| It
is difficult, if not impossible, to
be all things to all people. Unfortunately, that is precisely what
is expected of Realtors; they are asked to meet the needs if all parties
involved in a transaction.
To understand the functional role of
Realtors, some industry-specific definitions are necessary. Agency
defines any relationship in which one party (the Realtor) represents
another (the Buyer/Seller). In Real Estate, this
relationship is defined in writing.
Realtors can represent a seller in a
transaction or a buyer (known as Buyers Brokerage). State laws
differ, but in many cases Realtors may engage in Dual Agency. In
this case, the Realtor represents both parties (buyer and seller) at the
same time. In most situations, all parties must be advised to the
Dual Agency relationship.
The creation of an agency relationship
also establishes a fiduciary relationship. This simply means that
the relationship requires the parties to exercise good faith and place
trust and confidence in each other.
Once an agency relationship is
established, the Realtor assumes certain responsibilities: personal
performance, obedience, loyalty, accountability, notice and due care.
Personal performance dictates that real
estate agents must perform those functions that protect the interests of
their client. In addition to personal performance, Realtors are
required to obey their client's instructions as long as those
instructions are legal and ethical. A good example of this would
be to honor the request that a sign not be placed in the yard or that
the property not be shown between the hours of three o'clock and five
o'clock.
Loyalty is a key element of
representation. It goes hand-in-hand with personal performance.
If an agent is asked, "Do you think the owner will take less than
the selling price?", it would be a breach of loyalty to respond,
"Yes, I am sure they would because they are so eager to sell."
There are very strict laws surrounding
obligations of fiscal accountability. Earnest money must not be
commingled with other funds and Realtors must be fully accountable at
all times for funds placed in their stewardship.
Notice and due care follow each other in
most transactions. |
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By Definition, due
care requires that agents exercise the degree of care in all aspects of
the business transaction that any prudent business person would.
This carries over to the subject of notice. Failure to
communicate with a client on a timely basis regarding issues that could
affect the transaction constitutes a violation of the obligation of
notice.
Seller (or listing) agents perform numerous
activities on behalf of their clients. Agents assist sellers in
setting a realistic asking price based on researched property sale
comparables; developing and implementing an effective marketing
strategy; offering suggestions regarding ways to make the property more
attractive to potential buyers; and review financing or sale inducements
that may help effect a quick sale.
When purchase offers are received they review
the contract with their seller, noting the merits and shortfalls of the
proposal. They assist in drafting counteroffers, and, ultimately
review the final contract to ensure that their clients' interests are
protected. Listing agents traditionally attend the transaction
closing.
Bound by similar professional obligations to
their clients, Buyers Agents help clients prequalify for a loan.
Prequalifying saves valuable time and disappointment when it is later
discovered that the dream home is outside buyer's financial reach.
Realtors representing buyers scour the community identifying properties
that meet the needs of their clients. They spend countless hours
showing these homes, pointing the negative and positive features, and
how the property fits in the local real estate market.
When a home is finally settled upon, a Buyers
Agent assists in drafting the purchase offer and all counteroffers. When
the transaction goes to the closing table, the Realtor attends the
closing to ensure their client's interests are well represented.
It is important to note that Realtors do not
practice law, and it is always advisable for buyers and sellers to have
their personal attorney review a contract prior to signing.
Laws, liability and the potential of
litigation have made the sale or purchase of property a minefield for
the uninformed.
Realtors can provide service in a variety of
areas to assist purchasers and sellers have a positive real estate
transaction.
CONTACT YOUR EXPERT REALTOR!
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