BUYER AGENT CONTRACTS-WHY YOU NEED THE

July 05, 2024

Buyer Agent Contracts-Why You Need Them!

By Tom Nelson, HUD LLB-Real Estate One-Rochester, MI

Buying a HUD Property Series July 2024

Surgery may be expensive, but would you rather have a medical professional perform it, or buy your own scalpel and sutures and try it yourself? The answer is obvious. This is why you need a Buyer Agency Contract with a Realtor when buying a home.

A recent class action lawsuit and involvement by the Department Of Justice (DOJ) has required some changes in how Real Estate Professional Licensed Realtors do business. One of the issues is that compensation to the buyer’s agent was offered in the MLS at a certain percent, paid for by the seller. Consequently, the seller was paying for the buyer’s representation.

There is a great deal of complexities in representing a buyer making a purchase, these include, but are not limited to:

Providing Agency Disclosure of Fiduciary Responsibilities

Finding the right house

Doing a Comparative Analysis of market value (CMA)

Search PRD Data for assessments

Physically showing the home

Making the correct offer

Discussions regarding home covert video and audio recording devices

Advising on Mortgage Lenders (what to look for)

Negotiating price

Setting and negotiating purchase terms

Fair Housing Compliance

Lead Based Paint Disclosure Compliance (EPA, HUD, CPSC)

Making sure of zoning compliance

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Reviewing Seller Disclosures (Plumbing, HVAC, Appliance, Home Condition)

Listing reputable home inspectors

Review of Deed

Facilitate IRS 1031 compliance when indicated

Giving choice of title companies

Read and review of title commitments

Utilities (options when to turn on)

Cable service providers

Alert to possible Recognizable Environmental Conditions (REC)

List of home insurance companies

Requesting Title Insurance without Standard Exceptions (better buyer protection)

American Land And Title protocol (ALTA)

Discussion of Home Warranty providers

Compliance with Truth In Lending Act and Real Estate Settlement Procedures Act; Integrated disclosure (TRID)

Providing website lists for buyer to contact regarding demographics

Review and correct, if necessary, closing payment amounts

Final walk-through day or two before closing

Representation at the closing table to ensure smooth closing

Review of Homestead Exemption Forms and filing (State of Michigan)

The above are just a few of the many services provided by a Realtor buyers agent. These services are well worth the cost. The buyer’s agent can also negotiate for the buyer to request seller compensation to pay part or all of the buyer’s Realtor fees.