The First Four Documents
Hello and Welcome To Our First Episode of Coffee Talk With Your Realtor. My name is Jarrod Carozza, and I am your local Realtor with Better Homes & Gardens Real Estate – Reliance Partners. Before we get started on our Real Estate adventure, there are 4 very important documents for us to review and sign. These documents will lay out how the relationship between you (The Buyer) and your realtor (Hopefully Me) is defined, and the responsibilities that I have to you as my client. It is important for us to go over & sign these documents in the beginning so that you have a clear understanding of what I can or must do for your best interests. (READ FIRST ARROW) 1. Disclosure Regarding Real Estate Agency Relationship
-This form is the same for either the Buyer or Seller. It states the responsibilities that each party has to each other.
A. As your exclusive Buyer’s Agent, I have a fiduciary duty to YOU. This means that I must be Honest, Loyal, and use the Utmost Care in my dealings while representing you. I will also have the duty to both you the Buyer, and the Seller to always use good faith, my professional skills & care, and to disclose all known value-affecting facts during our transaction.
B. Dual Agency is when one realtor represents both the Buyer & the Seller in a transaction, but only with the knowledge & consent of both the Buyer & the Seller. You may run into this situation when popping into an open house one weekend and the Seller’s agent says to you, “welcome, are you working with an agent?”. Working as a Dual Agent can lead to one or even both sides blaming the agent for not having their best interests at hand. This tends to be too difficult for most agents to navigate and is not typical.
C. Throughout our transaction period, you will receive many different documents to review and respond to. As I will always be looking out for your best interests, it will also be your responsibility to protect your own interests, and to carefully read & understand all agreements. As with any major life purchase, you may have new legal or tax consequences that should be discussed with a competent professional. Look, I know real estate. I am very good at seeing trends and how they are most likely to affect you, but I don’t know taxes!!!
-Next you will Sign & Date as the Buyer, and I will Sign & Date as your realtor.
2. Buyer Exclusive Representation Agreement
-This form allows BHG as the broker agent, and me as their associate, the right to be your exclusive representative.
A. Because we will most likely be touring multiple homes in different locations, this part will be left as To Be Determined. The Better Homes & Gardens Brokerage also has the obligation to provide reasonable efforts to ensure a successful transaction.
B. You are acknowledging that you have received the Disclosure Regarding Real Estate Agency Relationships, and that we will represent you as this contract states. Better Homes & Gardens is a brokerage which works with both Buyers and Sellers, so we will not discuss the Single Agency section.
As a Dual Agent, BHG may also represent other contending buyers, or sellers who’s listing agent is also with a local BHG brokerage. But don’t worry, Better Homes & Gardens is our company and I am your realtor, and it is important to know that in a Dual Agent situation, we will not disclose any of your confidential information without your permission.
C. Working with Buyers is a huge passion of mine. I enjoy researching the MLS and driving from house to house in search of The One. I would never charge you for allowing me that privilege. In a typical transaction, it is the Seller who is responsible for any commissions due to both the Seller’s brokerage and the Buyer’s brokerage, and their cost is most often determined before the property is even marketed. So these next parts will state “Does Not Apply”. But make no mistake, I’m sure that the seller has built that amount into their asking price.
If a purchase falls through due to the Buyer being untruthful, or if the Buyer wins & collects a judgement from a 3rd party, they may be held responsible for certain costs. Finally, you will need to let us know if you have entered into any other contracts with other brokers.
D. This next section deals with the internet, and how the brokerage has no control over, and is not to be held responsible for, how others may behave online.
E. Here, you are allowing me to assist you in finding homes for sale, and to represent you in any negotiations. Although I can provide you with referrals for different inspections, it is ultimately your decision to choose which services to have performed & which companies to do them. Let’s be honest, this is lawyer-talk to remove any liability from the brokerage in relation to any 3rd party reports. Once we have our offer accepted on The One, I will be responsible for personally doing a visual inspection of the property and to explain how the findings will affect the property. I usually do my inspection within the first 5-10 days of being “in contract”. During the escrow period, we will receive many different documents from the Seller’s side which you & I will need to review, discuss, and sign-off on.
We must keep in the back of our minds that the information provided by the Seller’s side may not always be correct, and that it is up to you to do your own investigations because no brokerage will take on the responsibility for verifying that.
F. The SCOPE OF BROKER DUTY clause really wants you to follow the advice of the Buyer’s Inspection Advisory, and that my knowledge as a realtor is not enough to rely on to buy a house without proper inspections.
It is also important to know that we in the real estate industry do not determine any property values or what decisions a seller will make. We will also provide you with a booklet covering specific environmental hazards that could affect the property.
G. Just keep in mind that Time Is Always Of The Essence, and that it is extremely important for you to review & respond to all documents in a truthful and timely manner. As the Buyer, you will also need to provide certain financial information to ensure your ability to close the transaction.
This information will be used by your mortgage lender to provide the Pre-Approval Letter & Proof of Funds that we will submit with our Offering Package to the seller. (READ GREEN ARROW)
H. Additional Disclosures and Addenda would be listed here.
I. This section determines who would be responsible for attorney costs resulting from any dispute between Buyer & Broker.
J. Item #10 is letting you know that there will be multiple documents that are to be considered as one single contract.
K. Finally, if there is a dispute over commission payments, both real estate agents agree to try and work it out through mediation before suing in court.
3. Buyer’s Inspection Advisory
-(READ GREEN ARROW)
A. So this one’s easy, Get Inspections! The items A.-L. are the suggested minimum inspections that every buyer should have performed. Of course, as we tour properties, we will see that some properties may require more inspections than others.
4. The California Consumer Privacy Act Advisory describes the rights you do and don’t have regarding personal information. The majority of items covered pertain to how Seller’s information may be collected & used.
Episode 1: The First 4 Write-Up
The First Four Documents