So you're in the market for a new home on Staten Island. Consequently, on Saturday you say to your spouse lets take a ride and look at homes. So your first stop takes you to Annadale, you heard good things about the area and decided to start there. You spot a home, and there's a for sale sign out front. You grab the cell phone and call the real estate company listing the home, and they put you in touch with the listing agent who gives you all the details. The real estate agent is on another call; she will call back. Okay, moving along you have your Staten Island Advance Real Estate section handy and was intrigued by a new construction open house ad in Tottenville, and off you head out to the open house. The agent on site reveals all the great The home features new hardwood floors radiant heat and in-ground pool. You're impressed, but you still want to take another look at another home your saw on a real estate website and inquire. The agent contacts you set an appointment. Your travels take you to Huguenot, you pull up; there's a friendly real estate agent, he or she greets you and takes you inside the home and remarks about the homes features where a center hall colonial you found online. In both visits, the agents ask you all about your moving plans and financial qualifications. In each instance, if you proceed with an offer, what you reveal will be relayed to the seller about your ability to buy at the seller's price. And it's their legal obligation to do so.
You ask, what’s the point to knowing all of this. Well, there are two sides to every transaction in real estate, the sell side and the buy side. The real estate agent you call from a sign, or by contacting the listing agent directly for any home is representing the sell side or the seller's interest in the negotiation. A listing agent owes the fiduciary responsibility to the seller, which means that agent is negotiating in the seller's best interest. However, that does not preclude an agent from having fair and honest dealings with you. It just means his or her job in negotiations, is to get the most for the home they have listed. Not understanding the consequence of agents position in a real estate transaction is clearly still one of the most misunderstood parts of the home buying process. Now let's get down to the nuts and bolts of it.
There is the little-known secret in real estate, you as the buyer can work with an agent that represents your interest in the negotiations. It's called buyer agency, its an agreement you sign with a real estate agent to find your home, and negotiate in your best interest. I’ll repeat, your best interest.
This level of buyer agency had been a rare occurrence in the past. Most of the time buyer agents were hired by celebrities or other high profile people who did not want their identity revealed when seeking a home. Seeking a buyers agent was done to remove the impact of their status on the price of the home they were seeking. Basically, if Derek Jeter entered the home they were interested, it would be presumed his status would influence negotiations. However, in this day in age, it has been more commonplace for ordinary buyers to seek agents to work on their behalf.
In determining who is working in your best interest, New York State law requires all real estate dealing with an agent must be done at the first substantive contact in residential transactions of 1-3 family homes. It would also be a breach of the listing contract if a sellers agent revealed any information in regards to the homeowners negotiating position.
Here are some advantages of working with a buyers agent; Comparable Market Analysis, revealing at home prices of similar properties in the surrounding area have been listed for and sold for, based on real-time data, not old data through public records. The importance good overall market knowledge cannot be understated.
Information about the property and home value trends in a particular community, which may influence your decision about a certain area can be relayed to you. A seller agent will not provide that knowledge and can’t under their legal obligation to the seller. Their listed price must be justified for the sake of the legal relationship with the seller.
Negotiating the price downward based on the agents knowledge of similar homes and market knowledge. So working with a buyer agent can be worthwhile and put you in a home of your dreams because of their awareness of the market, access to new listing information and updates, and just keeping their eyes on deals that may pop up, when you might not have the information in hand act in time.
And yes, the seller's negotiation position, if the agent is aware can be revealed to you. Some sellers agents will claim dual agency can allow this, the simple answer is it cannot under any circumstances. Some agents are better than others in getting information of this information, so get a good hold of your agent's knowledge and capabilities in your search.
Keeping you in the know, and not the no. Anthony Licciardello Licensed Real Estate Broker and Co-Owner of RealEstateSINY.com… Stay tuned as I give you more insights next week.