Larch Tree, Lardeau Valley. Photo: Wild Air Photography
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The biggest advantage of doing it yourself is you can save commission which in turn will let you keep more money from the sale of your property or it may allow you to get a lower purchase price because sellers are not paying out commission. There are disadvantages as well and the biggest one, besides not being familiar with the transaction process and legalities involving a real estate transaction, is that it is hard sometimes to represent yourself and get the best price possible. To be objective and not let your emotions lead the way.
The advantage of working with a Realtor is they do have access to information on properties that most people don’t have. This information could help you get a better price, for both selling and purchasing. They usually have on-going working relationships with bankers, lawyers, inspectors and other people who work in the real estate industry. They can put you in touch with the right people who can best help you. Realtors are continuously educating themselves on the latest legal obligations and trends happening in the real estate industry.
There are several ways to work with a Realtor. Here are some important things to consider when deciding to work with one:
The legal relationship between you and the realtor (and the company that the realtor is licensed under) is called agency. The main significance of the Agency Relationship is that the realtor has the authority to represent you with other people in real estate transactions. It is a Realtor’s legal obligation to protect and promote the best interests of the client.
In a nutshell an agent’s duty is to be upfront, honest and loyal:
- The agent has to protect the client’s negotiating position at all times and disclose all known facts which may influence the client’s decision.
Obey all lawful instructions of the client.
- The agent is obligated to keep confidential all personal and financial information of the client.
- To take reasonable care and skill in performing all duties and to account for all monies and property that is placed in the realtor’s hands while acting for the client.
You can expect competent service from your agent, knowing that the company is bound by ethics and the law to be honest and thorough in representing a property listed by their own agents in a single transaction.
When There Is No Relationship
You may also choose to use the services of a realtor without having any kind of agency relationship. The realtor still has to work in an ethical and moral way and be able to answer questions. Here are the differences. All agents can:
- Explain real estate terms and practices
- Provide and explain forms used
- Assist you in screening and viewing properties
- Inform you of lenders and their policies
- Identify and estimate costs involved in a transaction
- Assist you in establishing your range of affordability
- Prepare offers or counter-offers at your direction
- Present all offers promptly
A realtor who is not your agent cannot:
- Recommend or suggest a price
- Negotiate on your behalf
- Inform you of any information that may give you an advantage or disadvantage when dealing with the other party.
Limited Dual Agency
When an agent represents both a buyer and seller in the same transaction this is called Dual Agency. In these cases the agent has promised loyalty, honesty and full disclosure to both the buyer and seller. It becomes necessary to limit these duties if both parties consent. This consented agency is called Limited Dual Agency.
This relationship has the following limitations:
- The Agent will deal with the Buyer and the Seller impartially;
- The Agent will have a duty of disclosure to both the Buyer and the Seller except that;
- The Agent will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing;
- The Agent will not disclose the motivation of the Buyer to buy or the Seller to sell unless authorized by the Buyer or the Seller
- The Agent will not disclose personal information about either the Buyer or the Seller unless authorized in writing;
- The Agent will disclose to the Buyer defects about the physical condition of the Property known to the Agent.