Agents: Single, Double ,and...Transaction?

As I mentioned earlier this week in a post about single agency, relationships between clients and real estate agents are not as cut and dry as they seem.

Dual agency is where things can get a little more complicated. Dual agents work with people on both sides of a real estate transaction.

As you know from seeing for sale signs as you are out and about, real estate agents are affiliated with real estate brokers. It is possible for you to contract with an agent who works for the same broker as the seller’s agent. So although the buyer and seller are not represented by the same person, it is considered dual agency because both parties are under contract with the same broker.

Still another example of dual agency is when one agent represents the buyer and the seller. In this scenario, the agent is not supposed to share confidential information with either party. Representing both sides means that the agent cannot provide either the buyer or the seller with the kind of information they’d provide if they were acting as a single agent.

In contrast to the single and dual agent, there is another category: transaction agent. Transaction agents do not negotiate on either party’s behalf. They are tasked with seeing the transaction through to completion, but making sure that the purchase contract is fulfilled and producing paperwork.

Single Agency

You may think you know what a real estate agent does: represent someone in a real estate transaction. It’s simple, right? Yes and no. All agents (and all agent-client relationships) are not created equal.

A buyer’s agent represents a buyer, while a seller’s agent represents a seller. It is customary to sign an agreement with your agent to make the client-agent relationship official. If you are looking to buy a house, you would sign a buyer’s broker agreement with buyer’s agents and a listing agreement with a seller’s agent.

There are also some agents that only work as buyer’s agents, so they do not list houses or help people sell property.

When an agent is representing you and you alone in a transaction this is called single agency. In this relationship, an agent is responsible for informing you of material facts. It is also their duty to safeguard confidential information and not reveal it to other people involved in the transaction. As a client, you are placing your trust in this person to help you get the best deal possible.

Consider this as you interview agents. For example, if you meet an agent who primarily works as a buyer’s or seller’s agent, ask them why they chose their area of concentration. Learning something about an agent's motivation will help you as you make your decision about who will represent you.

Get the LED out this Christmas

LED lights are an energy efficient alternative to incandescent bulbs. LED stands for light emitting diodes. A LED light acts as a semiconductor, turning electricity into light. Although this technology has been around for a while, LED lights are now starting to gain momentum with consumers. People are looking for ways to keep up a certain lifestyle and also conserve energy. If you enjoy decorating with lights, but you aren’t sure that traditional Christmas lights are they way to go, consider LED lighting.

Unlike incandescent bulbs that burn out, LED lights grow dim over time. Not that you really need to worry too much about it— some of these lights can last 100,000 hours and beyond.

LED lights give off less heat than typical lights, making them a safer choice when it comes to decorating your home. If you put lights on trees and shrubs that surround your home, you don’t want to risk having the lights overheat as they are in contact with plant life.

With that being said, you should know that LED lights are very sensitive to heat. If for some reason a LED light is exposed to excessive heat, it will not perform as well or last as long as it would under more moderate temperatures.

One thing that keeps many people from switching top LED light is the cost. It is true that LED lights cost more, but they pay for themselves after a season or two.

Reasons to Sell Before Buying

Earlier in the week, we looked at a few reasons why someone would decide to buy first, rather than sell first. Now let’s consider reasons to sell before buying.

Negotiation
Selling first gives you a better position in negotiations. Selling first gives you time to consider offers with a level head because you won’t feel pressured. You won’t feel as if you have to take a less than attractive offer just to get your home sold quickly. When you sell your home before buying the next, you are likely to get a higher sales price than if you do it the other way around.

Rent Before Owning
Buyers who aren’t in a hurry may allow you to rent your home from them while you find your next dwelling.
Even if you cannot buy before owning, you can get storage for your belongings and arrange to rent for a short time.

Money in your pocket
If you sell your home first, you come to the table knowing that you have money to spend when you negotiate to buy your next house. You could sell your home for more that you originally imagined and this may allow you to buy a house that you may not have considered.

Which Comes First: Buying or Selling?

If you want to sell your home and move to another you have to consider whether it is better to buy first or sell first. There are not easy answers to this question. It is in your best interest to evaluate your situation and the market carefully before choosing one option or the other. Here are two questions to consider:

What is the market like?
In a seller’s market when everyone is scrambling to pounce on homes and properties go quickly, you can feel safe in buying first. But be aware that because sellers have the upper hand, they are less willing to accept offers with a sale-contingent clause. You may still own your own home along with the new one until you can sell yours. Of course if properties are going that quickly, yours could be snapped up as well.

Is it your dream home?
If you see something that you know fits you and your lifestyle perfectly, it will be hard to pass it up. There are times when you really do have to just go for it when you see a once-in-a-lifetime opportunity. If you do this, go into it with both eyes open, aware of the financial obligation you’ll have with owning two homes if your home doesn’t sell right away.

Calculate Commuting Costs into the Homebuying Equation

When searching for your dream home, you may spend a lot of time considering the community, schools, and nearby amenities available, but what about your commute? The costs of commuting are also an important consideration. You have to do more than just think about how moving from one area to another will put you on a certain highway. Take the time to actually run a few numbers so you’ll know that you are making a smart move.

Ask yourself:
How many miles is my commute (round trip) now?
How much will it be if I move to this or that area?
How many miles per gallon does my car get?


If you use public transportation, ask yourself:
How much will I pay (round trip) to take public transportation?
Each day? Each month?
Will I have to pay to park at a metro station?

You also have to consider time. No matter how well you think you can estimate traffic, the roadways can throw you for a loop. The more time you spend in transit means you have less time to spend enjoying your beautiful home. Some people can handle a long commute, knowing that they have the weekend to relax at home. Other people prefer to find ways to spend as little time traveling as possible.

You may choose a home that allows you to cut a huge chunk of time from your commute. That is an adjustment as well, albeit a welcome one.

Borrowing Against the Equity in Your Home

When you opt for a home equity loan or home equity line of credit you borrow money using your house as collateral. These kinds of loans often have lower interest rates than other loans because banks consider them to be low risk. For this reason, home equity loans typically have low interest rates. Homeowners will work not to put their home in jeopardy and if for some reason they cannot pay, the bank can collect the collateral (your house).

A home equity loan allows you to borrow a large sum of money, the kind of money you wouldn’t be able to charge on a credit card. Homeowners can use this money to buy second homes, renovate their current home, pay college tuition, or consolidate debt.

If you are thinking about a home equity loan, remember that it is not free. Before you can borrow the money you want, you will go through something that is similar to the home buying process. To get a home equity loan you may incur some of the following costs:

1) Appraisal fee
Just as when you originally bought the house, you will have to pay to have someone assess its value before you can get a home equity loan.

2) Application fee
Every lender does not have a fee for applying, but some do.

3) Charges for points
A point is one percent of the amount you want to borrow, and points are not the same as interest. You may have to pay points when you close your loan.

4) Closing costs
This include attorney fees, title search, and taxes.

Full Disclosure

As a seller, it is your responsibility to inform a buyer of your home’s problems or defects. Concealing such matters is grounds for legal action and you don’t want that. If you sell your house “as-is” thinking that this means you don’t have to tell the buyer anything, you are mistaken. If you know about a problem and attempt to hide it from the buyer, you open yourself up for a lawsuit, even in an “as-is” sale.

Sellers are obligated to disclose “material facts”, which is information that could affect on a buyer’s decision to purchase your home. More often than not, it is information that is likely to have a negative effect. The fact that you once spilled red wine on the carpet is not a material fact. The fact that your carpet hides water stains from a leak, is. Problems like Issues with plumbing or wiring or potential safety hazards should be disclosed.

No matter how friendly you are with a buyer or what you have told them in conversation, you need to be certain that you also put it in writing. This way there can be no doubt and you do not leave the matter up to another person’s interpretation or memory.

What exactly should and should not be disclosed can vary by region, so you should ask a reputable realtor about how the law works in your area.

You can always e-mail me at john.day@longandfoster.com with questions about real estate matters.

Spacious Home in Calvert County

This great home in the Bayview Hills subdivision proves that Bayview Hills really lives up to its name. You can see the bay and a large tidal pond from the back of the house.

There is a level yard with a large, multi-level deck—perfect for outdoor gatherings. The house itself is open, bright, and full of light. Just imagine yourself relaxing in or out of doors with the sunshine filtering in as you take in the view. This time of year, you will enjoy using the fireplace and when it is warm you can grill outside.

This very open split level plan house is one of a kind. There are no walls between the entry and upper level and that give the home a very open flow.

There are three bedrooms and three full bathrooms in the house that is not quite ten years old. The basement is partially finished and there is a separate laundry room.

Take a virtual tour and see for yourself!

Another great feature of this house is the unfinished room next to the basement. This is wonderful for someone who wants to get a little creative with their home, but doesn’t want to start from scratch. With three finished bedrooms, you can make this one into another bedroom that has your unique flair, or you can turn it into an office or playroom. The sky’s the limit and you’ll be free to experiment with this room because you have plenty to living space elsewhere in the house.

Click on the title of this post for more information on this house and other listings in Maryland.

Short Sale

A short sale is one way to extricate yourself from a difficult situation if you find you can no longer afford your home. If you are considering a short sale, keep in mind that it is not a simple process, so proceed with caution. Before you attempt to take this step, seek legal and financial advice.

In a short sale, a lender agrees to take less than the full price of a property. This is also known as a “shorted sale”.

For example, if you still owe $485,00 on your home and are able to sell it for $475,000, with a short sale your lender will take this reduced price as payment in full.

Every lender will not accept a short sale. If you need to take this measure, you shouldn’t just talk to the first person that answers the phone. Many lenders have specific persons who handle short sales and these are the people you need to speak with to be sure your case is handled properly.

You or your agent will have to compose a detailed letter to tell the lender exactly why you are requesting a short sale. The letter should not be vague; rather it should outline your situation, as well as discuss the value of your home, the price you want the lender to accept, the commission the agents has agreed to take, and expected closing costs.

Also, ask your lender exactly what you owe and verify that the number is correct. If you have missed payments, there will be late fees to pay, so do not leave these amounts out of the equation when you do your own math.

Clean Sweep

No matter how often you do or don’t use your chimney, you should have it cleaned once a year, at a minimum. If you use it infrequently, you still need to have it cleaned because it is possible for animals to build nests in the flue. There could also be some kind of damage or other buildup that you are unaware of, so be sure that you don’t neglect your chimney, even if you rarely use it.

When you hire someone to clean your chimney, make sure that you hire someone who is knowledgeable. This person shouldn’t simply sweep out the fireplace. A thorough job includes a visit to the roof to check the flashing and the mortar. There is cleaning to be done on the top of the house as well as on the inside.

Some homeowners with woodburning fireplaces enjoy this feature, but notice there is an odor emanating from the hearth. Creosote deposits in the chimney have a noticeable smell. These deposits are part of what happens when wood is burnt. Getting the fireplace cleaned can help tame some of the odor. You can also purchase products to deodorize the chimney or try sprinkling baking soda in the fireplace.

Apply Knowledge When Requesting an Appraisal

You may have heard that Andrew Cuomo, New York’s Attorney General has filed a lawsuit against First American Corp., an appraisal company, saying that First American Corp. assigned inflated values to homes all over the country. These inflated home values led some people to pay too much for homes, while others borrowed a lot more than they normally would have to purchase overpriced homes.

The suit accuses First American of bowing to pressure from a lender when inflating the value of some homes. Although New York State is not suing the lender, the implication is that the higher appraisals allowed the lender to make loans in higher amounts and benefit from the increase in business.

So what methods do appraisers use to evaluate a property?

Appraisers gather information from a variety of sources and weigh each piece of data. Some of the information, such as county courthouse records and data from a local Multiple Listing Service, is formal, while some of it is informal. An appraiser may also use personal knowledge and speak with real estate professionals and homeowners in the area.

Ask your appraiser just how they come up with a value for your home. Depending on the service you request, an appraiser may enter the home or base their estimation on viewing the outside and consulting other source.

You are allowed more than one appraisal, so do not feel that you are locked into a figure if you have doubts about an appraiser’s work.

Show Your Home in the Best Light

There are so many ways to highlight your homes best features and set the stage for a sale.

One way is to use light to your best advantage. People may have different personalities and desires, but most will feel more at home in a place that has good lighting.

If your home has dark or heavy curtains, considers switching to a different window treatment. Choose curtains in neutral colors that let in light to ensure that potential buyers feel your home is inviting. Your windows shouldn’t be bare, but at the same time they shouldn’t make such a bold statement that buyers cannot see themselves living there.

You can also replace regular light bulbs with full spectrum light bulbs. These light bulbs mimic the effects of natural sunlight. In the fall and winter when there are fewer hours of daylight, buyers may be viewing your home at a time when natural sunlight is not streaming in to illuminate rooms. At this time of year, full spectrum light bulbs can make the inside of a room look like it is summer.

These bulbs vary in price, but the more expensive varieties not only mimic sunlight, there are also used by people who suffer from Seasonal Affective Disorder to improve mood. Imagine happy, cheerful prospective buyers touring your home and make sure your lighting leads to a sale!