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Welcome to McCluskey Real Estate Blog
The opinions expressed are the opinion of the author and not necessarily those of McCluskey GMAC Real Estate Management and Staff
Home Warranties: Who needs ‘em?
2:45 pm - November 30, 2006
A thoughtful buyer or seller of residential real estate may have considered the risk involved in transferring real property. As a seller, liability can occur when systems in the home fail shortly after the sale. For the buyer of a resale home, repairs can be daunting, particularly after the expense of the initial home purchase.
As a seller, a good home warranty can offer at least three important benefits:
- Some warranties on the market today offer seller’s coverage during the listing term. Mechanical system failures can be covered during the listing period for up to one year. The seller simply pays a low deductible.
- Sellers will benefit by having a marketing edge. National Association of Realtor® statistics show that a home warranty can help you sell your home faster and closer to your asking price. A home warranty can alleviate buyer’s fears, allowing the seller to be in a stronger negotiating position and helping the seller to secure the best possible price for their home.
- Most importantly, the home warranty helps to prevent post-sales disputes. if an unexpected failure occurs in the property after the sale, the buyer will turn to the home warranty for resolution instead of the seller, the seller’s agent, or the brokerage firm.
As a buyer, a good home warranty can offer peace of mind!
- The buyers can rest assured that they are prepared for the unexpected. The cost of repairing or replacing appliances and systems in the home can be budget breaking, especially on top of the purchase of a home. Appliances and systems can’t last forever, so buyers need to plan ahead.
- A good home warranty can save buyers time and aggravation. Buyers now have one source for most repair needs with prompt reliable service and low co-pay.
- Home warranties can sometimes be renewed! So buyers can remain protected year after year.
As a real estate agent, manager, or broker, affiliation with a reliable home protection plan can significantly reduce liability in transactions. In some cases, it can be a crucial element in the reduction or elimination of a deductible in your company’s Errors and Omissions Insurance policy. See your policy for details.
Risk management is important for everyone involved in any legal transaction. A home warranty can limit your liability and provide a plan for unforeseen failures. In short: we all need ‘em!
Agency: Don't Buy or Sell Without Understanding It
9:30 am - November 1, 2006
Historically, in Florida and the nation, Real Estate Agents worked as Sub Agents of the seller, whether or not they knew the seller, or had the property listed personally or through their brokerage firm. Many members of the public are unaware of the changes to Real Estate Agency law that have occured since.
Sub Agency is no longer practiced in Florida. During the 1980's, Agency Laws began to change dramatically throughout the country. Since that time, Agency Laws have evolved quickly, changing almost annually for some time. Today, Agency Laws, while still changing incrementally, have stabilized.
Single Agency was the standard of the 1990's. Lawmakers, concerned about the "Buyer Beware" nature of the Real Estate marketplace, wanted to make sure that the public understood the obligations and business practices of Real Estate Agents. Single Agents are able to represent their clientele (buyer or seller) exclusively. The Single Agency Disclosure guarantees the following nine duties:
- Dealling honestly and fairly;
- Loyalty;
- Confidentiality;
- Obediance;
- Full disclosure;
- Accounting for all funds;
- Skill, care and diligence in the transaction;
- Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing; and
- Disclose all known facts that materially affect the value of residential real property and are not readily observable.
In other words, the single agent is fully invested in their client, and will tell them of any motivation or ability to pay that the other party in the transaction exhibits, when and if the Single Agent learns that information.
Agency resides at the Broker level. When an agent lists a seller's property as a single agent, all Real Estate Agents attached to that Brokerage Firm is involved in a Single Agency relationship with the seller. Should the listing Agent, or another Agent in the company, having established a Single Agency relationship with a buyer, find that buyer ready willing and able to make an offer on the listed seller's property, the law requires that all agents in the brokerage firm "Transition to Transacton Broker Status." The Transition requires an agreement by all parties in the transaction and their Agents to a limited form of agency called Transcation Broker status.
Transaction Broker status offers seven duties, similar to Single Agency, but with some limitations:
- Dealing honestly and fairly;
- Accounting for all funds;
- Usng skill, care and diligence in the transaction;
- Disclose all known facts that materially affect the value of residential real property and are not readily observable;
- Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
- Limited confidentiality, unlessed waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
- Any additional duties that are entered into by this or by separate written agreement.
The Real Estate Agents working as Transaction Brokers are bound to work to facilitate the transaction, without violating the confidentaility of any party. In the future, Transaction Broker status will become the standard for most Real Estate transactions. Already, this is the form of representation is practiced by many Brokerage Firms.
No Brokerage Relationship - If you are a buyer in the habit of calling listing agents directly in an effort to "get a better deal," or a seller opertaing as a FSBO (For Sale By Owner) you may end up with no form of agency at all. Some members of the public don't feel it necessary to have an agency relationship, and that's fine. This relationship is disclosed as follows:
- Dealing honestly and fairly;
- Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer; and
- Accounting for all funds entrusted to the licensee.
Clearly the Real Estate Agent must behave in an ethical manner, however, anything that Agent learns about the unrepresented party, be it For Sale By Owner or unrepresented buyer, they will relay to their represented client.
When choosing to work with a Real Estate Agent, be sure your agent understands agency and is able to explain it to you in a way you can understand. You don't have to go it alone!
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