I don’t know how many of you had a bad experience either buying or selling real estate, but when I think of the first time I did I’m embarrassed to say that I did not know my proverbial assessments from my easements. My first broker was a “friend” who never told me that he was a Seller’s agent and that because he represented the Seller and not me, he was bound by law to disclose to the Seller anything that I told him. Nothing that I told him was “Confidential:” Not the price I was willing to pay; not the assets I had or not what I was willing to give up to get the house!
Especially as a First-time Home Buyer, here are three things to keep in mind:
Find Out for Whom is the Broker or Agent Working?
Who does the broker/Agent represent? Is it the Seller or the Buyer? Some states permit “Dual Agency” where the broker/agent can represent both sides. Before you read any further, if you’re buying or selling real estate in New Jersey, you should familiarize yourself with the Consumer Information Statement first.
Learn and Understand what is meant by an “Agency Relationship”
There are six components to Agency or Fiduciary Relationships. Fiduciary relationships are relationships of trust, like those you have with your doctor, attorney, accountant or psychiatrist. You are entitled to have:
Confidentiality: Any information you share with your agent must be kept confidential until you give him permission to share it.
Accounting of all funds: Your agent is supposed to keep accurate records of any property or money that are due to or from you.
Loyalty: Your Agent is supposed to put your interests above everyone else’s — including his own.
Reasonable Care and Due Diligence: Your agent is supposed to protect your interests
Disclosure: Anything your agent discovers about the other party that will affect your decision to move forward or not must be disclosed to you unless you have given your agent permission to act as a dual agent at which point the other client must give the agent permission to share that information. All material defects must be disclosed.
Obedience: Your agent must follow your instructions as long as they are legal and within the purvue of his job as your agent.
Make Sure That You Hire Your Own Attorney — Someone Who Will Protect Your Interests!
Every state is different, but New Jersey Requires that the Buyer and the Seller Sign “Opinion 26” which advises both the Buyer and the Seller to get their own attorneys before they go to “Contract.” Remember, although all the parties agree in the transaction that the house must be sold, the interests of the buyer to buy the house at the lowest possible price and those of the seller to sell at the highest price conflict with each other. Don’t rely on the Title Attorney; he is present to represent the interests of the Title Company that is insuring the Title to your home — not your home!
There are sublties and nuances in the real estate transaction that perhaps only a good real estate attorney knows. Don’t be foolish. Make sure that your rights are protected. Once the closing occurs, those rights may not survive the closing!
Although all attorneys are able to handle real estate sales, you will serve yourself well if you get one who specializes in them. As you become more experienced in the home buying and selling process, you’ll see that there is a rhythm to the transaction and someone who is familiar with it can often successfully negotiate some very rocky terrain.
My advice is that you don’t do it yourself. If you think the cost of hiring an attorney to protect your rights before you own the house is expensive, imagine what it will cost to hire one to fight for you afterwards.