This is boring. Why are you telling me all this?

By
Industry Observer
http://actvra.in/B5p

Recently we went over the way buyer representatives get compensated.  We said that the agent's compensation was part of the seller's listing agreement, and that it is paid by the seller from the proceeds of the sale of their home, and that the listing broker compensates the buyer's broker with a part of that commission.  Yesterday we addressed one issue that sometimes arises early in buyers' journey from renting to owning.  We explained that it's a matter of personal preference whether you first find a loan originator or a buyer representative.  Now let's discuss one of the thoughts on many new buyer's minds upon first meeting a real estate agent.  Why is he/she talking about all this boring stuff?  All I want to do is buy a house.

The state of Minnesota has enacted many laws that protect the interests of consumers, and that makes your purchase of a new home a little less risky.  One law requires that, early in your relationship with a real estate agent (the State calls us licensees), we must provide a written agency relationship disclosure document to you.  We must also explain the contents of that document and be able to prove to the State that we have done that.  That's the reason why you are asked to sign a copy of the disclosure document indicating that you have seen it.  The document explains the various relationships that can exist between consumers and real estate licensees.  If you want a copy of the disclosure document and a detailed explanation of its contents, just give me a call.

Briefly, when you buy a home you'll deal with either a seller's representative, a buyer's representative, an agent bound to the interests of the seller's agent, or a neutral agent who represents nobody and should function with professional detachment. As a neutral the agent can assist parties in accessing the property for the purpose of viewing it, and complete the standard purchase agreement forms at the direction of one of the parties to the transaction.  In any agency relationship, the State specifically requires that certain fiduciary duties are owed to either the buyer, the seller, both, or neither. 

Many buyers (and sellers) find the explanation of agency relationships boring, but I suggest that you pay close attention to the agent's explanation.  Not only will it help you move through the buying maze, but the quality of the agent's explanation may give you some insight into whether this is the person you want to represent you in the biggest economic commitment of your life. 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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Rainmaker
456,560
Kathy Stoltman
Rockwood Realty - Ventura, CA
Ventura County Real Estate Consultant 805-746-1793

Hi Mike,  I think it is important for our clients, especially buyers to understand how we get paid, boring or not!

May 13, 2012 08:57 AM #1
Rainmaker
686,908
Sussie Sutton
UTR Texas Realtors - Pearland, TX
UTR TEXAS Realtors - Rep for buyers and sellers.

True that buyers of homes get that bored look in their eyes. But rules are rules and we all must follow them. Additionally, I would prefer that my clients be pre-approved or at the very least pre-qualified. They all come to me with of I have good credit and more likely than not they are surprised!

May 13, 2012 09:03 AM #2
Rainmaker
653,023
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

Whether they are bored or not there are many part of the paperwork that have to be gone over --- important to cover them all.

May 13, 2012 09:11 AM #3
Rainmaker
446,075
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

I think we have a responsibility to somehow make the agency relationships disclosure as interesting to consumers as it is important.  For me, it's a work in progress. 

May 13, 2012 09:50 AM #4
Rainmaker
1,817,830
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

LOL...I have heard this from several clients.  "just get to the meat of things." They will say.  What they don't understand that all of it is MEAT!

May 13, 2012 08:47 PM #5
Rainmaker
446,075
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Maybe we could illustrate with action figures.  Put red hats on the seller guys and blue hats on the buyer guys.  Of course no hat on the nobody guys (facilitators).  Definitely put a red stovepipe top hat on the wolves in the builders' models;)  

May 14, 2012 07:45 AM #6
Rainmaker
446,075
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Forgot about the dual agents.  Give them a red hat and a blue hat, but hide the hats where they can't find them.

May 14, 2012 07:47 AM #7
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Rainmaker
446,075

Mike Carlier

More opinions than you want to hear about.
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