The
subject of last month’s blog post was a discussion of Buyer Agency in real
estate transactions in North Carolina.
Having covered buyer representation, it seemed appropriate to discuss
the reasons a seller of real property would be well advised to retain a
competent licensed broker to represent him or her in the sale of such a
valuable asset. Let’s begin by
mentioning the consumer information brochure, Working with Real Estate Agents, published by
the North Carolina Real Estate Commission.
This document outlines the permitted agency relationships in North
Carolina, and the important features of each.
Every real estate agent licensed in the state is required to present
this document to a prospective client when the parties begin discussions of
matters substantially important to the interests of that prospective client,
whether buyer or seller.
Licensed
real estate brokers are required to maintain a high level of professional and
ethical standards in dealing with a client and the public, and the failure to
do so can result in disciplinary action by the NC Real Estate Commission. But what are some the practical reasons a
seller would be well advised to retain a licensed real estate broker? After all, the seller might save some money
by avoiding such a relationship and going it alone, right?
One
compelling practical reason for retaining representation is access to the
Multiple Listing Service (“MLS”), a centralized database of information for
homes in a given geographical area. This
database is used very heavily by buyers’ agents, and a home that is not listed
in the MLS may very well go unnoticed by buyers who are ready, willing and able
to purchase it. Further, since most
buyers who become aware of a home via the MLS necessarily come with a buyer’s
agent, it is very likely that buyer’s agent has made sure the buyer is
pre-qualified for any financing the buyer will need to make the purchase. Otherwise, the buyer’s agent is likely
wasting everyone’s time, including his or her own.
Having
a buyer who is represented by his or her own agent express interest in the
purchase of your property is therefore a good thing because you can be reasonably
assured that the buyer is ready, willing and able to proceed to closing. But a represented buyer negotiating with an
unrepresented seller can mean that the seller is functioning at real
disadvantage. The buyer’s agent should
be well aware of current market conditions, including recent comparable sales
prices… the agent should be quite familiar with the contracts, documents and
forms approved by the NC Bar and the NC Association of Realtors… the agent
should be familiar with the processes and procedures for accurately
memorializing final agreement of the parties and taking that agreement through
to closing. However, if you read the Working with Real Estate Agents consumer
information brochure mentioned above, you understand that a buyer’s agent
represents the buyer, not the seller.
The buyer’s agent’s duty is to get the best deal he can for the buyer,
not the seller. So a seller who is not
intimately familiar with the current market… or the contract and legal
documents typically used in a transaction… or the procedures followed to take a
deal through to successful closing, is at a distinct disadvantage if he or she
is not represented by his or her own seller’s
agent—someone who owes all his or her own fiduciary duties to the seller.
A
good, professional, ethical real estate broker/seller agent can therefore not
only successfully market a home for maximum exposure to buyers who are
qualified to purchase the home, he or she can negotiate the best price possible
(with the participation and final approval of the seller, of course), has
sufficient familiarity with the legal documents typically used in a transaction
to make sure that the final documents the parties execute accurately reflect
the deal the seller has actually agreed to, and he or she should be fully aware
of the processes and procedures that take that agreement through to final,
successful closing. Most transactions in
the Charlotte metropolitan area involve hundreds of thousands of dollars… and
sometimes millions. It therefore seems
wise to seek the representation of someone who is truly familiar with, and can
take reasonable control over, all the variables described above, while being
bound by NC law to represent the seller’s best interests throughout the
transaction. It’s really just common
sense.
Abraham
Lincoln famously said, “A lawyer who represents himself has a fool for a
client.” A similar principle applies to the seller of property who decides to “go
it alone.” You may think you know the
current market, but may not be intimately familiar with the legal documents
that will protect you in the transaction.
You may have a good working knowledge of processes and procedures
typically followed to get your transaction to closing, but not have the ability
to get your property maximum exposure to people who are ready, willing and able
to buy it. Unless you are engaged full time in the real estate business, it is
very unlikely you possess all of the
current skills needed to successfully maximize the return on a very valuable—and
in most cases—your most valuable investment.
