Planning to buy or sell real estate in Bellingham or Whatcom County?

I know that buying or selling real estate is a big step and one that can seem daunting. I'm listing some definitions of terms you may run across in real estate transactions. If you have any questions about the process of selling or buying a home, give me a call at 360-647-1313 or send me an email. I'd be happy to help!

What is a Buyer Agency and how did it develop?

In 1983, a Federal Trade Commission study revealed that over 72% of all home buyers nationwide mistakenly believed they were being represented by the agent who was showing them homes. As a result, laws requiring agents to disclose exactly who they represent have been passed all over the country. When consumers became aware that most agents worked for the seller, they began demanding their own representation. In response, REALTORS began offering exclusive buyer representation to home buyers.

Buyer's agents work exclusively for home buyers, not sellers. This new home buying option ensures that you, as a home buyer, have someone protecting your interests and serving your needs.

A buyer's agent, unlike a traditional seller's agent, can openly discuss the pros and cons of a particular home with you, advise you on how much you should offer for the home, and give you other advice on developing a good negotiation strategy.

By helping you negotiate the best possible price, your total cost - house plus commission - is usually less than the house price you likely would have to pay without the services of a buyer's agent. What's more, most sellers, eager to show their house to as many potential buyers as possible, will agree to pay the commission for you. In fact, a buyer's agent can build this into your agreement to purchase your new home!

A buyer's agent will likely show you a greater variety of homes than a seller's agent. A seller's agent has little financial incentive to show you "for sale by owner" homes, foreclosure or other forced-sale properties, or probate properties. Seller's agents aren't guaranteed a commission on these types of homes. There is no limitation with a buyer's agent.

In short, a buyer's agent can help you get the best possible home at the best possible price.

A seller's agent or listing agent is the works for the seller. If a real estate agent shows you one of his listings chances are the agent you are working with will be a seller's agent or subagent. A seller's agent is required by law to represent the interests of the seller. SELLER'S AGENTS ALWAYS REPRESENT THE SELLER.

A seller's agent or subagent can show you the types of homes you're interested in discuss the physical conditions of each, present any offers you make to the seller, and provide you with information about financing, inspection services, attorneys, title companies, and related services.

Seller's agents are paid through the commission the seller is charged when the house is sold. As a buyer, you do not directly pay a seller's agent. But you pay indirectly, since the commission is built into the price of the home, which you do pay.

Because a seller's agent works for the seller, the agent cannot legally provide you with any information when it is not in the best interest of the seller to do so. An example is the price the seller may be willing to accept for the home. Likewise, a seller's agent must disclose to the seller any information that you share with him, however confidential you think it might be, such as the price you ultimately would be willing to offer for the house.

What is a Dual Agency?

Some real estate agents represent both the seller and the buyer in the same real estate transaction. This typically happens when a buyer working with a traditional seller's agent is interested in a home listed by that agent's company. Dual agents by law must disclose their status and obtain written informed consent from all parties involved.

Because dual agents represent both the seller and the buyer, they cannot give their undivided loyalty to either party or, more importantly, to you the buyer. They cannot, for instance, reveal to you, the homebuyer, the price or other conditions of sale that may be acceptable to the seller without the seller's written consent. Dual agents also cannot provide other forms of negotiation assistance that a buyer's agent can.

A dual agent can perform the other common tasks that buyer's and seller's agents can also perform, such as assisting in the preparation of a purchase agreement, explaining closing costs and settlement procedures and cooperating with attorneys, accountants and inspectors to ensure a smooth settlement.