The trite idiom, “what you don’t know won’t hurt you,” is not the catch phrase you want your real estate agent to embrace. However, home buyers and sellers are often confronted with issues that often fall into this category, but should not prevent you from asking for more information or consulting with your attorney. Some common top red flag situations include guidance regarding contracts and addenda, having an agent insist you hire their vendor, and receiving an offer to purchase with conflicting information.
Although it is recommended that a home buyer and seller consult with their attorney to explain a listing or sales contract as well as addenda, the reality is consumers often rely on their agent’s understanding and explanation of the forms they sign. An example of this is the first time Maryland home buyer addendum. Besides the fact that a first time Maryland home buyers have their portion of the state transfer tax paid by the seller, the Annotated Code of Maryland (14-104 (c) – Real Property) states that the recordation and local transfer tax is to be paid by the seller unless both parties agree to a different arrangement. Even though section 14-104 (c) is clearly stated on the first time Maryland homebuyer addendum, I am increasingly hearing how some first time home buyers were not made aware of this opportunity. One home buyer recently told me they fired their agent because after reading the addendum to their agent, the agent told the buyer that transfer taxes are automatically split between buyer and seller regardless. Although it may have been true that first time Maryland home buyers often waived this opportunity during a seller’s market, it is increasingly being asserted in today’s buyer’s market.
Another red flag situation is when an agent insists a home buyer use a specific provider. For example, it is not uncommon for some buyer agents to compel their clients to hire a home inspector they use on a regular basis; the agent wants to ensure that the deal will not be jeopardized by an inspector pointing out too many concerns. I have heard home owners regretting having hired their agents’ home inspector without an interview or checking into their credentials, because of issues that turn up after closing. Additionally, some home inspectors will recount stories of how they have been pressured by buyer agents to not report items on the home inspection report so as not to “kill” the deal.
For home sellers, a red flag situation arises when they receive a purchase offer with inconsistent terms. Listing agents are often given offers that have inconsistent information, such as deposit checks amounts that conflict with the contract, or loan approval letters that are written for less than the purchase price. Sometimes, after digging a little deeper, is not uncommon to find out that the lender is not licensed to do business in Maryland, or the deposit check bounced. Without the proper information, the seller cannot make a solid decision.
Although you might think your real estate agent should be looking out for you best interest, intentionally or unintentionally- it is not always the case. Although, seemingly innocent or harmless situations can sometimes raise a red flag in your mind, most resolve without issue; however, it should not prevent you from asking for additional information, clarification, asking for credentials, and/or a consultation with your attorney.
By Dan Krell
Copyright © 2011
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