Things Buyers Should Know when Dealing with a Real Estate Agent
* Who does the real estate agent represent? The agent may represent the Buyer or the Seller, or both. If the agent is a Facilitator he does not represent either party. It is very important that the agent provide you with a disclosure of who he or she represents prior to any discussions about the transaction.
* Be cautious. Do not reveal too much personal information, especially when working with a seller’s broker or a facilitator. Disclosing financial information or information regarding your urgency to make a deal may undermine your bargaining position if the broker conveys it to the seller.
* Make sure the real estate agent is licensed, active and in good standing with the Board. (Check that both the broker’s and salesperson’s licenses have not been subject to disciplinary action, such as a suspension or revocation.) Call (617) 727-2373.
* You can negotiate the amount of any deposit.
Both parties need to be clear about who will hold any deposit funds and what will happen in the event of a dispute between the parties. All agreements should be in writing, and no party should sign an agreement or pay any money until they are comfortable that they understand the terms.
If a broker accepts money from you for any reason, that broker must deposit the payment in an escrow account, a bank account which is maintained specifically as a depository for funds belonging to others, in a timely manner. The money must be kept in the escrow account until the transaction is successfully completed or is terminated. It is illegal for a broker to mingle your funds with his own.
If a salesperson accepts your payment or deposit, the salesperson must turn over this money to the broker with whom she or he is affiliated.
* If you make an offer to purchase a property listed by a broker, the broker or salesperson is required to convey your offer to the owner of the property.
* You can negotiate the terms of a purchase and sale agreement.
Purchase and Sale Agreement
A Purchase and Sale Agreement is the contract between the buyer and seller noting the terms concerning the purchase of the house (real property). Essentially, it controls the sale of the home from seller to buyer. It includes information on what is being sold, the sale price, your financing, the type of title you will get, the closing date, the amount of deposit you have paid over and how much of the house price you are financing.
Typical negotiable items include:
The amount of the deposit, the closing date, the number of loan applications you will file and the main terms of such loan (e.g., that your are trying for a fixed rate loan that does not exceed a specific percentage and number of years). You may also rid the agreement of deposit dispute clauses or include one more favorable to you as the buyer should the sale fall through.
Allow enough time in the purchase and sale agreement to obtain financing. The purchase and sale agreement should also specify how many applications for financing constitute “good faith.” Repeated unsuccessful applications can be costly and time consuming. Investigate “pre-approval” before house hunting so you are clear about financial limitations.
If the broker or the seller makes any important promises or representations about the property or what will be included in the sale, those promises must be contained in the purchase and sale agreement.
Allow enough time in the purchase and sale agreement to have a professional home inspection performed. Use references from friends, not the seller’s broker, to find your own inspector. If you are represented by a buyer broker
* On the day of the closing, before papers are passed, make one final walk through of the property to be sure it is in the agreed upon condition.
* It is often wise to seek legal advice prior to signing any documents concerning the purchase of real estate. Ask questions. Don’t sign anything including a contract for representation by a real estate agent until it has been explained to your full satisfaction.