As the weather turns milder, homeowners looking to make a change and renters who are ready for home-ownership are keeping area real estate offices humming with activity. The Department of Consumer Protection has some suggestions for potential buyers and sellers as they enter the real estate market, and will offer a free workshop with the Connecticut Housing Finance Authority (CHFA) later this month.
Although you do not need to hire a real estate agent, when buying or selling property, it makes sense to have a knowledgeable person representing you and your interests when you are entering a major transaction such as the purchase of a home. A Listing agent should have information about what other homes are selling for in your area, how you can best prepare your home for sale, and advice for properly pricing and listing your property.
A Buyer’s agent can help you find and view properties that you may not be able to locate on your own and can offer expertise and advice about making an offer and closing the deal. If you choose to NOT hire a real estate agent when buying or selling property, you should, at a minimum, hire a real estate attorney to advise you on all the legal aspects of the transaction.
If you choose to work with a real estate agent, make sure you’re clear about responsibilities. A Buyer’s agent represents the interests of the buyer in a real estate transaction. The Buyer’s agent’s responsibilities to the buyer are undivided loyalty, obedience, diligence, disclosure, confidentiality, accounting, and reasonable skill and care.
On the flip side, a Seller’s agent or “listing agent” is a person who represents the interests of the seller in a real estate transaction. The property owner — or seller — is the client. The agent’s duties to the seller are: undivided loyalty, obedience, diligence, disclosure, confidentiality, accounting and reasonable skill and care.
All agents’ duties are fiduciary — by law, these duties are owed exclusively to the individual client –- NOT to anyone else.
Choosing an agent:
• Ask for recommendations from people who have just bought or sold a home in your area, or call a local real estate office and ask the manager to recommend an agent who specializes in your type of property and community.
• Visit a few real estate offices. The office itself can tell a lot about the agents you may end up working with. Is the office attractive and organized? Is it easily accessible and open 7 days a week?
• Ask if the agency is a member of a multiple-listing service; if you’re selling, that will allow your listing to be seen by all other agents and their buyers. If you’re buying, you will have the advantage of being able to see everything that’s on the market.
• Interview several prospects. Choose an agent who offers you the services you need, and with whom you feel comfortable.
• Since you will be spending a lot of time with your agent, establish trust and a solid working relationship early on. Discuss and be clear about what is expected of you and what is expected of the agent.
Negotiating and working with your agent:
• Every real estate agent’s commission is negotiable. There is no set percentage or commission to which an agent is entitled. Before signing a contract with an agent, you can ask the agent to take a smaller commission than what he or she proposed. The agent is free to accept or reject your offer.
• The duration of your agreement with the agent is also negotiable.
• Whatever terms you settle on, be sure you understand exactly what you will be getting in return for that commission. If you negotiate a smaller commission with the agent, he or she may exclude some services that would normally be provided. Make sure you’ll be entitled to all services that are most important to you, and that your expectations are written into the listing agreement.
• Before signing with an agent, get answers to all your questions. Be sure you’re comfortable with the agent and that you understand and agree with all the terms of your contract
• A listing agreement signed between you and the agent is a legal contract and binding on all parties. There is no cancellation of the contract once it is signed.
• The contract must be in writing, have a beginning date and an ending date, be signed by all parties to the contract, and you must receive a signed copy.
• Beyond the listing agreement, a written offer is a contract to be signed by the buyer and seller; both parties should receive a signed, executed copy. The same holds true for purchase and sales agreements. Before signing a written offer, the seller must provide a real estate disclosure form to the buyer. Don’t sign any blank documents that you don’t understand. Instead, contact an attorney for assistance.
• Do not sign a “Dual Agency Consent Agreement” form unless you are very clear about its meaning. By signing this form, you are agreeing that your agent is free to represent both sides – buyer and seller– in a real estate deal. This may not be to your advantage! The form outlines the process to be followed to ensure that the sale is completely fair to both seller and buyer. You don’t have to agree to Dual Agency if you feel it’s not in your best interest. A Dual Agency Consent Agreement should only be signed if there is a specific property – or a specific buyer – being considered.
• It’s a good idea to invest in an attorney to oversee your paperwork and advise you on all legal aspects of the deal. Do not ask your agent for legal guidance; agents and brokers are prohibited from engaging in the practice of law and must not give legal advice.
• You have the final word. Don’t let any agent pressure or hurry you into making a decision that you’re not sure about.
A word about real estate appraisals:
Before a property is sold, the buyer’s lender will want a full appraisal of the value of the property. Regardless of who pays for the appraisal, the appraiser’s client is the lender – not the buyer and not the seller. Unless the client (the lender) specifically gives its permission, Connecticut law does not allow appraisers to communicate with anyone but their clients or clients’ representatives about the appraisal. However, the lender must provide the consumer a copy of the appraisal report within three days of receiving it.
“Since it’s one of the most costly and important transactions a consumer will ever make, I encourage everyone to educate themselves fully before buying or selling property,” Consumer Protection Commissioner Jonathan A. Harris said. “This can be done by visiting our website or by attending our upcoming workshop.”
The Department of Consumer Protection and the Connecticut Housing Finance Authority are co-sponsoring a free 2-hour workshop on May 27th at the Berlin-Peck Library. “Tips for Home Buyers: Working with Agents and Lenders” will run from 6:00 to 8:00 pm at the library, located at 234 Kensington Road, Berlin. Please register here.
More information on buying and selling real estate is available on the Department of Consumer Protection website at this link.
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