General Principles Of Agency 8

Question 1

Responsibilities of Sellers Agent and Buyers Agent

Answer 1

Seller’s Agent: Be honest with the buyer but responsible to the seller.

Buyer’s Agent: Be fair with the seller but responsible to the buyer.

Question 2

Earnest Money Deposit

Answer 2

Seller’s Agent: Collect amount sufficient to protect the seller.

Buyer’s Agent: Suggest a substantial deposit indicating the sincerity of the offer; put money in an interest-bearing account if required by state law; suggest that forfeiture of earnest money be the sole remedy if buyer defaults

Question 3

Seller Financing

Answer 3

Seller’s Agent: Can discuss but should not encourage financing terms and contract provisions unfavorable to the seller;
No due-on-sale clause
No deficiency judgment (nonrecourse)
Unsecured note

Buyer’s Agent: Suggest terms in best interests of the buyer;
Low down payment
Deferred interest
Long maturity dates
No due-on-sale clause
Long grace period
Nonrecourse

Question 4

Property Condition

Answer 4

Seller’s Agent: Require the seller to fill out all disclosure forms.

Buyer’s Agent: Require that the seller signs property condition statement and confirm representation of the condition; require soil and termite inspections (if appropriate); look for negative features and use them to negotiate better pricing and terms

Question 5

Documents

Answer 5

Seller’s Agent: Give the buyer a copy of important documents;
Mortgage assumed
Declaration of restrictions
Title report
Condominium bylaws
House rules

Buyer’s Agent: Research and explain significant portions of important documents affecting the transaction;
Pre-payment penalties
Subordination
Right of first refusal
Refer buyers to expert advisers when appropriate

Question 6

Negotiation

Answer 6

Seller’s Agent: For seller’s best interests.

Buyer’s Agent: For buyer’s best interests.

Question 7

Showing

Answer 7

Seller’s Agent: Ensure property is ready for showings:
Place property in MLS to expose it to the most possible buyers
Pick best times to show properties
Emphasize attributes and amenities

Buyer’s Agent: Search for best properties for the buyer to inspect, widening marketplace to:
For Sale by Owner (FSBO)
Lender-owned properties (REO)
Probate sales
Unlisted properties