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).
The 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.
What's 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.
Buying: 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.