Do I need to hire a real estate broker to sell my home?
No, you do not need to hire a broker. You can certainly submit an offer to the real estate agent representing the seller but if you want assistance in attempting to purchase a home it may be advisable to have a broker who only represents your interests. That broker, like any broker, must give you the written "Mandatory Consumer Disclosure" developed by the Board. The disclosure, among other things, explains the different types of representation (such as a seller's broker, a buyer's broker, and a dual agent) and the broker will disclose his/her representation of you as buyer's broker. You can also choose to sell your own home. A real estate broker is employed when the homeowner has decided to utilize the services of a broker in selling the home and that broker becomes your agent representing you. This commonly occurs when the broker enters into a "listing agreement" with the seller to sell the home
Deciding to hire a real estate broker is an individual choice. You need to assess your own needs and the cost in hiring a broker. Determine whether the services offered by a broker are what you are looking for and if you are satisfied with the fee a broker will charge for such services. Keep in mind that hiring a broker to sell your home for you means you do not need to do so yourself. While you naturally have to pay a broker for his/her services in selling your home there may be advantages to doing this. For example, aside from relieving yourself of the need to sell your home, having a broker advertise it for sale may mean it is reaching a wider audience. In fact, many brokers belong to listing services which means your home is advertised to all those brokers who are members of that listing service. There are many services brokers can offer you so please be sure to ask brokers what services they will offer you in selling your home and what that will cost you.
Some brokers will work for the homeowner in selling the home (often referred to as a seller's broker) while other brokers will work for the buyer in helping to purchase a home (often referred to as a buyer's broker). If you hire a broker to work for you in buying a home that broker then is your agent representing you. You should check with the broker to determine whether the services you want are offered by that broker and what those services will cost you.
Real estate brokers can also assist you in finding an apartment. But keep in mind that you can be charged for that service. Always find out up front if you will be charged for such service since many times the landlord of the apartment is paying a broker to help find a tenant. Also, make sure you get in writing a description of the services the broker will offer in finding you an apartment and if you are charged a fee for such services when it will be due. If the fee is to obtain an apartment for you make sure you are only obligated to pay such fee if you, in fact, have an apartment (e.g. having a lease for the apartment signed by you and the landlord).
Do real estate brokers and salespersons have to tell consumers who they work for?
Yes, and they must do so at the moment they meet with such consumer and discuss a specific property(s). The real estate licensing board has an agency disclosure regulation which requires the broker and salesperson to give a written disclosure (developed by the Board) to a consumer at the first personal meeting they have with that consumer to discuss a specific property. The purpose of this disclosure is to avoid situations where consumers may assume that a broker or salesperson is working for them. Sometimes consumers may tell the broker or salesperson confidential matters assuming that the broker they meet with is working for them. When you deal with a broker ask them who they work for and remember if you meet with a broker to discuss a specific property, they must give you the written agency disclosure form.
Do real estate brokers and salespersons have any duties regarding deposit funds I have paid into?
Yes. Any money that comes into the possession of a broker must be deposited into an escrow account when the broker receives it. Salespersons work for brokers and cannot have control or access to escrow funds. That is the responsibility of the broker. Those funds are held in escrow by the broker and remain there until that time when the purchase and sale transaction is consummated (the closing) or if the transaction terminates with no sale. At such time the broker must account for the money and remit it to the proper party (the buyer or seller). The money is not the brokers and may not be used by the broker for personal or business needs.
An active Broker or an active Salesperson (affiliated with a Broker) may receive a referral fee. An inactive Broker or an inactive Salesperson can only receive a referral fee.
What are purchase and sale agreements?
It is very important that you not only understand the agreement but are comfortable with its terms. The agreement, a contract, controls the purchase and sale transaction. While they are printed by the professional organizations representing agents nothing prevents you from attempting to modify or negotiate contractual terms more to your liking. Of course, the seller would have to agree to such terms. Also, you may want to pay particular attention to provisions dealing with the escrowing of deposit funds and what happens when both buyer and seller both claim such funds following a dispute. Additionally, you may choose to more specifically define what types of things under the agreement can cause a dispute to minimize disagreement over whether there really is a bona fide dispute.
Usually purchase and sale agreements seeks ten or twenty percent of the agreed upon purchase price in deposit funds. If you can negotiate a different amount with the seller, put that in your agreement. Naturally as the buyer you want to put as little down as possible towards the deposit just in case a dispute arises with the seller and your deposit funds remain tied up in escrow during the dispute.
Some purchase and sale agreement notes that both the buyer and the seller must act in good faith. Here is where you may want to define more specifically what constitutes good faith or conversely what actions or omissions indicate bad faith. For example, the typical agreement states that a buyer must obtain financing to purchase the home within a certain number of days and failing to do so the buyer usually has to give written notice to the seller within a certain time period. Sometimes buyers and sellers argue over whether a buyer failed to act in good faith, given that the buyer only applied to one lender. A more advisable course would be to state in the agreement, with some specificity, what applying for financing actually means. You might want such a clause to read that the buyer need only make one (or two) applications for financing to a lender for a fixed rate mortgage of thirty years (or fifteen or twenty) not to exceed an interest rate of 7.5%. Doing this strengthens the buyer's argument that in making two such financing applications, though not receiving financing, he or she complied with the agreement and acted in good faith. Naturally make sure you provide timely notice to the seller, in compliance with the agreement, where you are unable to obtain financing.