WHAT IS AN AGENCY RELATIONSHIP?
Agency is a legal concept and the root of all agent-client relationships. The law of agency describes it as a relationship where one party (the REALTOR®) accepts responsibility for representing another party (the client) in dealing with a third party.
A REALTOR® may or may not have an agency relationship with you. If you are a client, you are in an agency relationship; if you are a customer, you are not. The difference between the two relationships is that REALTOR® and brokerage have a much higher level of responsibility to you if you are a client.
As the client, the agency relationship exists between you and the brokerage under common law agency, or between you and the designated agent under designated agency. The essence of the agency relationship is that the brokerage has the authority to represent you as a client in real estate dealings with others.
A buyer or a seller may also choose to use the services of a licensee without requiring an agency relationship. For example, this might occur when a licensee is showing an unrepresented buyer their seller-client’s property or when they approach a seller directly on behalf of their buyer-client. If you are in a customer relationship, do not provide the licensee with any information you do not want the other party to know (ex. motivation, divorce, financial situation, etc.) as the licensee has fiduciary duties to their client to tell them anything they know.
Transaction brokerage occurs when a real estate brokerage or a designated agent represents two or more parties in the same trade, for example, both the buyer and seller, or two or more buyers.
As an impartial facilitator, the brokerage or the designated agent treats both parties in an even-handed and impartial manner. Because the transaction facilitator’s obligations to the clients are restricted, entering into transaction brokerage requires the written consent of both parties prior to the facilitation of a transaction.
The client is not obligated to proceed with a real estate transaction under transaction brokerage. All parties must be provided with an opportunity to obtain independent advice or alternative representation from another brokerage or designated agent as an alternative to transaction brokerage.
A licensee who signs a contract with you as your buyer's representative on behalf of the brokerage will search through listings for you, make appointments, conduct research, and walk you through the entire process of buying a home.
GET YOUR FINANCES IN ORDER
Check your credit report before you apply for a mortgage. Doing so gives you the chance to fix mistakes or correct bad credit behaviors so potential lenders will look at you more favorably
OBTAIN MORTGAGE PRE-APPROVAL
When you've got a pre-approved mortgage, a lender has made an actual commitment (subject to conditions such as a property valuation) to loan you money. It’s best to get pre-approved for a mortgage before beginning your house search. Your lender or mortgage broker will tell you how much they will lend, what the monthly payment will be and what you can anticipate for closing costs. It’s wise to speak with several lenders before choosing one to compare interest rates, costs and fees.
MAKE A HOME SHOPPING LIST WITH YOUR AGENT
Searching for a home involves asking yourself a lot of questions. Where do you want to live? How are the schools in that area? How is the commute to your job? How much are the property taxes? How many bedrooms and bathrooms do you need? Your list will help you to stay organized and focused.
CREATE A HOME BUYING BUDGET
Once you know how much you can afford you can determine how much you want to spend. Remember, additional expenses like heat, electricity, repairs, furnishings, property taxes and maintenance quickly add up. A budget will help you be realistic.
HIRE AN INSPECTOR(S)
When you have chosen a home and signed an Agreement of Purchase and Sale with the seller, it's time to bring in qualified and experienced inspectors to check the condition of the property before you buy it and issue you a detailed report highlighting any defects. If expensive defects are found, discuss with your REALTOR® what options are available to you. You may be able to negotiate repairs or a price reduction, or even terminate the Agreement of Purchase and Sale. Having professional inspections done will give you the truest picture of the home’s condition and help you make a fully informed decision.
FINAL PRE-CLOSE VIEWING
The walkthrough just before the closing gives you one last look at the property you are buying to be sure it is in the condition you offered on and expect. This is not another inspection; it is a home viewing to confirm the condition of the property hasn’t changed since you agreed to buy it. If there are any problems, you should discuss with your REALTOR® or lawyer.