Real estate stories radiate from the water cooler and cocktail parties like a brush fire out of control. Like early stages of fires, real estate transactions start out manageable, but occasionally real estate consumers fan the flames because of inexperience, and some real estate agents misplace the water buckets. How can consumers be more proactive before the fire starts? By asking qualifying questions of realty agents to determine if they carry a fire extinguisher in their briefcase.
Under license law whom do you have a fiduciary responsibility to?
Ask this question the first time you speak with a real estate agent. In some areas all agents have a fiduciary responsibility to the seller under license law, even if they are working with a buyer. In other areas unless you have a signed buyer representation agreement your agent under law must represent the seller. To add to the confusion, some states require agents to have a fiduciary responsibility to whom they bring to the transaction, be it the buyer or the seller.
How are you compensated?
The majority of agents are independent commissioned-based contractors of the brokerage with whom they're affiliated. Real estate commissions vary from one to ten percent and can't be fixed under anti-trust laws. The broker through a listing agreement with a property seller is paid a commission, who compensates the buyer's broker cooperatively. Require your agent to show you properties that offer lower than customary cooperative commissions. If you retain an agent under a buyers broker agreement, you will compensate your agent's broker. Brokers split their commissions with their agents usually keeping 5-50 percent for the brokerage and compensating the agent with the remainder on a sliding scale based on previous sales volume. This is known as the "commission split". Agents can only be compensated by their broker and can't receive compensation directly from attorney's, home inspectors or any other non-broker under the Real Estate Settlement Act.
Do you show all available properties in the market I'm interested in?
Require your agent to show you all available properties listed by all companies. The problem with being shown only the agent's or their companies listings is two fold. If you decide to purchase the agent's listing, in most cases they will become under real estate license law a "dual agent". State laws restrict what a dual agent can and can't do for both sides in a transaction. Dual agency benefits the agent by doubling their commission, and offers no benefits to either the seller or buyer. When you purchase a property that is listed with an agent in your agent's office it is known as an "in-house sale". If you can be confident that the two in-house agents are acting in their respective clients best interest and the agents are not being awarded a bonus for selling an in-house listing, than you could proceed. Require your agent to disclose to you any property that they show you that they have an ownership interest in. Your agent should always show you For-Sale-By-Owner properties, isn't it about your housing needs being met?
Are you a RealtorŪ?
Not all real estate agents are RealtorsŪ. Industry sources report that there are 2.6 million real estate agents nationally. Only 1.1 million are RealtorsŪ or members of the National Association of RealtorsŪ, who are required to have ethics training which defines their obligations to clients, customers, the public and other RealtorsŪ. Working with a RealtorŪ adds another option for dispute resolution should you need it.
Have you been disciplined by your licensing authority?
All real estate agents are licensed in states where they sell property. Ask to see their current real estate license. Find out the name of the department in your state government who regulates real estate agents, go on-line to the website to look up information about your agent's license status, including disciplinary actions. Most brokerages require real estate agents to have errors and omission insurance, ask your agent if they are covered under this type of policy.
How long have you worked full-time in real estate?
Your home sale or purchase is one of the largest assets you own. Would you use a new or part-time accountant to fight the IRS? It takes an experienced full-time agent to be up-to-date on market inventory, documentation and property histories. Using a rookie or part-time agent is the best way to fan any real estate transaction fire.
Will I be working exclusively with you during my property sale or search?
You want one person to assist you on all aspects of the sale or a purchase of a home. You should not get passed around from one half of a real estate team to another, to a personal assistant or a back-up agent when your agent is unavailable. You are focused on your home search or sale and so should your real estate agent. Your agent should accompany you to all property showings, how else can they see your reactions to have knowledge of the property? If the personal assistant is assigned to do your final walk-through and didn't attend the home inspection, they might not be prepared to assess the contractual repairs or changes in the property condition. Always ask a potential agent if they are planning to go out of town during your purchase or sell timeline.
Will you answer all my questions truthfully?
The real estate market is not always hot, great or fabulous. And yes, sometimes there are better times than now to purchase a home. Real estate is like any other market that is based on supply and demand. Verify all information on a property-listing sheet. Look for disclaimers on the bottom of property feature sheets that state all information is not guaranteed. Measure room dimensions; verify square footage, taxes and assessments. Agents in most states are allowed to promote or exaggerate but not intentionally mislead or lie. Whether buying or selling ask your agent what the absorption rate is for your home parameters. This will give you an honest market indicator of what's happening in like-kind properties. How to figure absorption rate: Example: Like kind by style, price, single-family, $200,000-$300,000, number of homes currently for sale: 100, sold last 12 months: 50, 25 sold in last 6 months: 25 sold in last 3 months: 25 months of inventory available.
Looking to buy or sell real estate soon?
Join the 85%* of real estate consumers nationally who will use a real estate agent in their next transaction. The Internet has been a welcome resource to consumers in a business sector that has been dramatically impacted by the Internet similar to the travel industry. The Internet has removed agents from the front line of real estate consumer's paths and the National Association of REALTORSŪ has the numbers to prove it. No longer the keepers of the home information, 74%* of all homebuyers start their search on the Internet before contacting a real estate agent.
The age of the consumer has belatedly arrived in residential real estate. Most agents work hard to qualify their clients, but the new reality is you should qualify your next real estate agent.
*2004 National Association of RealtorsŪ Profile of Home Buyers and Sellers
Mark Nash residential real estate author, broker and commentator in Chicago has been recognized by CBS The Early Show, Bloomberg TV, Marshall Loeb's Dow Jones CBS Market Watch and numerous national and regional journalists as the expert to turn to for real estate consumer advice.
FSBO, what is it? FSBO means For Sale by Owner,... Read More
For those looking to invest in the real estate market?keep... Read More
I'm going to focus... Read More
If you are in the market to purchase a home,... Read More
Real estate investors know how to make money buying distressed... Read More
The concept of negative gearing has been originally developed to... Read More
One of our investor students told us of an interesting... Read More
When considering investment properties, first of all, it must be... Read More
One of the most effective and frequently overlooked methods of... Read More
Did you know that it's a proven fact that a... Read More
I've been teaching people how to buy foreclosure properties for... Read More
Higher interest rates and home prices in the past have... Read More
Do you need to download a Landlord Inventory on-line now?... Read More
The longer you are a landlord the more you strive... Read More
In the United States, less than 10% of all For... Read More
Take me Back to the Black HillsLocated in Western South... Read More
The Escrow ProcessBoth Buyer and Seller deserve the assurance that... Read More
New Marketing and Design Psychology ideas help you stage homes... Read More
Many of you may not be aware of the various... Read More
When looking for a new home or property, buyers ask... Read More
The secret to success in real estate investment is finding... Read More
If you've just bought a house, you may be able... Read More
How do you decide whether to sell your home (or... Read More
Happy New Year, Make it a better world. "Pay it... Read More
If your home has just come off the market and... Read More
If you are looking for a steady, income-producing investment that... Read More
Wrapping a property is a simple concept that can create... Read More
In rural home purchases, the transaction is often subject to... Read More
Are you seeking your little corner of sun drenched heaven... Read More
Another real estate writer's mini course, full of promises and... Read More
To make a good profit in real estate, you must... Read More
The Southern California city of San Diego has all the... Read More
Everyone knows that at the end of a home inspection,... Read More
Are you using the equity from your home to purchase... Read More
Where to from here:One property is great, but It wont... Read More
Selling property privately has many advantages over using an estate... Read More
Do you need to sell your home quickly? If so,... Read More
Suppose you've been trying to sell your home for months.... Read More
Homeownership, in any form, is a big step for most... Read More
Congratulations! You've made your decision; you've chosen your new home... Read More
If you prefer a home that is unique and has... Read More
Many experts say you can't lose if you put your... Read More
When looking for a new home or property, buyers ask... Read More
Houses can have lots of problemsReal estate investing requires expertise... Read More
The Murcia region in Spain benefits from some of the... Read More
This article will show you how to sell your home... Read More
The typical landlord starts off life as a light hearted... Read More
When I was a young child I had many annoying... Read More
There's no question about it: Buying a first home is... Read More
When painting your home for resale, choosing the right colors... Read More
Many are taking advantage of this year's low mortgage rates... Read More
Through our website the most common question that we receive... Read More
Development, it's bound to happen.Simply because there is a large... Read More
So much advice is bandied about on the internet and... Read More
You shower, shampoo, dress your best, check to see if... Read More
Real estate investments come through a variety of different options.... Read More
How would you like to start a bidding war for... Read More
For posting the "Truth" on your website, some FSBO's will... Read More
You decide to sell your home and believe you can... Read More
As a Professional Real Estate Inspector I get to see... Read More
Cyprus is situated in the north-east Mediterranean on the crossing... Read More
Are you profiting from O.P.P.? If not, why not? We... Read More
Title to a property is a record detailing the owners... Read More
Why hire rental property management? Because doing it all yourself... Read More
Over the last two years there has been so much... Read More
Every one should have a home inspection before purchasing any... Read More
Real Estate |