RE/MAX Real Estate Guide and FAQ - Questions and Answers for Real Estate Buyers
RE/MAX Valley Real Estate, Boardman, Ohio

Real Estate Guide

Buying Your Home

 

RE/MAX Valley Real Estate

RE/MAX
Valley  Real Estate
1040 South Commons Place, #102
Boardman. Ohio
(330) 629-9200

RE/MAX Real Estate FAQ - Buying Your Home, Working With A Real Estate Agent

Buying Your Home - Questions and Answers
'Working With A Real Estate Agent'

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When is a Real Estate Agent a REALTOR®?
All real estate agents are not REALTORS®. A real estate agent is a REALTOR® only when he or she becomes a member of the National Association of REALTORS® . The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® (NAR) and subscribes to its strict Code of Ethics.
Read More>> REALTOR Designation
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Can I trust my real estate agent with confidential information?
A REALTOR ® would say that the more information they have, the better they can negotiate on your behalf. However, the degree of trust you have with a real estate agent may depend upon their legal obligation.

Agents working for buyers have three possible choices:

  1. They can represent the buyer exclusively, called single agency,
     
  2. They represent the seller exclusively along with the seller's own agent, called sub-agency. The buyer in this relationship is a customer, and the seller is the agent's client, with whom there is a fiduciary relationship. (Note: the same agent may represent the seller as principal and the buyer as customer.) Because of the complexity of this arrangement and the inherent conflict of interest sub-agency is out of favor in Ohio and else where and rarely seen today.
     
  3. They represent both the buyer and seller in a dual-agency situation. A fiduciary relationship is owed to both the buyer and the seller.
    • (In Ohio, there is also a 'hybrid' dual agency called "split" agency, whereby the buyer and seller are represented by two different agents from the SAME real estate brokerage. The broker of the company is therefore a dual agent, but the two agents have fiduciary responsibilities to different clients.)
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How do I know the real role of my REALTOR® in representing me?
The State of Ohio requires agents to disclose and explain all possible agency relationships to you at first meeting and before you enter into a real estate transaction. Therefore, before you discuss anything that may jeopardize your bargaining position (i.e. your financial position, how much you'd be willing to offer, how quickly you need to buy, etc.), you must, by law, be made aware of the agency relationship you have, or could have, with an agent.

In Ohio, your agent, at first meeting is required to give you an informational brochure that outlines the three basic types of agency relationships that may be entered into as well as how the agent's broker will work with both you and other brokers during a transaction. This brochure is called a "Consumer Guide To Agency Relationships" and your agent will ask you to sign it simply as proof that it was presented. It is not a contract, and in no way obligates you to work with that particular agent or his/her broker.

Further, in Ohio, before an offer is made, the agent is also required by law to specifically identify the role of the agents and brokerages in the transaction you are about to enter into. This is done with an instrument called the "Agency Disclosure Statement".  Your agent will also ask you to sign this document as proof that it was presented and that you have a thorough understanding of who is representing you and how you are being represented. The Disclosure Statement is NOT a contract, and, in no way, does it obligate you to co-operate with, nor pay a fee to any agent or brokerage s/he works for.

It's important to know that you are not required to accept the way the agent wants to represent you. If, for example, you do not want your agent to be a dual agent (representing both you and the seller) you may find another agent to represent you exclusively, or have one appointed to represent you.

Here is a summary of the three basic types of agency representation in Ohio:

  • In a traditional relationship, real estate agents and brokers have a fiduciary relationship to the seller. Be aware that the seller traditionally pays the commission of both brokers, not just the one who lists and shows the property, but also the buyers' agent, who brings the ready, willing and able buyer to the table. The listing broker usually has a Multiple Listing Service (MLS) agreement to split the commission paid by the seller with the selling broker.
  • Dual agency exists if one agent represents both buyer and seller in a transaction. A potential conflict of interest is created if the listing agent has advance knowledge of another buyer's offer. Therefore, the law states that a dual agent shall not disclose to either party any information that will put one party in a better bargaining position than the other. For example. the agent cannot disclose to the buyer that the seller will accept less than the list price, or disclose to the seller that the buyer will pay more than the offer price, without express written permission.

    In Ohio, the situation may also occur where two agents affiliated with the same broker represent one, the buyer, and the other the seller. This is known as a 'split agency' and the same rules to avoid conflict of interest apply as with dual agency.
  • A buyer also can hire his or her own agent who will represent the buyer's interests exclusively. In Ohio, a buyer's agent may also be compensated by splitting the commission paid to the seller's agent by the seller; or the buyer's agent may be paid out of the buyer's own pocket. Because there is a fiduciary relationship, the buyer can trust the buyer's agent with financial information, knowing it will not be transmitted to the other broker and ultimately to the seller

As a buyer you may, of course, choose to represent yourself on properties listed with a real estate brokerage. In that instance the broker will represent the seller and you are on your own to represent your own best interests. Because the listing agent has a duty of full disclosure only to the seller, you should not share any information with the listing agent that you may not want the seller to know.

For more information on agency law, or if you feel that an agent has broken his/her fiduciary trust, in Ohio, you can contact the Ohio Division of Real Estate & Professional Licensing at (614) 466-4100 or on their website www.com.state.oh.us

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How do I find a good REALTOR®?
  • Whether you are a buyer or seller, getting a recommendation from a friend or work colleague is an excellent way to find a good REALTOR®. Be sure to ask if they would use the agent again.
  • You also can call the managers of reputable real estate firms and ask them for recommendations of REALTORs® who have worked in your neighborhood.
  • In any case, whether you are a buyer or a seller, you should interview at least three REALTORs® to give yourself a choice.
  • A good REALTOR® typically works full-time and has several years of experience.
  • All agents in a transaction usually are paid by the seller from the sales proceeds. In many states, this means that if you are a buyer, your agent may be acting as a subagent of the seller. In Ohio, sub-agency is now rare, because it's legal for an agent to represent the buyers exclusively in the transaction and be paid a commission by the sellers.
  • A buyer can hire and pay for his/her own agent, known as buyer's brokers, whose legal obligation is exclusively to the buyer. Agents who specialize in representing the buyer typically have an advanced education certification known as Accredited Buyers Agent or ABR. Look for that designation.
  •  If you are a seller, you should interview at least three REALTORs®, all of whom should make a sales presentation including a comparative market analysis, of local home prices in your area. Don't let an agent 'buy' your listing by choosing the one that gives you the highest asking price for your home. Be sure to evaluate all aspects of the agent's marketing plan and how well you think you can work with the individual.
  • RE/MAX Valley REALTORs® . RE/MAX Associates lead agents of competing companies in experience, education and production  We're the "Real Estate Leaders" in quality customer service.
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What about a buyer's agent?
In many states, it's now common for an agent to represent the buyers exclusively in the transaction and be paid a commission by the sellers. More and more buyers are going a step further, hiring and paying for their own agent, referred to as buyers brokers.

Look for REALTORS® whose name carries the designation of ABR (Accredited Buyers Agent). The ABR designation is awarded to REALTOR® practitioners who complete a comprehensive course in buyer representation.

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Can I use a REALTOR to buy a newly constructed home?
Absolutely, however buyers should be aware of the differences inherent in working with sales agents who are employed by the developer, rather than traditional real estate agents or REALTORS®.

Builders commonly require that if an outside agent is to used, they must be present the first time a prospective purchaser visits a site before payment of commission will even be discussed.  At times, when buyers find the development through a developer's advertisement first without the help of an agent, builders can refuse to pay any commission regardless of how helpful an agent may become later in the process. In the go-go market of the first half of the decade, builders often disdained the use of outside agents, now, however they are offering rich incentives to attract agents' buyers.

It is advisable to call the development first and inquire about their policy on compensating REALTORS® if you are using one. Be wary of those who say they won't. It may mean their ethics aren't up to standards that a REALTOR will bring to the transaction.

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Where can I get more information on agents to represent me?
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