Find out about Real Estate on the Monterey Peninsula

Karen flew into town from New York to look at homes on the Peninsula. She did some research and found me on the internet through Trulia. It’s always exciting for me to meet people with dreams of relocating to paradise. Karen on Youtube

Why is that? Because they are paid by the seller and cost you nothing! That’s right, it’s like getting free legal counsel. The best part? When you have a broker-buyer’s agreement contract, they are obligated by law to protect your financial interests.

In California, it’s legal in real estate for an agent to practice Dual Agency. That means that someone who lists a property for sale can also assist a buyer to purchase that property. Many buyers assume that’s the best way to purchase, thinking they will get a better deal by going directly to the person selling the property.

Here’s the rub. With whom does that agent have a contract with? The seller. Who is his client? The seller. He can assist the buyer, but he cannot represent  the buyer. In other words, the seller is his client and the buyer is a customer. Big difference. He is obligated by contract to get the most for the seller.

Many buyers assume that if they use an agent other then the listing agent, they are being "represented" in a client relationship. Wrong! Without an agency agreement, the buyer is considered to be a customer! According to California real estate law, the agent is assisting the buyer and is technically called a sub-agent for the seller. Yes, that’s right. His duty is to help the seller’s agent sell the property, not help the buyer get the best deal.

So what should a buyer do to make sure he is represented properly? Find a buyer’s agent and put that agent under contract with a Buyer-Broker Agreement. Explain what you expect that agent to do and hold them accountable to protect your fiduciary interests. Now you are in a client relationship by contract, not just implied.

You should ask the agent how they will be compensated if you should buy a property. They will point out in the contract that they will be compensated by the selling agent through the Multiple Listing Service. Unless you plan on purchasing a "For-Sale-By-Owner", it which case the agent will likely try to negotiate a fair commission from the seller. If the seller refuses, the buyer may have to compensate the agent in that instance. That’s ok, because now the shoe is on the other foot. In this instance, the buyer is the client and the seller is the customer. The agent will be working for the buyer’s best interest. He will likely have to do much of the paperwork for the seller and make sure the sale is done legally and properly according to real estate law. Because he is under contract to the buyer, he will be obligated to make sure the transaction favors the buyer and not the other way around.

"How is the land, is it fat or lean? Are there trees in it or not? Make an effort then to get some of the fruit of the land." Now the time was the time of the first ripe grapes. Numbers 13:20

This passage from scripture captures the essence of prospective. Moses had sent the spies out to the promised land and he was interested in their report. Only two had a positive report, Caleb and Joshua. During this time of great financial upheaval, I ask myself  "how is the land, is it fat or lean?"

My response to this question is going to set my course to either a successful and profitable real estate career, or one of failure and  disillusionment. Fear is rampant in the marketplace. Buyers are afraid to get involved in a purchase and sellers are worried they can’t sell. Throw in lenders who are overly cautious, and you have the perfect recipe for inertia.

How is this inertia overcome? By education and understanding. Buyers need to be shown why it’s a good time to buy. Sellers need to be shown how they can have a successful outcome to their sale. Lenders need to be shown the path to profitability.

All of this will take courage, faith and conviction. Those start with me, the real estate agent. If I’m missing just one of those three, I can’t possibly expect a buyer, seller or lender to trust my judgment or advice. So I must constantly ask "where is the opportunity?" People will trust me if I am courageous, faithful and act out of conviction. I believe I can change their lives in a positive way, but they need to see it from my prospective.

In my market, I can’t see lower interest rates or much lower home prices. It’s the best time I’ve ever seen to get into a real estate transaction, but will the buyer and seller have the courage to do it? Will I have the conviction to educate them on it? Will all of us have the faith to move forward and and experience success?