Attention Hoboken Real Estate Agents
Categories: About Realtors
Get Real, Lazy Realtors
If you think you are going to comment on my blog, pitch your services and provide your links and contact information to my readers – guess what? You are wrong. I have not been doing all this work for so many years in order to provide you with a forum to advertise for free. Please start your own friggin’ blog. If you wish to contribute your insight and participate in the discussion in an appropriate manner, as several agents have done, your comments are always welcome.
| Currently 1 Comment »
But I Thought You Were My Agent?
Categories: About Realtors, For Buyers
A Frequently Asked Question by Hoboken Condo Buyers
When I work with buyers and make an offer for them I always do it in contract form. It is more formal and I believe gives your offer more weight. Part of the standard form contract package we use in New Jersey which is provided to us by the New Jersey Board of Realtors includes what is called an “Opinion 26″ letter.
Here is what that looks like: Opinion 26
This letter is legally required and is supposed to tell the buyer who the agent represents, who the title company represents, and that neither the agent nor the title company will provide legal advice to the buyer. If so desired, the buyer can hire real estate counsel. The letter explains to the buyer why it’s a good idea to do so.
Here in the world of Hoboken real estate, when an agent works with a buyer we are not really an “agent” in the legal sense of the word. We don’t normally sign a Buyers Agency Agreement. I don’t really know why we don’t but I’ve heard brokers claim it increases their potential liability. I guess they’re not familiar with the legal concept of “implied agency”. Nonetheless, here is what that agreement looks like:
Without a Buyers Agency Agreement, there is no contractual agency relationship created between the agent and the buyer. That’s why we are not really “agents” but more like sales people working with customer. The buyer is free to stop working with his or her not-really-an-agent at any time. Whether not using an agency agreement is a good idea or not is the subject of another post. In fact, I could probably write a book about our relationship with buyers and the complications that can ensue.
In any event, every time I check the box on the Opinion 26 form that says “I represent neither the seller nor the buyer” I get a call from my buyer saying – but I thought you were my agent!
We are all also required to provide all our customers with a “Consumer Information Statement”. It looks like this:
As a lawyer, I can honestly say it is not the best examples of legal writing I have ever seen. I believe its purpose is to explain to consumers the various relationships and how we can be on both sides of a deal - otherwise known as disclosed dual agency. In most states dual agency is illegal. It is recognized that there is an inherent conflict in serving two masters. Not in New Jersey.
When working as a “Transaction Broker” we are bound to treat our customers fairly and honestly. I think that is always a good idea in any business. Any member of the NAR and NJAR is bound by the Code of Ethics and, if he or she fails to live by it, a consumer can file a complaint. Once an offer is made and accepted, every buyer I have ever worked with has retained counsel. So even if I am not their formal agent or lawyer, they do have someone representing them and advising them on the legal implications of the transaction.
I thought it might be useful to try to expain all of this and let you all see and read these documents at a time other then when you are about to make an offer on a property and have a ton of other questions on your mind. Do you think this is a good system? Does it make sense to you? I’m curious to hear the consumers’ take on this scheme. Thanks for reading. Off to the gym before the snow starts!
| Currently 10 Comments »
A Nightmare Realtor Story
Categories: About Realtors, Hoboken Condos
A True Story As Told to HREN by a Hoboken Condo Buyer
Bob Buyer sees an ad for a property that looks interesting so he calls the listing agent. The listing agent doesn’t call back but instead has a team member (let’s call her Tracy) respond to buyer’s call. Bob Buyer sets up an appointment to view the property with Tracy and believes that Tracy is the seller’s agent since the listing is with Tracy’s firm. Tracy tells buyer that she is the buyer’s agent.
WRONG – the listing agreement for any property is between the seller and the brokerage firm. ALL agents from that firm are agents of the seller. If Tracy wants to represent the buyer and the seller (called dual disclosed agency) it must be DISCLOSED in writing to the buyer that she is a dual agent.
Bob Buyer feels he has no choice but to continue to pursue the purchase of the property with Tracy.
WRONG – A buyer always has the right to terminate a relationship with any agent unless the buyer has signed a written contract (called a Buyer’s Agency Agreement) with that agent. It is uncommon for buyers in Hoboken to sign Buyer’s Agency Agreements. The buyer should have simply sent an email to Tracy saying “thanks but I am no longer interested in using your services” and gone and found his own agent from a different agency.
According to the buyer, Tracy could not have been more problematic. She kept pushing the buyer to raise his offer and, whenever the buyer stood firm she told him he should look elsewhere.
WRONG – Agents when acting as dual agents are still bound by the Realtor Code of Ethics. Article 1 clearly states that Realtors must treat all parties honestly. Tracy cannot put the interests of the seller before those of the buyer.
After agreeing to terms and signing a contract she would not let the buyer see the unit again (she claimed the owners would not let her) even though she knew Bob desperately wanted to take measurements of the kitchen and bathrooms for his contractors to use.
After showing up late for the home inspection, Tracy told the inspector he had only 1 hour to inspect the property even though the home inspector needed two hours.
WRONG – the home inspection is a right given to the buyer in the sales contract. Refusal by the seller’s agent to allow an adequate time for the inspection can be considered breach of contract by the seller.
Tracy was always late for appointments, when the buyer had his lawyer conclude the negotiations because Tracy would not communicate the buyer’s interest to the seller, Tracy yelled at the buyer, and was generally rude.
The property in question was sold for over half a million dollars. Tracy’s brokerage firm earned commission on both the buy side and the sell side. In the end, Tracy’s share of that was at least $6,000, very likely more. Bob Buyer felt there was nothing he could do but grin and bear it.
WRONG – if you as the consumer find yourself in a situation like this there is recourse. Real estate is a highly regulated industry. The NJ Real Estate Commision has a Consumer Inquiry and Response Center. The consumer can contact them by phone, mail, fax, on-line or in person. You can submit an inquiry or file a formal complaint. All Realtors are bound by the Code of Ethics. An ethics complaint can be filed with the NJ Association of Realtors.
When the level of wrongdoing is high enough to potentially cause financial damage to the consumer, a civil action can be brought against the realtor and his or her firm. If you are involved in a real estate transaction you are probably represented by a lawyer. Ask your lawyer for advice!
Why does all this matter? First of all, consumers deserve better treatment than the above scenario. When agents act badly, unethically or illegally it tarnishes the reputation of not just that individual agent but the entire industry. Some of us sincerely wish to raise the bar. Calling out the bad guys helps everyone receive better treatment and raises the standards to which the rest of us are held.
| Currently 6 Comments »
