Understanding Agency (Who Represents Whom in a Real Estate Transaction) it’s Important, Overlooked and Misunderstood


Would you hire your spouse’s Attorney in a divorce battle, or if someone brought a law suit against you would you hire the opposing side’s attorney, hell no!  Then why do Home Buyers and Sellers hire Real Estate Firms without understanding the concept of “Agency?” (Who Represents Whom In Real Estate Transactions)

Buying and Selling properties are usually the largest and most important financial decisions most of us make during our life times.  Buyers and sellers can be at a distinct disadvantage not understanding the concept “Agency” during a Real Estate transaction.  For most of us, we don’t really care about technicalities as long as we accomplish the end goal and the transaction goes relatively well.  More often than not, Agency is presented quickly and glossed over because the technicalities of Agency are somewhat complicated, scary, difficult to understand and also difficult to explain.  If you read John Murphy’s article, you’ll find out according to Minnesota State Law when Agency should first be presented.  Based on the law, it is enough to scare anyone away. However, Agency is the essence of why a Buyer or Seller hire a Real Estate firm; despite the fact the general concensous is that Real Estate Firms/Agents are hired to unlock doors, place signs in yards and place properties in Multiple Listing Service.   As with any concept, The Devil is in the Details; understanding the details of Agency can help you as a buyer or seller gain an advantage during a Real Estate transaction knowing what to disclose or not disclose and to whom.

Just this morning, I was on the phone with a broker/agent regarding a mutual client.  During our conversation, she mentioned that the sellers agent had given away just about every detail of the sellers motivations for selling.  Was the selling agent representing their client’s best interest disclosing the sellers motivations?  That is a question best directed at the seller.  Perhaps, the seller had given their permission to expose their motivations as part of their selling strategy, but my guess that is not the case.  If it was, it may have been a brilliant strategy if it leads to a signed contract.

I highly encourage you to read the article below regarding Agency:

John Murphy of John Murphy Real Estate Reports has done a fantastic job of presenting Agency along with real life examples. The Devil is in the Details with regard to Agency, and you owe to yourself to know the details prior to a Real Estate transaction.

The New Agency Laws in Real Estate – Understanding Dual Agency as a Home Buyer or Home Seller

For further information, I can be found at www.iLoanJoe.com 
Joseph J. (Joe) Harvey – Senior Mortgage Advisor – iLoan Home Mortgage – Saint Paul, Minnesota – NMLS 242632

About Joe Harvey MortgageJoe's Blog

In seventeen year as a Mortgage Professional many things have changed. However, many have remained the same. Today’s exhaustive documentation and underwriting requirements (which are only short of a full cavity search) required of loan applicants since the “Mortgage Meltdown” & Bursting of “The Housing Bubble” are essentially the same requirements when I began my mortgage career in 1995. Overtime technology has improved the speed of mortgage application and approval process (in 1995 it took up to a week to obtain a credit report) , but all in all the loan application/approval process has returned to the basic tenants of making sound lending decisions to applicants that actually can repay their loans. What hasn’t changed over the years, most persons or families aspire to own a home to call their own, make changes as they see fit, overtime gain equity, protect their investment and one day hopefully pay-off their loan before reaching retirement. What I can offer as your Mortgage Professional is my experience, honesty, depth of knowledge of loan programs based on individual circumstances whether Purchasing or Refinancing. Licensed in Minnesota and Wisconsin. Planning to purchase a home and have experienced a financial hardship in the past? First, it is not your fault. Second, I can help if you are willing to follow a plan, and be an active participant in your financial recovery. There is no magic pill or wand to wave; it will take some time (generally three months to a year), but time will pass regardless of action or inaction.

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