World West Investments is pleased to announce that it is taking exclusive buyer representation to commercial real estate level. As more buyers realize the benefits of exclusive buyer agency, commercial buyers can realize the same benefits of 100% loyalty and dedication. I have started a new blog especially for the commercial side of my services.
This is a documentary about what antitrust laws are, and what they mean to everyone–consumers, small businesses, entrepreneurs, free enterprise, etc.
It is now airing on PBS–but, if it is not airing in your area, you can watch it here. Before positive changes can happen, we must all be aware of the problem–and most importantly–we must care about the problem, because antitrust affects us all in many different ways, and in many different industries; including the suppression of exclusive buyer agency in the real estate industry.
Learning resources are available by visiting www.fairfightfilm.org/learn.html
If you would like to help–spread the word about this film!
“This is only one agent‘s perception—“and there may be others that share this view, but this person does not speak for all agents, or brokers. She certainly does not speak for me. I am an Exclusive Buyer‘s Broker, and my only concern is showing properties according to what my clients need, and what they can afford. I earnestly make it a point to maintain fiduciary duties with my buyer clients—“and because of this—“I don‘t take listings.
It is not right, nor is it fair, to make sweeping generalizations about buyer agents, because it is a fact that not all real estate agents—“let alone buyer agents—“operate in the same way, nor do they all maintain the same values.”
For more information about FHA mortgages, and other helpful homebuying tips, please visit the official web site of the U.S. Department of Housing and Urban Development (HUD). FHA can help buyers whether they are first time homebuyers, or they are buyers who would like to buy and renovate a fixer. FHA also has a reverse mortgage program for seniors, as well as, programs for buyers of manufactured homes. Information about these different programs can be found by visiting HUD’s loan program page.
Basic eligibility requirements for an FHA mortgage can be found through their knowledge base.
In response to the current situation in the mortgage market, where foreclosure rates are at an all time high, lenders across the board are tightening up their lending requirements, making it more difficult for buyers to qualify for a mortgage.
Gone are the days of 100% loan-to-value mortgages. While some may see this as a barrier to homeownership, it is actually a blessing, because nothing is more financially devastating than a foreclosure on one’s credit history. According to Carolyn Said of the San Francisco Chronicle, who interviewed a number of larger lenders, explained that the new standards fall into the following areas:
“Ability to repay. Buyers are no longer being qualified at the low initial rate. They must qualify for the loan payments at rates equal to what the loan would be if it reset at a higher rate.”
“Down payment. Lenders want buyers to put some money down, even as little as 5 percent or 10 percent. Loans for 100 percent of the price are very hard to get.”
“Credit score. Credit scores range from the high 300s to the low 800s. Borrowers with a credit score above 680 are likely to qualify for a reasonable deal. Between 660 and 680, they may qualify, but the deal could be pricey. Potential borrowers with a score of 620 or less need to raise their scores before they can qualify.”
“Income and income verification. Producing proof that a borrower has a job is key; "stated income" loans are much more difficult to get. Also lenders are unlikely to approve a loan in which the home buyer will spend more than 45 percent of his gross income paying off debt, including paying the mortgage.”
Cite Source from Realtor Magazine,click here.
While these changes may delay homebuying plans for some buyers, this is actually a blessing in disguise–because these new standards will cause buyers to improve their financial situation before taking on the huge financial burden of taking of a mortgage. It will also benefit buyers in the long term, because these new standards will ensure that they stay on path to a healthy financial future. For buyers who are financially capable of maintaining mortgage payments, but who do not qualify due to credit scores, there are still alternatives available such as lease-to-own.
However, buyers need to keep in mind that a mortgage will come into the picture, at some point in the future. Therefore, buyers who choose this route should plan to financially position themselves during the lease period in order to qualify for a mortgage when the lease period is up. Buyers should also have a decent down payment–at least 10% of the purchase price–to demonstrate financial capability to sellers who would consider lease-to-own arrangements.
While it is now tougher to qualify for a new mortgage, the path to homeownership is not dead in the water. It just takes more long-term planning and financial considerations on the part of buyers, which will only help to benefit them over the years. It is well worth the peace of mind that buyers will have–knowing that they have made the right moves to make sure they can stay in their homes, and stay on the right path to a secure financial future.
A real estate company is misinforming the public by saying that buyers actually pay for real estate commissions on listed properties. According to information on their web site, “the buyer is the only person bringing a checkbook to the closing, and both commissions come out of the money the buyer provides.”
While it is true that buyer’s bring the money to the table, the seller’s costs of sale are not the buyer’s expense or responsibility. If buyers actually paid commissions, they would be paying the purchase price PLUS sales commission. However, this is not the case with listed properties.
The truth is that commissions on listed properties are actually deducted from the seller’s side of the closing statement–not the buyer’s side.
This means that the seller receives the purchase price first, and then his or her costs of sale are simultaneously deducted to result in net sale proceeds. The notion that buyers pay commissions on listed properties makes about as much sense as employers paying for their employee’s income tax deductions. For example–an employee’s paycheck–he or she must receive his or her pay first (aka. gross pay) before taxes are simultaneously deducted to result in the employee’s net pay.
Likewise, buyers do not pay the seller’s costs of sale on listed properties, because these costs are deducted from the seller’s gross sale proceeds, which gives them their final net sale proceeds.
It needs to be said that inciting consumer bitterness with skewed information is wrong. It is better to bring about positive changes in the real estate industry without distorting the truth. Buyers can save money by negotiating buyer rebates with agents or brokers in states where it is allowed. It is not proprietary to the company mentioned in this news story.
In Washington State, commissions are negotiable. It is illegal to set commission rates. I am sure that this is the case in all 50 states, since this is a form of price-fixing–an antitrust violation. If sellers want to lower commission rates, then they need to speak up and negotiate it down. If listing agents “don’t allow” less than 6%, then THOSE listing agents need to be reported. However, to say that all real estate agents and brokers are bad is, not only ridiculous, but it is also a sweeping generalization that is unfair to those who are honest, good, and who work very hard for the clients they serve.
As far as rebating buyers, some states don’t allow this. However, in the states where it is allowed, a buyer can negotiate a rebate with ANY exclusive buyer’s agent–or any real estate agent, for that matter. Exclusive buyer agents, however, only work for buyers. They are non-traditional, as discount brokers are, and their priority is to get their clients the lowest price possible on the properties they buy.
Exclusive buyer agents are truly pro-consumer. They don’t take listings, and neither do the companies they work for, so there is never a chance of dual agency–which is a conflict of interest.
Dual agency is a conflict of interest, because a seller expects their agent (and their agent’s company) to get the highest price possible for their property, while a buyer expects their agent (and their agent’s company) to help them negotiate the lowest price possible.
When there are two agents working for the same real estate company, and they are working on opposite sides of each other in the same transaction–these commitments are conflicting. This is dual agency, or “dual representation,” on the part of the company.
Dual agents are required to remain neutral to both parties, meaning, that neither buyer nor seller receive the level of service they originally expected, and signed-up for. However, with Dual Agency, the real estate company makes double commissions. It is a long-standing practice in the real estate industry called “double-dipping.”
The company being interviewed in this news story has contradicted itself by claiming that they do not allow dual representation (as stated on their web site), yet they take listings–so if a buyer wants to make an offer through them, on a home listed with their company–this is dual representation (aka. dual agency) on the part of the company. A dual agent will make money from both sides of the same transaction, while remaining neutral to both sides. Who is really benefitting here?
Buyers can completely avoid dual agency by hiring an Exclusive Buyer’s Agent or broker, because they do not take listings–and neither do the companies they work for. They will also work very hard to save their clients money, because a satisfied client means the possibility of a long-term business relationship.
The greater good in the sense of the real estate industry is not just about touting superior service, because a higher level of service should go without saying. I believe that the greater good goes much deeper than that. It should be about ensuring equal footing for buyers and sellers alike. It should be about real estate professionals doing everything they can within their power to prevent either side from being exposed to dual agency–which is a conflict of interest.
It should mean that traditional real estate companies demonstrate a willingness to relinquish the age-old tradition of double dipping–which happens when one real estate company collects commissions from both sides of the same transaction. It should mean that the real estate industry, as a whole, be completely honest with real estate consumers about all available agency options–including Exclusive Buyer Agency.
Not so long ago, real estate was ruled by seller representation. This is no longer the case. The real estate industry is, and has been, transforming to a level playing field between buyers and sellers. As more consumers become aware of dual agency, they are realizing that it is not in their best interests to consent to it, because dual agency is a conflict of interest. The way buyers can be assured that an agent is truly working for them, is by hiring an Exclusive Buyer Agent, or an Exclusive Buyer Broker.
Until the real estate industry owns up to what is truly in the best interests of consumers, we cannot really begin to speak about a greater good in the real estate industry.
1. Take some time to visit the area you are considering.
A little familiarity will go a long way, when it comes to knowing whether or not the area will suit your taste and lifestyle. Planning a vacation to the new area is the ideal way to experience the area and what it has to offer. Brochures and pamphlets can only do so much. If your move is job related, you will likely have a few home-hunting trips paid for. However, don‘t use this time to get familiar, as you will likely be under some kind of pressure to find a place. Instead, it would be better visit the new area outside of this paid house-hunting time, so you can relax while you see the sights, and all that the area has to offer. By doing this, you will establish a degree of familiarity that will ease any potential "culture shock" when relocating to a new state, and your planning will also benefit from the insight you gain from your visit.
2. Research and plan your move well in advance.
If you can help it, put time on your side. The more time you have to plan your move, the better your plans will be, and the better your move will turn out. There are many resources on the Internet that will help make your plans as solid as possible. For example, MyDreamLocale.com has area reports that tell you about an area‘s cost of living, schools, crime reports, etc. It will also let you do area comparisons, which is always good when deciding where to move. Another resource you can find on the Internet is a move planner. Moving.com has a free move planner that you can use, along with other resources on their site, to help you plan a painless relocation.
3. Find an Exclusive Buyer‘s Broker or Agent in the new area.
When you have done your research, visited the new area, and you have invested enough time into your planning–you are now ready to find an Exclusive Buyer‘s Broker or Agent, if you did not find one already during your initial visit to the new area.
An exclusive buyer‘s broker or agent is one who works for a real estate company that does not take listings. Exclusive Buyer Agency is the purest form of buyer representation. It helps buyers completely avoid Dual Agency–which is a conflict of interest. More and more buyers are realizing that they can get caught in a dual agency situation in one of two ways: (a) When the same broker or agent represents both buyer and seller in the same transaction, or (b) when two different agents, one representing seller and the other representing the buyer, works in the same transaction for the same real estate company–their company becomes the Dual Agent.
The best thing for consumers is for them to have their own real estate representatives, separate and apart from the other side in order to completely avoid dual agency, and not giving consent when asked to give it. As a consumer, you should stand firm when it comes to protecting your interests, and being clear about who is working for you is one of the best ways you can ensure that they are protected.