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Frequently Asked Questions
How are you compensated?
EcoRealty does not expect compensation unless
our buyer client has successfully purchased a property with our help. In 90 percent of
such sales, we receive a co-broking commission from the listing agency for
bringing a qualified buyer to the table and for shepherding the deal to closing.
This is often 2% or 3% of the sale price.
Moreover, unlike traditional brokers, we also
help our clients purchase For Sale by Owner properties (the other 10 percent of
sales). We usually build our
commission into the offering price when dealing directly with the owner-seller.
Most often such private sellers are willing to pay our commission. See the Buyer
Agency Agreement for further details.
Can you show us as many properties as
traditional realtors can?
Yes, we can actually show you more
properties. We are members of a cooperative organization of realtors called the
Multiple Listing Service (MLS) Property Information Network and we can show you
every property on the market. Our clients are often the first buyers in the door
of many listed properties.
We also show clients For Sale by Owner
properties.
Many sellers often test the waters themselves before listing with a realtor, and
we generally monitor this private market as well. Ten percent of our sales in
2000 were For Sale by Owner properties.
What does "Buyer Agent First Showing
Only" mean (on the MLS listing sheets)?
This is a condition often laid down by listing
agents in MLS listings. It simply means that if you saw a property for the first
time with a listing agent (does not include open houses), and if you then
engaged a buyer agent to negotiate for you and to evaluate the property, this
buyer agent would not be given a co-broking commission by the listing agent. In
such a situation, the buyer would have to compensate the buyer agent. If you've
been working all along with a buyer agent, the problem does not arise.
Some have questioned the legality of this,
since the buyer should have a right to full representation, with the counsel and
advice that a buyer agent can provide. It hasn't been tested in the courts, but
some experts in real estate law believe it will be shot down if it is.
Most traditional agents seem to offer buyer
agent services now. How does this differ from your service?
The traditional agencies saw the way the wind
was blowing and quickly changed course from opposition to buyer agency to
embracing it. Most smart buyers are insisting on full representation today. For
why should they not get the same level of professional advice and information
and service that the seller gets?
But these self-styled "buyer agents"
are often showing buyers listings that are being offered by their own agency and
so they are dual agents, working for both the seller and the buyer. Even
if the listing is not their own, they are legally subagents of any seller who
has contracted with their agency and are required by law to act in this seller's
best interests.
So this puts them in a bit of a quandary. They
get out of this by disclosing to the buyer and the seller that they are a
"dual agent" and that they cannot give the usual advice to either the
seller or the buyer. So neither party gets the professional advice that should
be part of full client service. All this so that the agency can double-dip and
get commissions for both sides of the deal (buyer and seller). It
is only a matter of time, I believe, before this is outlawed in Massachusetts. It is patently unfair to both buyers and sellers, both of whom have a
right to full representation and full professional counsel.
Is buyer agency a new wave in real estate?
Yes, for residential sales it has only been
around since the early 1990s. Previously, you walked into a real estate agency
looking to buy a house, and the realtor who showed you houses may have been a
perfectly honest person, but he was in fact a subagent of the seller. How
individual realtors dealt with this situation varied, but they often formed a
real friendship with the buyers they worked with and wished they could stop up
their ears when the buyers spoke freely of how high they'd be willing to go in
price, or how they could get extra money from a parent or relative. The realtor
wished he could stop up his ears because he is legally required to pass on to
the seller's agent any information that may be advantageous to the seller.
This was an unnatural, intolerable situation.
Yet many traditional agents still work as seller's subagents, working for the
seller as a subagent of the listing agent, even though they are showing buyers
houses listed by other agencies. For this reason, the Commonwealth of
Massachusetts now requires all realtors to disclose to buyers, at their first
meeting, whom they are representing. It comes as a shock to many buyers to learn
that everyone, both their realtor and the seller's listing agent, is working for
the seller. No one is working for them or in their best interests.
Buyer agency for residential sales emerged in
the early 1990s in many states, with the enthusiastic support of Ralph Nader and other
consumer advocates. After fierce initial opposition by the real estate industry and one
landmark U.S. Supreme Court decision, buyer agents have become an integral part
of the real estate landscape.. But only exclusive
buyer agents provide full representation and they alone are free of conflicts of
interest. They do not need to plug up their ears or cover their eyes or mouth
(as in the three monkeys).
They can speak freely with their buyer clients and vice versa.
Won't I hear of new listings earlier if I
work with a large agency that has most of the listings in town?
If that happens, it is quite rare. And it's
rare because it violates the regulations of the Multiple Listing Service, a
cooperative network that no real estate agency can survive outside of. I often
hear from listing agents that they have a property coming up that might fit my
client's profile, but they refrain from telling me anything more than the town
and the property's features. Probably they do the same with their colleagues.
But even the listing agent cannot show the property to his own clients or
customers until it comes on MLS. Occasionally the seller will inform friends
about the listing and let them in the house earlier. But usually it is in the
seller's best interests to give all interested buyers an opportunity to make a
bid on the house.
EcoRealty was one of the first in the Valley
to provide daily email updates of new listings. Now with MLS's WebHunter, this
is fairly common. We are still one of the only agencies that provides our
clients access to an MLS extranet, where clients can access MLS itself and see
new listings (with addresses) the moment they come on, as soon as any realtor
can.
It is a very tight market here in the Valley
and buyers have to be quick on their feet, but if they are energetic and
committed buyers and in regular communication with us, they do get an
opportunity to view virtually any property that comes on MLS--with the rare
exceptions of properties previewed by friends or relatives of the seller.
How do you deal with environmental health
issues differently from other realtors?
We bring a greater breadth of knowledge to the
property regarding environmental health issues. Many of our clients, or their
children, have allergies or asthma or other environmental sensitivities, and we
look at properties with a trained eye for signs of, say, mold or moisture or
offgassing materials. In the same way, we look at the drainage of the site,
circulation of air around the exterior of the house and in each room, water
supply, any potential biohazards. We check nearby powerlines with a gaussmeter
for electromagnetic field strength. We follow environmental health news for
Hampshire and Franklin counties, and have marked certain areas with red flags on
our atlases (due to polluted soil, microwave transmittal towers). We offer, to
clients with young children purchasing an older home, far more information and
advice on lead paint abatement than most realtors. We are not, though, experts
or qualified air quality or water quality experts, and we generally refer the
buyer to qualified professionals when we suspect a problem in a house our buyer
is making an offer on.
Are you "green" in other ways,
apart from this environmental health focus?
Yes, we have worked with organic farmers,
horse and llama farmers interested in a more organic approach, clients
interested in green building or in cohousing, environmental educators and
nonprofits, but most often with clients simply interested in a healthier, more
natural living environment.
We have a fairly good layperson's
understanding of passive solar design, energy efficiency, daylighting, and
ventilation, especially since light and air are such important features of a
healthy house.
How do I know what price to offer on a
property?
We generally do a rough estimate of the fair
market value of the property on the spot, if the buyer is interested in making
an offer. If time permits, we send the buyer data on recent sales in that town.
We also try to find out the price the current owner paid for the property.
We then price out the property by two or three
different methods to arrive at the fair market value. This is usually provided
in writing (often in an email). Occasionally, when time permits, a full
comparative market analysis is provided. On the basis of this, we suggest a
negotiation strategy. This is perhaps a buyer agent's most critical service to
his or her client, for it could save the client many thousands of dollars if the
property is grossly overpriced.
But the buyer client makes the final decision on what is
offered.
What towns do you cover?
We cover all of Hampshire and Franklin
counties, as well as occasional short forays across the two-county border into
Berkshire, Hampden, and Worcester counties. We refer clients who wish to also
search in southeastern Vermont or southwestern New Hampshire to an excellent
exclusive buyer broker in Brattleboro, Vermont. We also do nationwide referrals
to other exclusive buyer agents.
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