Real Estate Representation

Whatever your association to the word "entourage" – whether your mind goes directly to Mark Wahlberg and his hit HBO series with the same name, or Mike Tyson, or any number of celebrities and musical artists, or even the version of Microsoft Outlook for Mac, with the exception of the software – it all boils down to a group of people (ideally, good, solid, honest and strong) who, at the end of the day, through thick and thin, have a person's back. And when I think about it, the software does the same thing.

In real estate, you – as the buyer or the seller – are the one deserving the entourage. Your heart, soul, home and money need to be protected. In order to be protected, it is vital to hire an entourage whom you trust. This is not the time to cut corners and save money by hiring your cousin’s best friend who sold one house two years ago when he was unemployed and helping a friend. As in anything, you get what you pay for.

You need not be fancy, talented or wealthy to have an entourage when embarking in a real estate transaction. You just need to be smart. Think about the big picture.

In your entourage, I believe it is essential to have:

• Licensed real estate agent/Realtor: The term Realtor is sometimes used interchangeably, but it is important to note that not every real estate agent is a Realtor. As members of the National Association of Realtors, Realtors say they subscribe to a code of ethics. To summarize, this is Article 1 of the Code of Ethics and Standards of Practice of the National Association of Realtors: “When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors pledge themselves to protect and promote the interests of their client. This  obligation to the client is primary, but it does not relieve Realtors of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors remain obligated to treat all parties honestly.” In essence, the role of your Realtor is to protect you and your interests throughout the entire transaction – from the moment you are thinking about buying or selling, to the day you move.  

Do other real estate agents who aren't Realtors also abide by strong ethical codes? Certainly. Stay tuned for next week’s column about the value and importance of buyer and seller representation.

Your real estate agent is an excellent source for referrals. It is important that people know that professional real estate agents are asked to adhere to the Real Estate Settlement Procedures Act (RESPA) 12 USC Section 2607 Prohibition Against Kickbacks and Unearned Fees. Essentially, it says that if an agent gives you names of mortgage brokers, home inspectors, contractors, etc., it is because the agent believes they will provide good service and a professional experience. Most important, it is because agents don't want there to be issues at the closing. Keep in mind that most real estate professionals work on the basis of reputation and referrals.

• Mortgage broker/lender: Unless you are paying cash, without a mortgage broker/lender, you don’t have a transaction. This is not the time to do someone a favor or experiment online with mortgage calculators that ask for your Social Security number, promising a much lower rate. Unless you have spoken with an actual person with the lending institution, I never believe that it is a good idea to share your financial information on the World Wide Web. There are way too many good, honest local mortgage brokers who spend tireless hours ensuring that you have a loan commitment when you are supposed to and that the money is all set for the day of your closing, at the rate promised to you. No need to go elsewhere.  Also, there are banks that do a great job, and then there are banks with a reputation for creating a nightmare out of a dreamy transaction. Again, ask for a referral from someone you trust – preferably someone who has been directly involved in a real estate transaction during the past six months.

• Home inspector: Borrowed from an earlier column of mine, home inspections are conducted for the purpose of professionally evaluating the structural elements of the home and educating buyers about the condition of the home. Some of what is discussed relates to maintenance of the house and how to continue to maintain the house so that everything works efficiently. It is always a good idea to ask your real estate agent for a recommendation, since agents usually have experienced more home inspections than a buyer has. Like every business, there are good, reputable home inspectors, who do their job; they will tell you if they find trouble. And then there are some whose goal is to “kill” the first inspection so that you will feel so appreciative that they “saved you” from a house with issues, that of course you will hire them to conduct the next. There are the “showoffs” (there to put on a show) and then those who really have no clue. Remember, almost every repair item has a remedy. It is often a question of cost and who is going to pay for the repair. Home inspectors do need to be licensed to practice in Massachusetts, and many are also members of the American Society of Home Inspectors.

• Real estate attorney: The original negotiations between buyer and seller were smooth, friendly, even a bit lovey. You want to sell to them and they can’t wait to sell to you. But before you exchange email addresses and invite them to dinner, the purchase and sale agreement is to be signed. That agreement is often written by and negotiated between lawyers: your attorney and the attorney for the other party. If either of the lawyers do not act in a manner consistent with you and the tone of the transaction, it will put the proverbial sour taste in everyone’s mouth. Your attorney does not have to be a stubborn stand-on-top-of-the-soapbox-winner-of-all-pissing-contests type of attorney to ensure that you are signing a document that protects your interest. If, for example,  the buyer realized after the fact that he or she really would like the swingset that they had originally agreed to exclude and the seller found a house in which a swingset was included, what is the big deal in telling the buyer they can keep it? Nothing. But, if you have an attorney whose motive is more about “let’s see how much we can get from them” rather than “the buyer and seller  are going to be living in the same town, with the same age kids and I don’t need the swingset,” you will have a problem. It is important that you absolutely trust your attorney, and to not assume, just because their website includes the words “real estate,” that he or she is any good at the job. Too much time and energy is spent clarifying issues created more by attorneys than the original parties involved. There are plenty of good, reputable real estate attorneys from which to choose – it is always worth asking your real estate agent for a referral. And before you start commenting and emailing me, know that I am proud to be the  daughter of a real estate attorney. It is because of the honesty and integrity of my late father that I hold such a high level of respect for, and likely, have higher expectations of, real estate attorneys.

And with that, I hope that when you do consider buying or selling one of the largest and most expensive tangible assets you will own, you consider the importance of putting together an entourage comprised of people who are more interested in your successful transaction than their own resume.