Part 5 of 5
This is the final entry in my series on agency….for now! There’s so much info around this subject that I could go on for a few more entries, but there are some other subjects I want to tackle before the year gets away from me. I assure you, I will revisit this topic again in the future.
I also want to say I am sorry for the order I presented these in. After looking over the last few weeks, I realized there was a definitely a better way to sequence this information. I am and will always be a teacher at heart, so in looking over my “lessons” I believe I could have done a more thorough job of putting these 5 post in an order that would have served the concept better…..oh well! You live and learn!
The legal agreement
Before I can begin working on your behalf as an agent, I need an agreement signed that gives me permission to represent your interest in a real estate transaction. I can’t make offers, negotiate, or contact a seller or buyer on your behalf until I have something in place legally. My personal business policy is to not even look at homes with a buyer without an agreement in place and pre-qualification letter or proof of funds from a lender on file.
Exclusive Buyers Agency Agreement
The agreement needed for a buyer is called the Exclusive Buyers Agency Agreement. This form spells out my obligations to the buyer, their role in the process and my expected commission. Like all of the legal forms real estate agents use, the buyers agreement is written by the NC Bar Association. This form gives exact length of our agreement the type of property we are searching for and even specifies a general location for the property.
I am licensed in NC and can practice real estate throughout the entire state, but I primarily work in the Northeast corner called the Albemarle region. This region includes a lot of ground geographically but I focus on Camden, Currituck, Pasquotank, Perquimans and Chowan county. It is possible that I have a client who is searching in multiple areas. The fact that the legal form spells out the region, it’s possible to have multiple agents working on behalf of a buyer for multiple regions in the state. It would certainly behoove a buyer to let the agents know you are searching in many locales but the buyer should choose an agent familiar with the area. It would not be of my clients best interest for me to search for property in the mountains for them. I am legally able, but not really qualified to guide them.
Commissions (For Sale By Owner…)
The commission rate expected is spelled out in the agreement. I have another video and blog series on Commissions, Concessions and Conveyances on the Blog and my YouTube channel. (See episode 1 of Terms Tips and Tricks). The series goes much more in depth than I will here. Most of the time the seller pays the buyers commission but if the seller isn’t or the amount isn’t the agreed upon amount in our Buyers Agency Agreement, the buyer is responsible for the full amount. This situation most often occurs when a home is being sold For Sale By Owner. We will discuss FSBO next week!
You have the right to….
Your rights and obligations as a buyer are also clearly defined in the agreement. As a buyer, you are certainly a big part of the transaction process and you should know and understand what your responsibilities are. If you aren’t sure of the agreement or if you have specific questions be sure to ask your agent. Its their job to make sure you are comfortable with every step of the process.
Dual Agency
Last week we discussed dual agency. In the Buyers Agency Agreement you have to decide if you are comfortable with the firm and the agent representing both sides. If you aren’t sure how that works please go back and watch and read that entry. Its a big concept with lots of moving parts and you want to make that decision from a standing of information and knowledge.
Thats all folks….
If you have stuck around for all 5 entries in this series I want to say thanks. Agency is a big concept with much to consider. If you or anyone you know if looking to buy or sell, its important to understand how agency works. Please pass these post and videos along to them. That gesture could really prove to be valuable as you walk through a real estate transaction and remember there is plenty of additional content on YouTube and my web site.
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Chris Whitehurst
Berkshire Hathaway-RW Towne Realty
252 312 2263