Jon Boyd Ann Arbor Real Estate Buyer's Agent

This question comes up often. I've never found a consumer who understood it and the vast majority of real estate agents and brokers I've spoken to don't really understand it either.

After years of teaching it in home buyer classes I've found that diagrams make it much easier to understand.

The other thing to understand is that a consumer's legal relationship is always with the broker or brokerage, never with the salesperson directly. In fact, it is illegal for a salesperson to take compensation directly from a consumer. The relationship is with the brokerage and any compensation must be paid to the brokerage.

Here is a diagram of Buyer Agency:

Note the buyer is blue, and everybody in the real estate office is also blue. They all represent the buyers and have requirements of loyalty and full disclosure to the buyers.

Here is Designated Buyer Agency:

Note how most of the people in the office are no longer agents of the buyers? In fact they may know something that would be very important to the buyer to learn, but they have no obligation to tell the buyer since they are not agents of the buyer.

But note that this is only one of five different forms that designated agency can take. The other four forms are often much worse for the buyer than this one.

But, how about a real life example:

A home seller had their home listed with a brokerage and had a purchase contract but after the home inspection showed major problems with the construction that buyer backed out.

That company lost the listing and a different company listed it. The seller didn't tell the new listing agent about the defects. Now a different agent from the first company brought in a buyer. Should the buyer be told about this major defect? Yes if the company is a buyer's agent, no if it is a designated agency.

The second buyer's inspection was not thorough and they missed these defects. These defects cost $50,000+ to repair, the buyer had to move out of the home and it eventually went into foreclosure.

In court the first real estate company, where some agents knew about the major defects when they helped the buyer buy the home, was not found liable. The buyer signed a Designated Buyer Agency contract with them when they started looking and it protected the brokerage.

If that company had been a Buyer Agency and they neglected to tell the buyer about these defects, the outcome would probably have been much different.

Designated Buyer Agency is complicated and not at all intuitive. Because of that the law required Designated Buyer Agency agreements to be in writing.

Buyer Agency is simple and intuitive. Buyer Agency contracts are not required to be in writing.

More on the different forms of designated buyer agency in the next post...

It is funny what you learn and when you learn it in the real estate business. As an exclusive buyer agent I've been been in thousands of homes with new or updated windows. In fact window discussions are very common for us because it does have a significant impact on the quality of living in a home. I know a lot about windows. But I learned a bit more today.

As it turns out my wife and I are looking at doing some remodelling and we met a window contractor at our house today. I've worked with a lot of contractors over the years and probably met with a dozen or so just in the last month for one thing or another.

Today I had the pleasure of meeting Connie Moore of Wallside Windows. Wallside was referrred to us by one of my past home buyer clients who had them do some work ten years ago.

Now understand that these are not luxury windows. I love the Pella product with the built-in blinds. I like a lot of the premium windows that I see when I show homes. These are not premium windows. Wallside focuses on vinyl replacement windows. These are basic, energy efficient, windows which are guaranteed for 35 years. (And the company is actually old enough that the guarantee means something.)

In any case Connie was on time, very professional, very knowledgeable about her product and how her people would install the product. The basic pricing was a little funny. (It sounds like they always sell them at 50% off.) But the net result is that we learned a lot and we may very well use some of the Wallside Window product.

One of the benefits to using Wallside is that the company covers both the window and the installation. Using a carpenter to frame and install the window with a regular window company leaves you with two distinctly different guarantees.

So, interesting experience. If you are considering replacement windows I think it would be worthwhile speaking to Connie. The Wallside number is 800-521-7800.

If we end up choosing them I'll report on the experience.

If you are looking to buy a home and you want a real estate company that will always be on your side, in your corner, and looking out for you, call us.

734-662-6240

Jon Boyd Broker/Manager
The Home Buyer's Agent of Ann Arbor, Inc.
1908 W. Stadium Blvd.
Ann Arbor, MI 48103

We serve the Ann Arbor - Brighton - Plymouth - Novi - Canton - Ypsilanti areas in Southeastern Michigan.

And we can guarantee that you will never be stuck with designated agency, dual agency, or non-agency.

I received another call yesterday from a frustrated home buyer.

This young man had been working with a real estate agent from one of the big five firms here and he really felt he wasn't getting his questions answered. He wasn't even sure he knew what questions he should be asking.

He did make sure to tell me he didn't have any written agreement with her so he wanted me to know he didn't have an obligation. I found that interesting because he told me she was being her "buyer agent."

Here is the thing:

The big offices in our market don't allow buyer agency. They only offer dual/designated agency services.

And they can't be designated buyer agents without a written contract.

So he was told she was "on her side" but she wasn't. In fact she was being a seller's agent or a dual agent every step of the way.

Did the agent even know the difference?

It doesn't matter, the broker should know the difference. And some brokerages in our market seem to routinely ignore the legal requirements to the peril of the consumer. And our local association and our state association seem to even encourage this behavior.

That is unfortunate, but at least in this one case the buyer will now be helped by the Ann Arbor real estate company who will treat them honestly and advocate in their best interests.

If you are looking to buy a home and you want a real estate company that will always be on your side, in your corner, and looking out for you, call us.

734-662-6240

Jon Boyd Broker/Manager
The Home Buyer's Agent of Ann Arbor, Inc.
1908 W. Stadium Blvd.
Ann Arbor, MI 48103

We serve the Ann Arbor - Brighton - Plymouth - Novi - Canton - Ypsilanti areas in Southeastern Michigan.

And we can guarantee that you will never be stuck with designated agency, dual agency, or non-agency.

I just read an interesting post here on Active Rain on the private "Member Only" side. It was about a real estate agent bringing in an offer from a buyer and trying to get the listing agent to respond in a professional way.

This is certainly a common problem in many markets, fortunately here in Ann Arbor it is the rare exception.

But in that post, the agent talks about trying to get the buyer to make a higher first offer. And out of about 50 responses none of the regular real estate agents even questions that effort.

Now it is important to understand that every negotiation and every transation is different. So there may be times when it is appropriate for a buyer's agent to suggest a buyer make a higher initial offer. But, in today's market that situation is not the norm.

If you are a buyer and you have NEGOTIATING POWER in the form of OTHER OPTIONS, then your best strategy may be totally different than what all those regular real estate agents naturally want you to do.

I'm not going to reveal the details here because some other real estate agents in our market sometimes read my posts, but, DON'T EXPECT A TRADITIONAL REALTOR TO BE EFFECTIVE IN REPRESENTING YOUR INTERESTS. Most of them still FOCUS ON SELLING YOU A HOME!

If you are looking to buy a home and you want a real estate company that will always be on your side, in your corner, and looking out for you, call us.

734-662-6240

Jon Boyd Broker/Manager
The Home Buyer's Agent of Ann Arbor, Inc.
1908 W. Stadium Blvd.
Ann Arbor, MI 48103

We serve the Ann Arbor - Brighton - Plymouth - Novi - Canton - Ypsilanti areas in Southeastern Michigan.

And we can guarantee that you will never be stuck with designated agency, dual agency, or non-agency.

It is funny how much we depend on technology in the Ann Arbor real estate business these days.

About an hour ago I started having problems with our MLXchange system. (That is the database of property used by the Ann Arbor Area Board of REALTORS.)

Today the MLXchange system was crashing a lot when I tried to look at some detailed property listings. To the point is was almost unusable. So I decided to take a break and catch up on some email.

Just now I received an automated email of a price reduction that sounded too good to be true. It is a West Ann Arbor home that would be priced around $245,000 and the price noted was $125,000. So, I pulled up the complete data and sure enough it looked like there was a big price reduction.

Well the listing agent is someone I work with a lot and she is normally very professional. As I looked at it closer something didn't make sense so I decided to call her and see if it was just a typo she would want to fix.

It turns out she knows nothing about a price reduction! It would appear that the MLXchange system reduced the price without human intervention!

Either that, or, it has let some quirk in the data slip by where somebody else's reduction was made on this property.

Very strange day for real estate!

Update: The listing is changed back to the original $255,000 price. I'll try to get an explanation from her the next time we talk.

As always if you are interested in finding the best home for your needs and buying it at the best price, give us a call. That is all we do and we do it very well!

Jon Boyd
Broker/Manager
The Home Buyer's Agent of Ann Arbor
Ann Arbor real estate's top buyer's brokerage