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Agency and Agency Relationships Explained
One question I consistently receive from clients is the difference between having a buyer’s agent, seller’s agent, or dual agent in a real estate transaction. The below article is from Realtor® Magazine and explains the differences. If you have any additional questions, please let us know.
The term “agency” is used in real estate to help determine what legal responsibilities your real estate professional owes to you and other parties in the transaction.
The buyer’s representative (also known as a buyer’s agent) is hired by prospective buyers and works in the buyer’s best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.
The seller’s representative (also known as a listing agent or seller’s agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract.
A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. The subagent works with the buyer to show the property but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer customer can expect to be treated honestly by the subagent.
A disclosed dual agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties.
Designated agents (also called appointed agents) are chosen by a managing broker to act as an exclusive agent of the seller or buyer. This allows the brokerage to avoid problems arising from dual-agency relationships for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties.
A transaction broker (sometimes referred to as a facilitator) is permitted in states where nonagency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
Local Market Sales Update for March 2022
I wanted to touch on the final numbers for March 2022 for Haywood County. Low inventory continues to be the prime market statistic. In March 2021 we had 139 new listings come on the market as compared to only 125 new listings this year in March. Last year in March we had a total county inventory of 217 homes on the market. This year we only had 133 total homes on the market, an almost 39% decrease from March 2021. That all translates to a 1.1 month’s supply of homes as compared to a 1.9 month’s supply of homes in March 2021, a 42% decrease. (This means if sales rates stayed the same, and no new homes came on the market, we would be out of homes by early May.)
The average home sales price in March 2021 was $355,654. In March of this year the average home sales price was $379,339, a 6.7% increase in average price. Year to date, homes are selling for 97% of the original list price. Many homes are selling for more than the original list price as buyers compete for the sale, due to low inventory of available homes.
It seems there is no end to price increases as long as inventories remain low, and the cost of building a new home continues to increase. If you are thinking of buying a home, or selling your existing home, let us know. We can help you successfully negotiate the process.
7 Reasons to Work with a Realtor®
REALTORS® are members of the National Association of REALTORS® and subscribe to its strict Code of Ethics. When you’re buying a home, here’s what an agent who’s a REALTOR® can do for you.
- Act as an expert guide.
Buying a home typically requires a variety of forms, reports, disclosures, and other legal and financial documents. A knowledgeable real estate agent will know what’s required in your market, helping you avoid delays and costly mistakes. Also, there’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language. - Offer objective information and opinions.
A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget. Agents are also a great source when you have questions about local amenities, utilities, zoning rules, contractors, and more. - Give you expanded search power.
You want access to the full range of opportunities. Using a cooperative system called the multiple listing service, your agent can help you evaluate all active listings that meet your criteria, alert you to listings soon to come on the market, and provide data on recent sales. Your agent can also save you time by helping you winnow away properties that are still appearing on public sites but are no longer on the market.. - Stand in your corner during negotiations.
There are many factors up for discussion in any real estate transaction—from price to repairs to possession date. A real estate professional who’s representing you will look at the transaction from your perspective, helping you negotiate a purchase agreement that meets your needs and allows you to do due diligence before you’re bound to the purchase. - Ensure an up-to-date experience.
Most people buy only a few homes in a lifetime, usually with quite a few years between purchases. Even if you’ve bought a home before, laws and regulations change. Real estate practitioners may handle hundreds or thousands of transactions over the course of their career.
Be your rock during emotional moments.
A home is so much more than four walls and a roof. And for most buyers, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on the issues most important to you when emotions threaten to sink an otherwise sound transaction.
This post was courtesy of the National Association of Realtors®, Realtor® Magazine
Home Sales in Haywood County
I thought I would go over a few key points from February 2022 home sales in Haywood County.
In February 2021 we had 104 new listings on the market. This year in February, we only had 74 new listings on the market, a drop of almost 29%. In February 2021 we sold 77 homes, but this year we only sold 72 homes, mostly a result of lack of inventory from which to sell.
The average sales price of homes in the county rose from $293,216 in February 2021 to $362,079 this year, an increase of 23.5%. In February 2021 the days on the market until a sale was 51. This February the days on the market until a sale was only 32 days. A decrease of over 37%.
Our total inventory of homes for sale was 211 in February 2021. This February our total inventory of homes for sale shrank to 120, a drop of 43%. A “balanced market” in real estate is usually considered balanced when there is about a 6 months’ supply of homes. That is if no new homes came on the market, how many months would it take to sell the current inventory of homes. At the end of February, we only had a one-month supply of homes on the market. That puts us in a very hot sellers’ market.
Many homes are going under contract within 2 to 4 days after being listed. This is great for the seller, but not so great for the buyer. When 5 or 6 offers are received on a home, only one can be accepted. That means 4 or 5 buyers will be frustrated they did not get their offer accepted. If you are considering selling your home, please contact us. We can explain the process and guide you to a successful sale. If you are considering buying a home, please contact us. We can help you navigate this hot market.
Statistics are from our Canopy MLS Local Market Update for February 2022
Buying in a Tight Market
Our market continues to be tight, that is inventories are extremely low and we have more buyers than sellers. (A sellers’ market)
I found the below advice about buying in a tight market and thought I would share with you.
HOW TO Buy in a Tight Market
Increase your chances of getting your dream house in a competitive housing market.
Get prequalified for a mortgage.
You’ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.
Stay in close contact with your real estate agent.
Your agent will be on the lookout for the newest listings that meet your criteria. Be ready to see a house as soon as it goes on the market — if it’s a great home, it will go fast.
Scout out new listings yourself.
Browse sources such as realtor.com and local real estate listing sites. Set up alerts for the neighborhoods and characteristics you’re looking for. Drive through your target neighborhoods, and if you see a home you like for-sale, send the address and listing agent’s name to your agent, who can schedule a showing for you.
Be ready to make a decision.
Spend plenty of time in advance deciding what you can afford and must have in a home so you won’t hesitate when you have the chance to make an offer.
Bid competitively.
Your first inclination may be to start out offering something less than the absolute highest price you can afford, but if you go too low in a tight market, you will likely lose out.
Keep contingencies to a minimum.
Restrictions such as needing to sell your home before you move can make your offer unappealing. Remember that, if the market is tight, you’ll probably be able to sell your house rapidly. You can also talk to your lender about getting a bridge loan to cover both mortgages for a short period.
But don’t get caught in a buying frenzy.
Just because there’s competition for a home doesn’t mean you should buy it. And even though you want to make your offer attractive, don’t neglect inspections that help ensure the house is a sound investment.
The above is courtesy of Realtor® Magazine
Sales Stats from January 2022
I wanted to mention a few statistics from home sales in January. Inventory, or lack thereof, remains front and center. In January 2021 we had 208 homes on the market in Haywood County. This year, January 2022, we only had 122 homes on the market. This is 0ver 41% less available inventory than last year. That is only a one-month supply of homes. A balanced market is considered to be a market where the number of buyers and sellers are approximately equal. The real estate industry as a whole considers a balanced market to be a 6.5 months’ supply of homes. This means we have a market where we have far more buyers than sellers. For every home that comes on the market we have multiple buyers looking and possibly making offers, which leads to competition between buyers, which leads to higher selling prices. For example, in January 2022 the average home price rose to $382,304 from $353,126 in January 2021. This was an increase of over 23% from year to year.
Another stat of interest was Percent of Original List Price Received. Last year (2021) was a very good year in real estate sales and the average home sold for 93.6% of the original listed price. This year in January the average home sold for 98% of the original list price. Many homes sold for well over list price.
Also, even considering the lack of inventory in January 2022, we had an 8.5% increase in the number of homes sold.
Will home prices continue to rise this year? Well, I wish I knew, but I don’t have the proverbial crystal ball. I do believe, however, that home prices will continue to remain high and probably increase a little more as long as inventories remain so low.
These beautiful mountains of Western North Carolina continue to bring workers who can work from home, retirees who want to live out their lives here, or city dwellers who want a second home where they can get away from the city and make some cash renting their home on VRBO or Airbnb.
If you are considering selling your home, I cannot think of a better time to do so. If you are looking for a home here, let us know. We can help you negotiate this crazy market.
Cold January but Hot Market
So far, we have had a bit of snow each weekend in January. At my house the depths have ranged from a trace to a couple of inches, 5 inches, and once 7 to 8 inches. At least it has warmed up enough during each week to melt most of the snow before another one hit. The morning lows have been cool, with lots of mornings in the teens and low 20’s.
It has been an especially sad month for Barbara and me, as we lost Dakota. He was our beloved 14 years old Goldendoodle that was a member of our family since he was 7 weeks old. He will be missed greatly.
The real estate market is super-hot here. I listed a home last Friday afternoon at 5:00PM. By Saturday morning my phone was blowing-up with calls and I had more showings scheduled than I have ever had on a house. By 11:00AM Saturday morning, the house was under contract. That afternoon I had 3 backup contract offers.
The main factor driving this hot market is inventory. Inventories of homes for sale are the lowest I have ever seen them. If you are thinking about selling your home, let us know. We can prepare a Comparative Market Analysis on your home to give you a good idea of your home’s worth in our current market. Also, we do professional photography to make your home really pop on the MLS.
As a side note, Cataloochee Ski Area has had a great January. Currently they have 18 of 18 trails, and 5 of 5 lifts open for both day and night skiing with a base of 39 to 58 inches. It doesn’t get much better than that here in the “banana belt” of ski areas. Stay safe!
December 2021 Sales Results
Customers have asked how 2021 turned out for real estate sales, so I thought I would discuss some of the final numbers for Haywood County, NC for December and the year 2021.
In December we sold 122 homes compared with 125 homes in December 2020. This slight drop was mostly due to the availability of homes for sale. In December 2020 we had 257 homes on the market for sale. In December 2021 we only had 157 homes for sale, almost 40% less inventory.
The average sales price of homes sold in December 2021 was $377,385, compared to $334,447 in December 2020, for a gain of 12.8%
The average list price of homes in December 2021 was $431,126, compared to $376,193 in December 2020, for a gain of 14.6%.
Final year numbers for 2021 were as follows:
- The number of homes sold rose 7.0% from 2020.
- The average sales price of homes rose 18.6% from 2020.
- Number of days on the market dropped 53.3% from 2020.
The above numbers certainly show that home sales are very strong here in the Waynesville/ Maggie Valley area. The biggest issue we currently face is limited inventory for sale. With limited inventory it looks to me that prices will continue to rise as buyers compete for fewer homes. If you are considering purchasing a home, or maybe deciding if it’s time to place your home on the market, please let us know. We can help with honest advice and solid data allowing you to reach an informed decision.
Thank you for your interest.
We Had a Bit of Snow
I took this photo this morning, January 3rd, from my home on Utah Mountain. We had about 3 or 4 inches of snow, depending on where you measure, before it began to melt. It was 71 degrees here on Saturday afternoon. Snow and 29 degrees on Monday morning. I always say, if you don’t like the weather here in the mountains, just stick around.
Cataloochee Ski Area, above Maggie Valley, had closed their slopes last week due to the warm weather and loss of snow on the trails. Today they are blowing snow like crazy, and plan to open tomorrow, January 4th, at 9:00AM. So, get your ski rack on the car, and get your skis waxed. See you on the slopes tomorrow. Cataloochee is now selling lift tickets online. Go to Cataloochee.com/tickets to purchase your lift tickets without having to wait in a line at the ski lodge.
It has been an amazingly warm Fall and Winter so far. Maybe 2022 will bring some more snow and good times on the slopes. See you there.
Thanks for a great year!
I wanted to take a moment to say “thank you” to everyone out there who helped us have a great year. It’s too easy in this hustle-bustle world to forget to acknowledge those who made your business a success. With Covid-19, the Delta and Omicron variants, shortages of inventory, rising real estate prices, and inflation in general, it’s easy to forget to say a simple “thank you”.
As the Christmas season is upon us, please consider those around you that may not be doing so well. That veteran soldier and the widow or widower down the street who almost never comes out of the house and lives alone. Give them a call during this season to let them know you are there for them. To some, a kind word from a neighbor could mean a lot.
Merry Christmas and Happy Holidays to you all. May 2022 be an even better year.
