Top Five Legal Tips for Residential Real Estate Buyer Agents

April 2010

Nash Law Firm, PLLC
By:  Stephen J. Nash
nash@nash-law.com

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Buyers expectations have changed a great deal in the last couple of years. There is now fear associated with real estate purchases. Buyers are being bombarded with real estate horror stories in the newspapers and on the television and most likely know people who are in foreclosure or who are barely hanging on. When buyers purchase today they are faced with a number of situations that they have not faced before that does, or should, concern them. They most likely have never bought a house in foreclosure, a house in an auction or a bank-owned property. Each involves a different process and different risks. Because there is greater fear and the purchases involve risks and procedures that buyers are not familiar with, buyers need and want protection. If they don’t get that protection they will not hesitate to blame their own real estate agent. Buyers expectations have changed a great deal in the last couple of years. 

1. Look at the transaction through the eyes of the buyer, not the seller. Sometimes the best thing you can do for a buyer is to keep them out of a bad deal. If you do this, the buyer clearly knows that you are looking out for his/her interest.

2. Discuss some of the issues at your initial meeting that you know will come up during the buying process so that when these issues come up the buyer is prepared. Many times the buyer feels blind-sided.  The issue comes up and they need to decide without the time necessary to really feel comfortable with their decision.

3. Make sure you understand the type of property that your buyer is looking for. For example, if your buyer is looking to purchase a rental property are you familiar with this type of purchase? Do you know what to look out for or how to draft the purchase agreement to best protect the buyer? If you want to represent a certain type of buyer, educate yourself so that you can best represent their needs.

4. Discuss with your client what his/her goals are, what his/her risk tolerance is and what his/her expectations for you are. Can you help achieve his/her goal? Are they willing and prepared to take the risks involved with their particular type of purchase? Are their expectations as to what you can do for them reasonable? If the answer is no to any of these questions you have to seriously question whether this is a relationship that you really want to be in.

5. What is your role at closing? Why are you there? Do you review the title commitment, the closing documents or the HUD statement? What does your client think your role is at the closing.  If the buyer thinks you are at the closing to protect them in a way that you are not, they surely will blame you if something goes wrong. Discuss with them what your role is at each stage of the transaction.

The more that you can do to protect your buyer, the more value you will have in the buyer’s eyes. With so many complications associated with buying today, buyers need someone to help them through the process. The more complicated purchases get and the more risk involved in these transactions, the more knowledge real estate agents will have to acquire in order to properly represent the buyer. This will result in less and less real estate agents who can properly represent buyers because of their unwillingness to get the needed education and less competition for you.

NOTICE The foregoing is not intended to constitute legal advice for any specific circumstance, but is intended to reflect broadly applicable principles, under Minnesota law, relevant to a typical situation. Each set of facts and each contract is, or can be unique; the unique facts and specific language of the contract may require a different legal analysis and may result in a different outcome. Before proceeding in reliance upon this or any other general description of law, consult with an attorney competent in the field of practice relevant to your situation. Copyright 2011 Nash Law Firm