence legislation are the ones paid to do so).

As a consumer, agreeing to Single-Agent Dual Agency would take an awful lot of consideration and trust …

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HB 1907 – Agency in Virginia, Disclosures and More

The bill has unanimously passed the Committee and the House of Representatives . Richmond Sunlight » 2011 » Real Estate Board; requirements for licensure and practice of real estate. (HB1907) Discussing the perils of single agent dual agency has long been my windmill; while not perfect, this bill clearly is a step towards representation .

…That following the commencement of dual standard agency, the licensee will be unable to advise either party as to the terms, offers or counteroffers; however, under the limited circumstances specified in subsection C, the licensee may have previously discussed such terms with one party prior to the commencement of dual standard agency;

…That the licensee cannot advise a buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to repairs of the property to make or request; 3. … That the licensee will be acting without knowledge of the client’s needs, client’s experience in the market, or client’s experience in handling real estate transactions unless he has gained that information from earlier contact with the client under the limited circumstances specified in subsection C; and 5.

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How Much is the Buyer Broker Fee?

That question is one of the many reasons that I choose to use Buyer Broker agreements with my buyer clients . (and why ending cooperative compensation would be a boon to the real estate world ). 1 – The Seller and the Sellers’ Realtor are going to do whatever they can (legally and ethically) to induce a buyer to look at the house … and hopefully buy it.

…(this argument becomes much harder when the seller has no or negative equity) – “It’s none of the Buyer’s business how much I’m being paid!” (as argued by the Buyer’s Agent who ostensibly is seeking to “represent” said buyer) Look, I’m not begrudging Realtors earning livings what I do encourage is for buyers to be aware of what may be going on behind the scenes.

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Prepping to Buy a House in Charlottesville

Now is the time when people really start to talk about these things in earnest, so here is the thing: if you’re thinking about buying a house, it’s a great time to buy! … But if you’re thinking about buying in the Spring: – now is the time to start researching. – Drive through neighborhoods, see how they’re decorated if that interests you or if it disinterests you. It’s good to know what you might be getting yourself into. – Start scouting things out, ask questions, search for homes and find a realtor (I am one) and start looking for vacant houses so you have a feel for what you’re going to see come Spring when houses come on the market. – Prices now are starting to moderate even more. … Start interviewing buyers agents , ask questions, because when you’re talking about interviewing buyers agents , you’re really talking about spending a lot of time with somebody who is hopefully going to be someone you like, trust, and is a professional who is experienced.

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Blog Wayback – Why Use a Realtor – Decoding NAR-Speak

In many markets across the country, over 50% of real estate sales are cooperative sales ; that is, a real estate agent other than yours brings in the buyer. … Your Realtor will generally prescreen and accompany qualified prospects through your property. a – I want to see that study. b – Allowing strangers into your home is the whole point of the MLS and lockbox system we use!

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Buy Local

We pay Realtor buyer agents commissions on the homes’ final sales price after all upgrades, selections and options are chosen and not pay on a “bogus” base price that is much lower than the final sales price, we love contributing to the Charlottesville area and market by offering a great value and quality product and we offer outstanding warranty, customer service and prompt follow-up. Some do not bank locally, they do not buy building materials locally, they do not us local subcontractors, they require buyers to obtain financing from their out of town lender, they do not like to work with Realtors and make every effort they possibly can to sell to the public directly, they pay Realtors on a “bogus” base price that is always much lower than the final sales price, they have very strict walk through policies as you described in your blog and do not encourage or allow buyer agent participation in the final walk through and offer very very minimum warranty and customer service follow up after sales.

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