So what, exactly, does a Buyer Agency Agreement obligate a Buyer to do? Likewise, what does it obligate the Broker to do?

Here are the essentials of a typical Buyer Agency Agreement:

• Appoints a specific Broker (agent, salesperson—ME!) to work with you, but also creates an agency association with the Firm with whom the Broker works. It helps you understand that, not only are you represented by your specific selling Broker, but also by the Firm with whom the Broker has association.
• It asks you to acknowledge receipt of the Law of Real Estate Agency pamphlet, which specifically sets out laws by which a Broker works in the State of Washington.
• Sets out whether or not your relationship with the Broker governs any home you purchase in a given area and time frame, or whether your relationship is only for those homes in which the Broker participates (shows) you. It also clarifies what happens if you buy a home the Broker showed you after the term of the Buyer agreement has passed?
• Allows the Broker to work as a dual agent in a transaction where the Broker represents the seller as their listing Broker, and you as their selling Broker.
• Specifies exactly how and how much the Broker is paid. Your Broker may agree to only accept what the Seller has agreed to pay through the listing agreement the Seller has with their listing Broker. But …
  • What happens if the Seller’s contribution to the Broker’s compensation is minimal or insufficient to pay for all of the services a Broker must perform in a transaction? … or …
  • What happens in For Sale By Owner properties? Agency law in the State says that a broker doesn’t have to show you or pursue properties for you if there’s no compensation involved – but wouldn’t you as a Buyer still want representation by a trusted advisor? (After signing a Buyer Agency Agreement with me, I’ll represent you in a For Sale by Owner transaction, unless the seller is in a distress situation.)
• Possibly one of the most important points in the agreement clarifies what the Broker will do in a Distressed Property Conveyance – one where you wish to participate in a distressed property transaction where the Seller will remain in the home after your purchase is complete, or will somehow gain in the transaction through retention of an interest in the property or will benefit from resale of the property.

In short … as with any critically important matter, you want the assurance that you are working with a professional who understands the laws governing real estate transactions and who will fully and competently represent your interests, and your interests alone (unless you agree to work within a dual agency situation).

“Oh Mom, the agent just opens the doors. We’re perfectly capable of finding houses on our own and we don’t need any other help.”

Yikes! Now this young lady, of whom I am very proud by the way, has been raised to think for herself. However, she’s also seen me work and, gee I would have thought, understood exactly how much work I really do on behalf of my clients. Needless to say, I was terribly disappointed with her assumption that all I do is “open doors!” For Pete’s Sake!

With that in mind, I set out this morning to create a list of what I typically do for most buyer transactions. Certainly not every buyer requires each item, and certainly these are done with an eye to the specific house, experience of the buyer, and so on. I know there’s more, but this is a good stepping off point.  

1.    Find Houses

• Help you identify areas, neighborhoods, commute options
• Set up searches that narrow the list of “everything out there” into homes that more precisely fit your requirements
• Keep an ear to the ground, coupled with hard research, to find homes that are just coming on the market, price reductions, those that have offers that may not have been reported in the MLS, and so on
• Help you narrow down your choices
• What about For Sale By Owner properties?

2.    Open Doors

• Yes, there’s that elusive MLS keybox. And for that, you need me.
• Help you assess any/every house you see with regard to its condition
• Help you assess any/every house you see with regard to how it may fit your lifestyle / needs
• Evaluate the Competition — research and assess your “choice” with regard to asking price, condition, availability, and issues

3.    Financing

• Recommend proven lenders
• Review and help you understand your Good Faith Estimate (GFE)
• Review and help you understand your HUD Statement
• Keep you up-to-date on financing options
• Help you understand/evaluate those you’ve been offered; i.e., does FHA make more sense than Conventional loans … or how about a USDA option, etc.?
• Help you understand how your financing choices may affect a home you are considering

4.    Write Your Offer

• Believe it or not, there’s a lot of legal knowledge that goes behind writing a strong and safe offer for you … and a bit of an art, too. After all, what if you need to back out? Is your earnest money protected, or did you just give it away? And heavens, what if you change your mind?
• Help you put together an offer that’s as strong as possible, identifying any strengths and/or sticking points and presenting them in the offer in the most favorable way.
• What if the house is in a distressed situation? What if it’s a Short Sale? What if it’s Bank Owned?
• Be sure your paperwork is complete and top notch at every step

5.    Open Escrow

• Help you understand forms that escrow may send to you
• Stay on top of the escrow process to be sure your everything is complete so that your home purchase will close on time

6.    Legal Documents

• Be sure that you have copies of all legal paperwork regarding your home
• Be sure that you have a complete copy of the title report
• Read the title report with you to identify any tricky spots
• Be sure that you have a copy of and have read and understand any CC&Rs
• Be sure that you have access to and have read homeowner association documents, including minutes from meetings that might identify future issues with your purchase

7.    Recommend other proven professionals:

• Inspectors
• Roofers, electricians, painters, plumbers, landscapers, etc.
• Attorneys, accountants, tax professionals
• Testing services for wells, septics

8.    Help you identify, locate, and understand specific jurisdictional requirements

• County septics, wells, etc.
• Setbacks
• Permits, etc.

9.    Be your representative

• Present and negotiate on your behalf in a positive and professional manner
• Present you in the best possible light
• Be there for you at every event: all showings, inspections, repair trips, signings, builder meetings, septic inspections, well inspections, etc.

10.    Be the intermediary between yourself … and everyone else! (The listing agent, the seller, title reps, escrow officers, etc.)

• Clarify and draft responses to all communications, being sure that each item is presented in a clear, precise, concise and professional manner
• Schedule appointments to meet everyone’s schedules
• Field endless phone calls and e-mail messages regarding the transaction

11.    Counsel

• Help you remain objective throughout the homebuyer process
• Appreciate your excitement and enthusiasm for the house you find … and help you evaluate that choice as a business decision
• Offer suggestions when faced with difficult or complex decisions
• Act as your sounding board when things just aren’t going smoothly

12.    Offer skillful & professional guidance

• Suggest research you may want to undertake — what is the permit process, what about wetlands, property corners, schools, bus routes, etc.
• Help you identify issues that could cause difficulty down the road, i.e., “lawsuits waiting to happen”

13.    Communicate, communicate, communicate

• Do you know what’s going on?
• Do you know when answers are due?
• Do you know your deadlines?
• Did you get it done?

14.    Be there for you after the purchase

• Answer questions
• Suggest solutions (how do I adjust the hot tub? — or … I love this one … “The alarm keeps going off, could you please call the Seller and see if this is normal?”)

and finally …

15.   Get it done!

• Things fall apart at the most inopportune moments. We’re here to be sure your transaction stays on track and to help when things go sideways!

Repeat or Move-Up Home Buyer — Get Paid $6,500 to Buy a Home!!

• Buyers must have owned and lived in their previous home for five consecutive years out of the last eight years and purchase a replacement primary home.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.  Applies to homes priced at $800,000 or less.
• The tax credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010.  In cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies for the tax credit provided the sale is completed (closed) by June 30, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

1. You are buying a home today that doesn’t have inflated equity
2. You don’t have to sell your current home to qualify for the Tax Credit (although you would need to qualify for both house payments, if applicable)
3. You have sellers willing to pay your closing costs and possibly buy-down already great interest rates
4. You are in the first true “Buyers” Market in nearly 8 years and have the largest selection of homes in 15 years
5. The current downturn in house pricing as well as low interest rates could allow you to buy homes in neighborhoods that were out of reach two years ago

Thanks to Michelle Coolidge of Cobalt Mortgage for this information!