New construction -- what's the role of the buyer's agent?
ariadne
16 years ago
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Comments (14)
sparksals
16 years agoxtabi
16 years agoRelated Discussions
New construction - misrepresentation by agent. Long story.
Comments (7)I agree that you should probably do your best to get out of this deal BEFORE they start actually building the house. If you've had this much grief already just over the lot itself, imagine how bad it is going to get when house building starts! Do you REALLY want to go forward with building a house that cannot be situated to take advantage of views and must sit 5' from a cul-de-sac (did you mean a gully or escarpment of some sort?), on a lot that is considerably smaller than you were originally led to believe it would be, while trying to work with a builder who wants to charge ridiculous premiums to upgrade fixtures and finishes to the kind and quality you want, who is already calling you "difficult" and who you already fear will cut corners on your build to make up for their "lost profits" in other areas.... all to wind up living in a neighborhood where all of the houses are duplicates of one of just four designs??? Sorry but I can't help but cringe just envisioning the resulting neighborhood. Even back in the 1960s when my folks bought their first 1600 sq ft tract house, the developer had 12 designs for them to choose. Still the song "little houses made of ticky-tacky" applied all too well to our neighborhood! Yes, go hire a good real estate litigation attorney. But before you go see him/her, spend some time getting the details of exactly what you've experienced down in writing in a more comprehensible way. I'm not trying to be harsh but your post here on GW rambles around so much that it is really difficult to understand what the important issue are. I can tell immediately that you are distressed but it is difficult to tell whether you have a cause of action or not. Based on what sense I can make of your story, I think you probably have a good basis for having the contract rescinded but it depends on exactly what you were told, when you were told it, and what opportunities you had to discover the truth for yourself prior to signing the contract deeds. But, as an attorney I can tell you that when someone comes into my office with such a jumbled explanation of their problem, if I take them as clients I find that I invariably wind up having to spend hours and hours simply untangling the whos, whats, whens, wheres, and whyfores of their story before I can even determine IF I might be able to help them... much less figure out how best to go about helping to resolve the situation. I absolutely HATE taking on a client, charging them for the time spent untangling their story only to have to tell them that I can't do anything for them. I usually wind up giving them their money back. Much as I sympathize with distressed people who have clearly been hurt, in order to survive financially myself, I simply can't spend those kinds of hours for free very often. So a lot of the time when someone comes in with a disjointed story, I wind up trying to shuffle them gently out of the door as quickly as possible without taking them on as clients. So, before you go see an attorney, sit down at your computer, open a word document and create a table with four columns. Label the first column "DATE", the second column "EVENT," third column "NOTES" and the fourth column "SUPPORTING DOCUMENTS". Now, using the table, organize everything that has happened in your relationship with this development company chronologically. The beauty of using a table format is that if you're halfway thru telling what happened in March and you suddenly remember something that happened in February, you can go back, insert a new row in the table, and add in the event. The date column should have exact dates when you know them...if any communications were by email or letter, dig those out and copy the dates down as well as the pertinent info. If you don't know an exact date, provide the month/year or the closest approximation of it that you can. The event column should list FACTS only without any commentary. (For example, "Sales agent told me the lot was X acres extending XXX feet from front to back and XXX feet from side to side at the widest point.) Use the "NOTES" column to add explanations/commentary such as "I later found out that the lot is considerably smaller - see date." So, if the builder told you something and you later found out that the thing he told you was not true, your table will have two entries related to that fact. The date he told you X and the date you found out that X was not true. Each of these two entries will reference the other with a "see date in the Notes column. Make sense? Finally, if you have any documents that support what you're saying, indicate what the document is in the supporting documents column. For example, if you have an email from the sales agent where she tells you that the lot is a particular size, in the Supporting Documents column you would write "email from sales agent (name) dated XX/XX/XXXX, subject line YYYYYYYYYY. Start at the very beginning which would be how and when you first heard about this particular development. Do your best to put down, in chronological order, all the things that happened, all the things you(or your relative) were told by the builder/developer/sales agent prior to entering into the agreement that made you want to purchase this particular lot, the dates when documents were signed, and all of the things that you have been told by the builder since entering the contract. In your Notes column, also identify each person that you mention. (You only have to do this the first time you mention a person but, as an attorney, I would want to know your relative's name and how to contact her for verification, the name of the sales agent, etc.) When you have all the details you can think of laid out in chronological order, go back thru and highlight those details that seem MOST important to your story. Then when you go see the attorney, use the highlighted portions of your document to tell him in a very cogent manner what has happened to you. He'll be much more likely to want to take you on as a client. And, when he agrees to take you on as a client, you can give him the entire history with all the rest of the little details. He may see something in that that seemed trivial to you but may help bolster your case. The other thing you need to do before seeing an attorney is to decide what solution you would be really happy with and then what LESSER solution or solutions you would be willing to live with even tho they wouldn't make you totally happy. For example, you might to have the contract voided, and get your money back with interest on it plus have the builder pay you attorney fees. Certainly if your builder has been defrauding you and lying to you, that would be fair. But Realistically tho, if it would save you from further aggravation, would you not be satisfied to have the contract voided and get, say, 90 percent of you money back even if you had to pay your own attorney fees as long as they were less than say $5000? I ask because you need to totally aware that in situations like this, it is HIGHLY unlikely that you will come out of it totally unscathed. That is a nice way of saying, do NOT bet on getting your money back with interest. If you hang on thru a full trial, and if you have all the facts and all the law on your side, you might win a judgment that says you get your money back with interest...but then you'd have to collect it and builders have a notorious habit of declaring bankruptcy. Unless your judgment says your builder defrauded you and that your damages are due to his fraud, your builder can totally wipe out your judgment by declaring bankruptcy. Happens all the time. And the homeowners are left paying hefty attorney fees and court costs on top of the damages they've already suffered. So while it might be galling to do, it would probably be better to accept early on a settlement offer that gets you out of the contract and actually gets you some portion of your money back. I do wish you the best of luck....See MoreMeeting with buyer's agent, what to expect
Comments (21)An update: the buyer came through the house on Saturday as part of a tour of 13 houses in my area. He is going to make an offer on a house in a neighboring town, so no sale for us. Feedback from the buyer's agent was mostly as expected: - kitchen is dated - wallpaper in powder room has to go - faux painting in LR and DR needs to be neutralized - square footage is good for buyer(3000 sq ft) - rest of house is gorgeous - buyer didn't want a pool I'd already planned to update the kitchen and strip the powder room wallpaper, wasn't sure how the faux painting would be viewed but will repaint if needed. The pool...well, why look at a house with a pool if you don't want one? The house is overpriced given the dated kitchen; new granite countertops and appliances would support the higher price. Lots of interesting comments above. I'll try to address what I can. The poster who said my agent misled me: actually, he didn't; he was clear in his email that it wasn't his buyer. I read the email again and saw my mistake. He had brought up my house to another agent in his office who had a buyer looking for houses in my price range. I didn't think it was ethical to cut out my agent completely and just offer 2.5% to the buyer's agent; I had no idea who the buyer's agent even was, and my agent would have had no incentive to give the buyer's agent my contact information/address so she could show her client my house. Whether my agent's services were worth the additional 2% is of course debatable. I saved him a lot of money that he would have spent marketing the house, and a lot of time. However, I feel he should be compensated for the referral and for any work he might do to shepherd the sale along (not a trivial process in my county). All this for 2%? Maybe, maybe not, but we thought it was a reasonable, low-risk opportunity to test the market and get feedback on the pricing and condition of our house. If you are willing to pay 4.5% commission why are you only listing on zillow? Because I don't really want to sell the house, but would be willing to sell at the right price. When I get to the point that I'm 100% committed to selling the house, I'll definitely be on the MLS. The usual commission in this area is 6%. This off-market strategy is something I really need to investigate further as it's quite new to me. The idea is that in return for an "exclusive" look at a house that's available for sale, the buyer agrees to meet the seller's asking price. That's why the price isn't negotiable in this kind of a listing. The listing agent markets the listing to other agents, rather than to potential buyers. I think the main advantage to the seller is that it keeps the dreaded days-on-market clock from beginning to tick. Any house with DOM over 30 days or so and people begin to wonder what fatal flaw the house has that keeps it from being sold. I live in an area where it's quite common for the following: Agent open house on Friday General open house on Saturday Offers accepted on Tuesday My next door neighbor's house sold like this for $62,000 over asking, 7 offers, late last year. I know my area (Silicon Valley) has a very unusual real estate market. My town is completely built-out, there's no land at all for new building, and it's a very desirable place to live. Inventory is quite low right now. Prices have come down around 10% here in the past couple of years, based on the values of the peak in mid-2008. The comps for my house support this: a house in my neighborhood with the same floorplan as mine sold in 2008 for 15% more than my zillow price. A more recent sale of this floorplan was December 2009 at the same price as my zillow price. Could I get more than the zillow price for the house and have the appraisal support that? Who knows, but I was willing to take that risk. The only issue I have with this agent so far is that he didn't do his homework regarding the buyer who came through the house on Saturday until I started asking questions. At that point he called the buyer's agent and got all my questions answered, but I thought he should have done that without my asking. Otherwise I think he's an honest agent. It's a small world - another agent from his office is a neighbor, and a third is a friend from my son's soccer teams. References will be thoroughly checked if we decide to sign any longer-term listing with him. I was upfront with him as well: I told him my soccer mom friend is someone we'd consider listing with if/when we decide to hire an agent. And I forgot to add that my "listing" agent actually does have a buyer, a different person who is out of the country. Whether this buyer is interested in my house or not hasn't yet been determined. I'm not counting on it, at any rate....See MoreBuying from an Agent -- Buyer's Agent?
Comments (15)If you are not in a rush, take your time and keep your eye on your market. You do not need an agent, at this point. I am looking in to buy in two different states, NY & Florida. I have been watching listings on MLS in both states. In NY I have been looking for about 6 months and have seen prices slowly fall and inventory increase. Sellers have been very rigid about dropping prices but when I see properties sitting over 6 months, without selling, I feel justified making low offers. Watch the comps and note the DOM and final selling price. Look to see how many houses are for sale. This market is tricky. My area is desirable because of proximity to NYC. Prices have remained high but inventory has increased. I find high-end houses are selling but mid-price homes more slowly. I don't understand that. I could be wrong, but there is a glut of mid-price homes available. The comps are confusing because some homes are selling way below list price yet others are selling close to list. I've noticed bidding wars where the houses sold above list price. Hard to make heads or tail of this market. I am using an agent to gain access to properties only. I am not using her to do any searches for us. I have made an offer on a property which she submitted. It was considered a low offer and she was not supportive yet did submit it. The seller would not counter. I'm okay with that as there have been no other offers at this point. We can wait. I think the market in my area is starting to decline; later than other areas but definitely dropping. Sellers are dropping prices after a year. When they sell, they become the comps. My advice is to wait it out and keep an eye on your market. Let this listing sit for a while and watch what goes on in the neighborhood. Good luck, Jane...See MoreJust don't want to use a buyer's agent
Comments (126)Here is a non all inclusive list of what my responsibilities and duties are as a Buyers Agent (I'm sure I can add items as they come to mind. Tasks are not necessarily done in the order shown) Fiduciary Duties Of A Real Estate Agent A real estate broker who becomes an agent of a seller or buyer is deemed to be a fiduciary. Other examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker is held by law to owe specific duties to his/her principal (the person who they are representing), in addition to duties or obligations set forth in a listing agreement, buyer representation agreement, or other contract of employment. These specific fiduciary duties include: Loyalty Obedience Disclosure Confidentiality Reasonable Care and Diligence Accounting Loyalty One of the most fundamental fiduciary duties an agent owes to the principal. The duty obligates a real estate broker to act at all times, solely in the best interests of the principal, excluding all other interests, including that of the broker. Buyers Agent: Must do everything possible to gain an advantage for the Buyer. Obedience An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal that conform to the purpose of the agency relationship. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property. Buyers Agent: Must obey all lawful instruction of the Buyer, is not obligated to obey instructions from the Seller. Disclosure An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party's bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, any intent to subdivide or resell the property for a profit. Buyers Agent: Must tell Buyer everything they can find out about the Seller including the motivation for selling and any reasons the Seller may have for wanting a quick sale. Must tell Buyer everything they can find out about the property, including any known or suspected problems with the property or area. Confidentiality An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property. Buyers Agent: Must keep all information about the Buyer confidential, including the Buyer's ability or willingness to pay more for the property than they are offering as well as the Buyers motivation for buying. Reasonable care and diligence An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person. Buyers Agent: Must prepare themselves through education and study to competently represent the Buyer in all matters. Accounting An agent is obligated to account for all money or property that belongs to his/her principal entrusted to that agent. The duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to them relative to their client's transactions of affairs. Buyers Agent: Must account to Buyer for any money or documents entrusted to them. When starting to work with a buyer months or weeks out: 1. Go over brokerage disclosure with buyer 2. Find out buyers needs as to size, price and location 3. Sign Buyer Broker Agreement 4. Meet buyer at lender & get GFE 5. e-mail a lists that meets their needs 6. After a few lists find out if its applicable or to make changes 7. Preview homes if time permits 8. Check with lender about buyer qualification & get pre-qual letter 9. When meeting with buyer 1st time in the office, reaffirm requirements 10. Do buyers want to see FSBOs and should I look for them? 11. Depending on buyers timeframe tour target neighborhood & look at homes 12. Upon home selection, write the offer accompanied with earnest money 13. Depending on the offer price, a CMA might be needed prior to 14. Make an offer strategy 15. Address inclusions & exclusions of Property 16. Offer is accepted, follow the timelines for: a. Alternative Earnest Money Deadline (if applicable) b. Loan Application Deadline c. Loan Conditions Deadline d. Buyer's Credit Information Deadline (if applicable) e. Disapproval of Buyer's Credit Information Deadline (if applicable) f. Existing Loan Documents Deadline (if applicable) g. Existing Loan Documents Objection Deadline (if applicable) h. Loan Transfer Approval Deadline (if applicable) i. Appraisal Deadline j. Title Deadline (I meet you to review) k. Title Objection Deadline l. Survey Deadline m. Survey Objection Deadline n. Document Request Deadline o. Common Interest Community (CIC) Documents Deadline p. CIC Documents Objection Deadline (I meet you to review the following) 1.) Are there any unpaid expenses or assessments on the property? 2.) Are there any unpaid special assessments on the property? 3.) Are there any unpaid liens on the property? 4.) Are any special assessments being contemplated on the property? 5.) Are any increases being contemplated to the periodic fee? 6.) Is there a monthly association fee? 7.) Is there a quarterly association fee? 8.) Is there a semi-annual association fee? 9.) Is there an annual association fee? 10.) Is the property subject to more than one association fee? 11.) Must a buyer prepay monthly association dues at time of closing? If so, how many months? 12.) Is a working capital reserve deposit required from the buyer? 13.) Is a transfer fee imposed by the association upon sale of the property? 14.) Is a fee imposed by the association for providing a status letter? 15.) Is there a charge for common area access devices? (pool keys, common hallway keys, etc.) 16.) Are any other fees imposed by the association upon sale of the property? 17.) Are there any violations of covenants that the seller has been advised of? 18.) Are there any existing or pending law suits against the association and/or the property? 19.) Is the association still under the control of the developer? 20.) Is there any damage to this property, any common areas, any adjacent properties, or violations of the covenants or rules and regulations that could cause a lien against the property? 21.) Is the sale of this property subject to a right of first refusal by the association or a member? 22.) Does this property include the use of? Deeded Exclusive use (a.) Storage unit(s) (b.) Parking space(s) (c.) Carport(s) (d.) Garage(s) 23.) The regular association dues includes the following: Management Insurance premiums (a.) Structure(s) (b.) Common area liability Common area/element repair, maintenance or replacement Trash collection Water Sewer Heat Hot water Snow removal Roof Indoor swimming pool Outdoor swimming pool Hot tub Tennis court(s) Club house Perimeter fencing Cable/satellite TV Gas service Electric service Road maintenance Common area utilities Exterior maintenance Other q. Off-Record Matters Deadline r. Off-Record Matters Objection Deadline s. Right of First Refusal Deadline (if applicable) t. Seller's Property Disclosure Deadline (we will review together) u. Inspection Objection Deadline (I meet you at the inspection) v. Inspection Resolution Deadline (identify repair items to be corrected) w. Property Insurance Objection Deadline (CLUE Report) x. Closing Date & Final Walk-through (I meet you at walk-through) y. Possession Date & Time z. Acceptance Deadline Date & Time 17. Go over the following Documents with the Buyer a. Review Sellers Property Disclosure b. Review Square Footage Disclosure c. Review Mold Disclosure d. Review Water Source Disclosure e. Review Lead Based Paint Disclosure (if applicable) f. Review Special Taxing Districts (if applicable) g. Go over Inspection Report Prior to closing: a. Contact Utility Companies ( I have list) b. Contact your Home Owners Insurance c. Review HUD 1 and provide copy to buyer d. Buyer get cashiers check made out to Title Co. At closing: a. Make sure everyone has all required docs b. Get keys & Garage door openers...See Moretry_99
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16 years agoariadne
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ariadneOriginal Author