And Now for Something…Different?

The Detroit Free Press had a great article this past Sunday. Here's the article on the front page of their Real Estate section. Frankly, they offer some good advice when it comes to choosing a Realtor and their advice stands in any market, not just our current, buyer driven, market.

Is there anything new or different in their advice?

Not really.

For their seller advice, I will harp on my old mantra: list the home at the market value. A home listed at market value will sell more quickly than comparable homes at higher prices. In fact, by listing at market value while comparable homes are higher priced, those homes will help show buyers the value in your home, thereby helping sell your home.

For the buyer advice, I take a dim view of the recommendation not to sign binding documents with an agent. Buyer Agency is a two-way street for the protection of the client and the Realtor® . Obviously, as a Realtor® , that Buyer Agency contract means another client and, likely, another transaction. What is missed is that as a buyer, the Realtor® is now bound, by contract and law, to represent the buyer's interests in matters of real estate.

The Realtor® Code of Ethics states: "When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly."

Clearly, if I have buyer agency contract in effect with a client, their interests are my interests for the duration of the buyer agency agreement. However, if I do not have that buyer agency agreement, show a bunch of homes to a potential buyer, and the sellers of some of those homes ask about my buyers, their intentions and motivations, I have no contract that states I need to hold the buyers' interests as my own. And some of the information that I learn about potential buyers not under contract could easily be used to the benefit of the sellers in purchase negotiations.

To the end that the paper recommends not signing any binding contracts with agents you are not comfortable with, I believe a mention of the Agency Relationship Disclosure Form would be key. The Agency Relationship Disclosure form is not a contract. Rather, it is a disclosure stating how the agent proposes to work on the buyer's behalf. It also gives all parties involved the ability to put signatures and a date on a piece of paper that says the agent did their job and discussed agency relationships prior to sensitive information being shared.

Buyer Agency is a good thing. It lays out exactly what the Realtor® is to do on behalf of the buyer, places the agent under a fiduciary responsibility to the buyer and their interests and also lays out how the buyer is to work with and through their agent. If you are unsure of the documents the agent has asked you to sign, ask them to explain the documents. If they can't or refuse or are simply unable to clearly explain them to your satisfaction, ask their broker to intervene.

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