If you are buying a house in Sequim or Port Angeles, dual agency can cost you!   What is dual agency and why could it cost you?   Is it really a big deal to have your own exclusive buyer’s agent?   Watch this video for the answers.

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Can a buyer represent himself when he purchases real estate from a FSBO or from a listing agent?   Yes, but there are traps for the unwary, a few documents that are required by law and some documents that can protect you from calamity.

Buying real estate used to be a matter of a few pages signed by the parties and a simple closing in a real estate office.   It’s not so easy anymore.   In the State of Washington here is a short list of the kinds of documents used in a typical real estate transaction.   Each document has its appropriate use and timing, and each document must be the latest revision, and they are revised regularly to comply with new law and new court rulings.

1. Law of Real Estate Agency Pamphlet
2. Lead Paint Hazards Pamphlet
3. Mold, Moisture, and Your Home
4. Seller Disclosure Statement-Improved Property
5. Seller Disclosure Statement-Unimproved Property
6. Multi-Family Purchase and Sale Agr.
7. Residential Purchase and Sale Agr.
8. Financing Addendum
9. Financing Contingency Notice
10. Buyer’s Sale of Property Contingency Addendum
11. Payment Terms Addendum
12. Optional Clauses Addendum
13. FIRPTA Certificate
14. For Your Protection: Get a Home Inspection
15. For Sale By Owner Addendum
16. Snohomish County “Right to Farm” Discl. St.
17. Snohomish County “Right to Practice Forestry” Discl. St.
18. Disclosure of Info. on Lead-Based Paint and Hazards
19. Identification of Utilities Addendum
20. King County Addendum
21. Land and Acreage Addendum
22. Promissory Note (Fixed Rate of Interest)
23. San Juan County Tax Addendum
24. Seller Warranty-No Foreclosure Sale Pending Add.
25. Island County Addendum
26. Skagit County “Right to Farm” Disclosure
27. Buyer’s Pending Sale of Property Contingency
28. Well Addendum
29. Septic Addendum
30. Short Sale Addendum
31. Title Contingency Addendum
32. King County Seller’ Notices of OSS
33. Kitsap County Septic Addendum
34. King County Buyer’s Declaration of OSS Receipt
35. Homeowner Insurance Addendum
36. Island County Noise Disclosure
37. Pierce County Septic Addendum
38. Oak Harbor Noise Disclosure
39. Kittitas County Surface Water Rights Addendum
40. Extension of Closing Date Addendum
41. Kittitas County Right To Farm Discl. St.
42. Snohomish County Smoke Detector Certification
43. Open Space Addendum
44. Manufactured Home PSA
45. Vacant Land Purchase & Sale Agr.
46. Presale Addendum
47. Presale Addendum – Optional Clause
48. Condominium Resale Certificate
49. Condominium Purchase & Sale Agr.
50. Condominium New Construction/Conversion Addendum
51. Earnest Money Promissory Note
52. Assignment of Buyer’s Interest
53. Cooperative Apartment Addendum
54. General Addendum
55. Inspection Addendum
56. Inspection Response for Form 35
57. Escalation Addendum
58. Feasibility Contingency
59. Neighborhood Review Contingency
60. Pre-Inspection Agreement
61. Counter-Offer (Addendum)
62. Withdrawal of Offer or Counteroffer
63. King County On-Site Sewage System Discl.
64. Back-Up Addendum to Purchase & Sale Agreement
65. Notice to Back-Up Buyer that First Sale has Failed
66. Second Buyer’s Addendum
67. Commission Disbursement Form
68. Buyer’s Agency Agreement
69. Buyer’s Agreement No Agency
70. Selling Broker’s Commission
71. Agency Disclosure
72. Reservation Agreement
73. Notice to Remove Contingency (“Bump Notice”)
74. Notice from Contingent Buyer to Seller (“Bump Reply”)
75. Authorization to Disburse Earnest Money
76. Rescission of Purchase and Sale Agreement
77. Conditional Release of Listing
78. Rental Agr. (Occupancy Prior to Closing)
79. Rental Agreement (After Closing)
80. Lease/Rental Agreement (Residential)
81. Move-In/Move-Out Inspection Agr.
82. Pet Agreement
83. Option to Buy Real Estate
84. Homeowner’s Policy of Title Insurance
85. Receipt for Earnest Money
86. Blank Notice
87. Notice of Rescission of Agreement Pursuant to Form 17
88. Notice of Termination of Agreement for Failure to Pay Earnest Money
89. Failure to Close-Notice of Termination by Buyer
90. Failure to Close-Notice of Termination by Seller-Seller Keep Earn. Money
91. Failure to Close-Notice of Termination by Seller-Seller to Elect Remedies
92. Buyer’s Notice of Waiver of Financing Contingency
93. Buyer’s Notice of Termination (Financing Unavailable)
94. Buyer’s Notice of appraisal Less Than Purchase Price-Termination
95. Seller’s Notice of Consent-Second Contingent Sale
96. Seller’s Notice of Consent-Delayed Closing
97. Notice of Termination Pursuant to Neighborhood Review (Form 35)
98. Notice of Termination (Disapproval of Park Rules and Regs-Form 23)
99. Notice of Termination-(Unable to Assume Lease – Form 23)
100. Notice of Termination (Feasibility Contingency Disapproval-Form 25)
101. Notice of Termination (Public Offering Statement Disapproved-Form 28)
102. Notice of Termination (Resale Certificate Unacceptable-Form 28)
103. Seller’s Notice that Title Commitment is Available
104. Buyer’s Notice of Termination (Homeowner Insurance is Unavailable)
105. Buyer’s Pending Sale Contingency Notice

I have always been a strong advocate of using a professional, in every profession, but here it is especially important that a buyer know when and how to use these documents.   And drafting unambiguous language in each of these primary documents and addendums is critical to avoid disputes and even a transaction that fails because of poor drafting.

More than ever, buyers are wise to use exclusive buyer’s agents to represent them.   When I represent a buyer, I cost them nothing, because the seller pays my commission.   There is absolutely no conflict of interest, because I don’t worry about getting my buyer the lowest price while trying to get my seller the highest price at the same time!

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Buyers of real estate today are taking their searches and their methods to entirely new levels, thanks to the Internet.   Buyers want access to instant information that is free, and they do not want the kind of uncomfortable confrontation that occurs when they have to pick up the phone and call a salesman.

I believe there are two powerful reasons for this change.   First, the Internet has given consumers the ability to search the multiple listing service in their target markets at no cost anytime of the day or night.   When I first started in real estate before the Internet, I had an MLS book that was published every Friday with all the listings in it.   People had to actually come into the office and sit down with me while we thumbed through this two-inch thick book.   Now, buyers can jump on the Internet from the comfort of their homes and search the MLS without even talking to a real estate agent.   They like that.

Second, there is a cultural shift occurring that is fueled by consumers.   Technology has facilitated consumers’ desires to move away from traditional high pressure sales and from traditional advertising.   Buyers do not like being force fed news and advertising without choice.   They don’t like being told what to do.   Consumers want to have the power to decide what they look for, who they talk to (or don’t talk to), and who they do business with.   And they want to be able to come and go as they gather information without being hindered.   The advent of the Internet and the explosive growth of technology on the Internet to facilitate consumers is a Godsend for the majority of Americans.

Even the news that consumers are reading is part of this cultural change.   They are shifting from print newspapers to the Internet at the speed of light, and they are loving the fact that they get to choose what news to read.   A fascinating study by the Pew Research Center’s Project for Excellence in Journalism examined what news consumers are reading when they have a choice:

The question of whether citizens define the news differently than professionals is becoming increasingly relevant. It started with offering visitors a sense of what others found interesting: what news stories were most emailed and most viewed?

Soon, establishment news sites like CBSNews.com allowed users to make their own newscasts. Then, names like Digg, Reddit and Del.icio.us emerged as virtual town squares that became a way to measure the pulse of what the web community finds most newsworthy, most captivating, or just amusing. The trend continues, as even Myspace, the social networking site popular among 20-somethings, has launched a news page (http://news.myspace.com).

Some key findings include:

• The news agenda of the three user-sites that week was markedly different from that of the mainstream press. Many of the stories users selected did not appear anywhere among the top stories in the mainstream media coverage studied. And there was often little in the way of follow-up. Most stories on the user-news sites appeared only once, never to be repeated again in the week we studied.

• The sources user news sites draw on are strikingly different from the mainstream media. Seven in ten stories on the user sites come either from blogs or Web sites such as YouTube and WebMd that do not focus mostly on news.

• The three user news sites differed from one another in subtle ways. Reddit was the most likely to focus on political events from Washington, such as coverage of Vice President Cheney; Digg was particularly focused on the release of Apple’s new iPhone; Del.icio.us had the most fragmented mix of stories and the least overlap with the News Index.

• On Yahoo News—even when picking from a limited list of stories Yahoo editors had already pared down—users’ top stories only rarely matched those of the news professionals.

Consumers are taking control of what and how they gather information.   That is true with the news and the advertising they choose to read, or ignore, and it is true today about how they search for and buy real estate.

Home buyers can search a beautiful map based multiple listing service (see example of an MLS search that is easy to navigate and graphically pleasing), they can search the locale of interest with a Google search to find for-sale-by-owners, to find an exclusive buyer’s agent, to read local real estate blogs, and view photos of the area.   They can do all of this from the comfort of their home without talking to a single salesman.

The vast majority of buyers are not using real estate portals either.   Buyers are no longer pulled by the big names of real estate companies branded on billboards or on TV commercials.   The dominant branding of big names that was such a major factor in the 60′s, 70′s, and 80′s has faded just as the Internet has grown.   Consumer loyalty is no longer to the “branded companies.”   Consumers are loyal to themselves, and that is the way it should be.   Technology has finally given the consumer what they have always wanted–the power to choose.   They choose the information they view, how and when they view it, and they choose what to do with that information without interference from anyone.

Buyers are taking control, and they love it.

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It is an honor for me to know that this blog is an educational tool for real estate agents who are trying to take their game to the next level using cutting edge technology on the Internet and the latest in marketing.

We are living in challenging times in the real estate business. What used to work, no longer works so well. Most agents have figured out that traditional methods   of doing business are no longer as profitable. Time itself seems to have accelerated progress, but that comes at a cost for tradition.

Buyers are very good in a free enterprise system at finding new and unique (read “inexpensive”) ways to buy and sell their goods and services. The real estate industry has been slow in responding to the consumer, but we are seeing new technology, new hardware, and whole new ways to connect buyers and sellers.   And I love the fact that buyers are becoming very savvy.

This blog continues to provide buyers and sellers information that helps them make wise decisions, even in this crazy market. This blog also serves as a great resource for real estate agents who are trying to learn how to negotiate this new paradigm.

My own focus of late has been to connect with buyers. I enjoy working with qualified buyers from outside our area to help them find their ideal home at a nicely negotiated price. If I can represent you as your exclusive buyer’s agent, email me. Let me know your plans and how I can help.

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Will your real estate agent fight for you when you buy a home?   Yesterday I talked with a very savvy buyer. He questioned whether a real estate agent who has a home listed for sale could also act as a buyer’s agent on that same property, in other words, a dual agent representing both the seller and the buyer. The answer in most states, including Washington, is that it is legally acceptable to be a dual agent, provided the necessary disclosures are made in writing. But . . .

This buyer was quite right in feeling that while dual agency is legally acceptable, it is not financially acceptable. His argument is one I have been making for years.

Imagine what a listing agent does for a seller. He or she has worked with a seller for six months to one year to list and market a property, with many many hours of paperwork, planning, writing ads, posting listings, meeting with the seller many times and having phone calls weekly, emailing and talking with prospective buyers, spending numerous hours behind the scenes, encouraging the seller and building an emotional bond, and who has committed his or her best efforts to get the highest possible price from any buyer who does show up.

Now imagine a buyer who drops into town and who calls that listing agent to drive around and look at homes for one afternoon. How can we honestly suggest the agent can fairly represent both the buyer and seller without bias?

The arguments are: it’s legal, all you have to do is comply with the law, there’s nothing wrong with being a dual agent, if you do the full disclosures it’s okay, an agent can be fair and honest and be a dual agent, and so on. All true, but not all buyers are buying it.

Buyers want to be absolutely certain that their agent works for them, and only for them. Buyers want to know that their agent is loyal to them without any potential conflict. Buyers want someone who will fight for them, negotiate for them, and watch out for their best interests in every detail, every contingency, and throughout the process all the way to closing.

Some buyers do not know the dangers of simply calling the listing agent and making an offer through that agent. I strongly recommend buyers retain their own exclusive buyer’s agent. Only then can a buyer be sure he is zealously represented and that someone is working to get the best price and terms possible.

For a real life example of a buyer who got hurt in this kind of scenario, see the Washington Post article, Agents Falling Short on Disclosure.   “Stern believed he was induced to sign a contract on a house with an excessive price because the agent he thought represented him as a buyer’s agent was in fact functioning as an agent for the seller.”

“If the agent’s role is to negotiate for you, how can he get the best price on the home if his real duty is to get the highest price for the seller? ”   See another excellent article on Joel Stern’s case, Well-kept Secret That Harms Home Buyers, in the International Real Estate Digest.

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Buying real estate in Sequim or Port Angeles?   Did you know that you could save a lot of money if you are represented by an Exclusive Buyer’s Agent?   The difference between an ordinary agent and an agent 100% committed to assisting buyers could make all the difference for you.

Why wouldn’t you  use an Exclusive Buyer’s Agent?   Email chuckmarunde@gmail.com or call his cell at 360-775-5424.

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