Caveat Emptor - AKA - Buyer Beware When Buying a Home!
April 26th, 2008 categories: Real Estate News
In the Commonwealth of Virginia ”CAVEAT EMPTOR” - from the Latin : “Buyer Beware”, applies when buying a home. It is up to the buyer to make sure he is getting what he paid for. In Virginia all agents are deemed to work for the seller, whether the agent knows the seller or not. This can easily be changed if the buyer chooses to do so. This is commonly done through a “buyer/broker” agreement, or the “Exclusive Right to Represent Buyer” agreement.The first questions most buyers have is: “How much is this going to cost me?” Well, most real estate brokers will not charge anything extra, as typically commissions are paid by the seller. The next question is: “How does it benefit me?” - The exclusive buyer representation makes a particular brokerage firm and its agent just that, the buyer’s legal representative in the purchase of the property sought. This is a two way street, at least in the Northern Virginia contracts. The agent agrees to represent the buyer exclusively, but by the same token the purchaser agrees to work with that agent alone. This actually makes good sense, since the agent is committing herself to promoting the purchaser’s best interest and perform different tasks for the purchaser. Below is an excerpt from the buyer representation agreement used in the Northern Virginia area that describes an agent’s duties to the purchaser.
“BROKER’S DUTIES. The Broker and Sales Associate shall promote the interests of the Buyer by:
A) Performing the terms of this agreement;
B) Seeking a property at a price and terms acceptable to the buyer;
C) Presenting in a timely manner all written offers and counteroffers to and from the Buyer;
D) Disclosing to the Buyer all materials facts related to the property or concerning the transaction of which they have actual knowledge.
E) Accounting for in a timely manner for all money and property received in which the Buyer has or may have an interest.”
The agreement also mentions the fact that amongst other things, the broker shall maintain the confidentiality all financial and personal matters, plus any other matters the buyer identifies as confidential. The broker will also practice ordinary care, comply with all applicable laws and regulations and treat the sellers fairly.
I think having this agreement in place makes both parties feel better about the relationship. There is a commitment from the agent to diligently work for the buyer, and the agent knows the buyer will not be visiting other Realtors for their services. Since this is a commission based business, the agent feels better about knowing that their hard work will pay off at the end of the transaction. This also makes it easier for the purchaser, having one person as their resource to all the transaction related needs and as he builds a relationship with a particular agent, trust is also built. Trust in knowing the agent understands the needs and desires of the purchaser, that the agent will handle all matters related to the transaction with care, and that the agent is truly looking out the for the purchaser. Having this agreement in place also frees the agent to provide a wealth of information to the buyer that he cannot provide otherwise.
There are many duties that a buyer’s agent performs, and a buyer should rest assured that having a competent agent looking our for his interests and rights will make the home buying process a lot less stressful, a lot smoother and a lot simpler. Buyer agency - it’s a no brainer!
Great blog entry. I would also like to add that exclusive buyer agencies are whole companies that exclusively represent buyers - meaning they do not take any listings. So the exclusive buyer’s agents and brokers who work at these agencies focus 100% of their time trying to get really good deals for buyers. They are very experienced in writing contracts, negotiating lower prices and working through contingencies. There is also zero chance of dual agency because they have no listings. Something to think about.
Great point - thanks for information on why the buyer NEEDS representation!
[…] is a “buyer beware” state. The popular Latin form of this is Caveat Emptor, which literally means, “Let […]