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Buyer Broker Agreements. Do you use them?

As a member of some professional real estate groups on Linked In, I recently answered the following agents post and thought it might be of interest to my readers. About 50 other agents and brokers responded as well and made the obvious point that agents protect themselves when they insist on a Buyer Brokerage Agreement. A few agents said they had no problem “working” with buyers without the agreement - that no buyer had stiffed them. What no one discussed was the legal implications for the agent when they don’t excercise their duty to fully disclose agency choices to buyers so they understand the implications of their choices, the limitations and risks to the agent and buyer when the agent agrees to work without a Brokerage Agreement, and all the negative implications for the buyer when no Brokerage Agreement is used - that’s why I wanted to respond with an answer that more fully incompassed the ramifications of all aspects of the subject:

Buyer Broker Agreements. Do you use them?

Jarred - I typically only work with someone if they will sign a buyer broker. It just adds protection. Yet I have a new buyer who sought me out from an open house I had, whose wife is a former Realtor from another state and he’s just adamant about not signing one because they fear it ‘locks them into me.’ I may veer away from them because of this. If they’re already telling me they don’t want to be locked into ONE Realtor already this may be a red flag for me that I’ll end up getting left in the cold. Thoughts?

Robert Whitfield • I will only work with a buyer while under a written Exclusive Buyer Brokerage Agreement - and here is why:

1. You do protect yourself - against a buyer using another agent after you have done all the work - or thinking they can somehow do better than you and contacting the seller directly.

Note: I have a very unique and advantageous Buyer Representation Program that no other agent here in Atlanta can match, so I run very little risk of a buyer leaving me for another agent. For me, the next point is really the driving reason to ONLY work with buyers under a written Brokerage Agreement.

2. You can fully serve and protect the buyer - ONLY when they become your client. This is the one that buyers who don’t want to be “locked in” to an agent don’t get (and many agents completely forget) - it’s all about agency relationships. In the absence of a Buyer Brokerage Agreement, you as the agent can not legally give the buyer the benefits of your expertise and knowledge, or protect them from mistakes, etc, because those services are reserved for “clients”. A buyer who is merely “working” with an agent without a Buyer Brokerage agreement is a customer - and the agent in that case is supposed to provide only ministerial acts - acts that require no judgment, expertise, or industry knowledge - to do otherwise can set the agent up for a lawsuit by the buyer and various other parties (the seller) if something goes wrong. It is in the buyer’s best interests to be represented as a client and never left to fend for themselves as a customer. Agents who work with buyers without representing them risk becoming an “undisclosed dual agent” without realizing it - in most states that can get them into serious trouble with the real estate commission.

While buyers may not know anything about agency, or how to protect themselves in a transaction, or what duties agents owe them when they are a client versus a customer - we as agents and brokers are responsible for fully informing them about agency and their choices of service levels (before we ever work with them) so they know the ramifications of their choice of being a client versus merely a customer.

In the rare cases where I run into buyers who are leery of Exclusive Buyer Brokerage Agreements (usually first-time buyers or buyers who had a horrible agent in the past), I make sure they fully understand the above - I have only had one buyer in ten years not sign a Buyer Brokerage Agreement when they fully understood that it was in their best interest to do so. (Some people need to be saved from themselves!)

I have offered a 1-2 day Brokerage Agreement to a few buyers which is a “try it before you buy it” approach that works well. It allows you to protect yourself, and provide top level representation to your client, and they see how you work and then are comfortable signing a longer term agreement.

I also explain to buyers who seem nervous about “committing” to an agent - “any agent who is willing to work with you without a Brokerage Agreement is not only agreeing to do less than a great job for you, but refusing to protect ‘their own commission and livelihood’, so what in the world makes you think such an agent will protect YOUR interests and money in a transaction if they won’t even protect their own interests?”

I refused to help the buyer who refused to sign my agreement, explaining that it would be a disservice to him. His wife was furious with him and apologized to me, but I will never make an exception to this practice. Its just good business - I am supposed to be the expert - I don’t let my prospects or clients dictate how I run my business.

What do you think?

New EPA Law Affects Owners & Work Performed In Pre 1978 Buildings

This blog covers all metro Atlanta property owners, landlords, builders, realtors, investors, property managers, contractors, electricians, plumbers and painters who engage in any level of renovation…even turn-key between tenants.

Any renovator, owner, landlord, contractor, painter or other workmen, who disturbs lead paint while working in a pre-1978 home, school or day care center, now must be Lead-Safe Certified. If you’re not, you can face tens of thousands of dollars in fines. Plus, you put the health of yourself, your workers and your children at risk, which could result in lawsuits.

Beginning April 22, 2010, new Federal rules came into play which regulates how work is performed that disturbs lead-based paint in homes, child-care facilities and schools built before 1978. You or your workers or contractors, now must be EPA certified and follow specific work practices to prevent lead contamination in pre 1978 properties. And, the EPA defines “disturbing lead” very broadly.

Failure to follow the new rules can result in federal fines of up to $32,500 per day or up to 5 years in federal prison, or both.

The EPA’s new regulations on lead paint took effect on April 22, 2010. The regulations are contained at Title 40, Part 745 of the Code of Federal Regulations. There are some very important highlights:

Effective April 22, no owner, firm, or individual may perform repairs or renovations in “target housing” without certification (40 CFR 745.81). Target housing means any housing constructed prior to 1978, so agents & brokers, landlords, owners and investors working in homes, apartments or condominiums built prior to 1978 should take this seriously.

There are only very limited exceptions, such as where a certified inspector has determined the project is free of lead paint beyond permitted levels (40 CFR 745.82). Private homes with no children or pregnant woman that are owner occupied may also qualify for excluding coverage, but only if the owner signs off that the firm is not required to meet the regulatory practices (40 CFR 745.82).

* Anyone performing renovations has extensive obligations to give disclosure and notice to building occupants in writing prior to renovation, including providing mandating EPA publications (40 CFR 745.84)
* The regulations further include specific work practice standards, so watch out for potential employee personal injury claims and OSHA inspections and violations as well (40 CFR 745.85)
* Even relatively minor work is included in the requirements: generally work disrupting more than 6 square feet of painted area is regulated. (40 CFR 745.80, 745.83) This includes most “turn-key” painting and touch-up unless extremely minor!
* Persons and firms performing work in this arena must provide their customers the EPA’s brochure, Renovate Right (40 CFR 745.81)(note: the publication requirement is already in effect, so if you are not doing that now, you need to start immediately!).

If you or your contractor own or work on pre 1978 properties, make sure you or they have taken and passed an EPA recognized course of instruction to become an “EPA CERTIFIED RENOVATOR”. These are typically one day courses and upon completion you will receive an EPA-approved color photo ID attesting to your certification. These certifications will be good for 5 years according to EPA rules.

For more detailed info on this new law, go to:

http://www.epa.gov/lead/pubs/renovation.htm

Tax Credits Benefit Both First Time Buyers and Currrent Homeowners

  

                                                                                                                                                                                                                                                                                                    

Closing deadline extended to June 30, repeat buyers offered up to $6,500

 Lately, I am getting more and more calls and emails each week asking about the details and deadlines for the home buyer tax credits, so I thought it would be helpful to place a new post on both www.RobertWhitfield.com, and my blog, www.TheWhitfieldAdvantage.com to highlight the main points.  First time homebuyers aren’t the only ones who can claim a tax credit when they purchase a home -current homeowners can take advantage of the tax break as well.

Prospective buyers, both first time buyers, and current homeowners now have until June 30, 2010, to close on their purchase and will need to submit documentation such as their closing statement (HUD 1) along with their tax returns to claim the credit. Buyers can also file an amended return and get their cash even faster. Here are the details:

FIRST TIME BUYER CREDIT

Credit: Equal to 10 percent of the home’s purchase price, up to $8,000 (ie. buy a home costing at least $100Kand you get the whole $8000.)

Who Qualifies for First Time Buyer Credit:

·                     Those who haven’t owned property in the last three years

·                     Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)

·                     Must be at least 18 years of age to claim credit

·                     Purchase price must be $800,000 or less

Important Deadlines:

·                     Buyer have until April 30, 2010, to enter into an accepted (binding) contract for a home purchase

·                     Buyer have until June 30, 2010, to close on the purchase

CURRENT HOMEOWNER CREDIT

Credit: Equal to 10 percent of the home’s purchase price, up to $6,500

Who Qualifies for Current Homeowner Credit:

·                     Those who have owned and lived in their principal residence for at least five consecutive years during the past eight years

·                     Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)

·                     Must be at least 18 years of age to claim credit

·                     Purchase price must be $800,000 or less

Important Deadlines: (Same as for first time buyers)

·                     Buyers have until April 30, 2010, to enter into binding (accepted) contract for a home purchase

·                     Buyers have until June 30, 2010, to close on the purchase

In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac — set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The Atlanta MSA is NOT considered a high-cost market – we are a normal market. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.

What this all means is that if you’re even remotely considering buying a home, now’s the time to do it.

Contact Robert Whitfield at 678-585-9691 for more information about these great Buyer Bonuses, as well as other bonuses offered by various metro Atlanta counties for those who qualify, and various Atlanta homebuilder bonuses as well. To learn about our unmatched client level assistance for Buyers - Direct Broker Representation and the Wise Buyer Program, visit: www.TheHomeBuyersRep.com and click Compare Services – this program provides buyers far more benefits, diligent services, and protections than the “industry standard services’ offered by any other agent/realtor in metro Atlanta.

Advantage Realtors Joins GA MLS

Advantage Realtors joined Georgia MLS on Friday January 22, 2010 and are now members of both of the big main Multiple Listing Services in Georgia - GA MLS & FMLS. This means Advantage Realtors clients and the general public can go to the Advantage Realtors Homescanner Search Engine on any of the company or agent websites and see virtually every Atlanta Homes and Atlanta Real Estate Listings by every real estate agent and realtor firm in Georgia. This also means Advantage Realtors listings will now have a much wider exposure to more agents in Georgia working with buyers. To compensate for not being a GAMLS member, Advantage Realtors targeted advertising to various GAMLS agent offices to advertise thier northside listings to those southside offices - sometimes at considerable expense - now its all done automatically and at significantly less cost.

While Advantage agents always had manual access to GAMLS listings for thier clients, visitors to the Advantage Realtors websites did not have this same access - visitors were seeing primarily FMLS listings which cover 20+ counties around Atlanta.  FMLS and GAMLS have always overlapped, however among industry users such as realtors, FMLS has always been associated with listings in In-Town and Downtown Atlanta and the Greater North Atlanta area. GAMLS has always been associated with southside and outerlying counties including most other counties all over GA. While that still largly holds true, both MLS’s have expanded thier rea estate listings into each others “historical” coverage area and all over Georgia as well.

Broker/Owner, Robert Whitfield said the move to join GAMLS was a good one and will help every area of the companies business, as more buyers and sellers from outside of the metro Atlanta area seek to do business with the company.

How to Find the Perfect Home

                                                

 

 

 

 

Finding the home of your dreams can sometimes be overwhelming. Here are some helpful things to look  for when trying to find the perfect place .   

                                                                                                                                                                                                                           

Tips For First Time Buyers

It’s no secret that mortgage rates have been on the rise over the past few years. However now is the time to get back into the pool, as rates seem to be on the decline once again.

Mortgage Rates on the Decline

It’s no secret that mortgage rates have been on the rise over the past few years. However now is the time to get back into the pool, as rates seem to be on the decline once again.

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