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Did you know when you enter an open house, whether it is a pre-owned property or a model home in a new home area, and you register by signing a quest book or revealing your name, you may become a protected client of the registering agent and MAY NOT be able to seek your own advocate. Frightening isn't it.
Open houses are held by SELLER'S agents. A seller's agent LEGALLY represents the seller. In the case of new homes the agent or agents hosting the open houses may represent the developer as well as the builder of the model where the open house is held. If you register or reveal your name you may have effectively waived your right to representation to purchase any home in the subject area whether it is built or not. Most new home areas have a sign posted in the entrance that says, "We represent the SELLER."
How do you protect yourself? First and foremost seek a buyer's advocate to represent your interests and not the sellers. In most cases, the hiring of a buyers agent does NOT cost you anything and in fact may save you thousands of dollars.
Every property listed with a realtor has a brokerage fee or commission included in the price. What many buyers fail to recognize is if they enter a property that is open and seek no representation and ultimately purchase that property, all of the brokerage fee is paid to the agent that represents the SELLER. If you must attend open houses, the best way to protect yourself is to inform the agent hosting the open house that you have a buyer's advocate. This is often a relief to the host agent because the agent no longer is liable for the discovery process of the buyer's agent.
I am often asked, "What about for sale by owners (unrepresented sellers) and builders we contact directly?" For sale by owners (unrepresented sellers) have two objectives. The first one is to sell the property and the second is to save the commission. I inform for sale by owners (unrepresented sellers) I am working as a buyer's agent and ask if they are willing to compensate RE/MAX Best if you buy their house. Most of the time the for sale by owners (unrepresented sellers) are relieved not to have to "deal" directly with the buyer. You should be aware for sale by owner (unrepresented sellers) are not obligated to abide by any code of ethics nor must they disclose anything detrimental to their position. Would you rather buy from a for sale by owner (unrepresented seller) with no representation and risk paying too much for the property or have representation and have the seller pay your representative? The answer is clear.
In Kansas City most builders build in controlled subdivisions. The areas are controlled because all lots within the a given area are controlled by a developer who has a contractual agreement with a marketing agent (usually a real estate firm). An area is also controlled because the developer restricts who may build in the area. Ordinarily a developer will not sell a building lot to an individual unless the individual is an approved builder. Most new home marketing agreements include language which states no matter who buys any lot within the area, the marketing firm will be paid a commission on the lot price plus the price of the home constructed on the lot. In other words, you may go directly to a builder yet there is still a full commission included in the purchase price of your new home and the lot. By working directly with a for sale by owner (unrepresented sellers) or a builder you pay for representation which you do not receive.
Whether you’re thinking about buying or selling or merely seeking information, rely on me to provide accurate up to date information about the marketplace today.
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