Most topics covered here at #asksethanything are what I call “front-facing” issues. Mostly using terminology and examples which are relatable and easily to understand. Today’s topic is easy to understand, but odds are you haven’t used your realtor as a “transactional broker”.
Typically, when a realtor assists a consumer with buying or selling a home, they are bound by a fiduciary responsibility. Meaning they have to look out for your best interests, maintain confidentiality and obey your directives. For this (and many other services), brokers are paid a certain commission. However in some corners of the real estate world there is a less dutiful role we realtors play in the consumer’s life: The transactional licensee.
This role is where the realtor essentially facilitates the sale between two parties who have found each other on their own. A “paper pusher”, for lack of a better term. They make sure the necessary steps are accomplished in order to get to settlement. While they’re not bound by confidentiality or loyalty, the transactional licensee is still on the hook for the following:
- the seller will accept a higher price
- the buyer will accept a higher price
- The seller or buyer will agree to financing terms other than those offered.
The transacational licensee still owes the following to their client:
- Exercise reasonable professional care
- Deal honestly and in good faith
- In a timely fashion communicate all offers and correspondence between parties
- Comply with Real Estate Disclosure Law
- Account for escrow monies
- Disclose all conflicts of interest
- Provide assistance with documents
- Advise the client to seek expert advice outside the scope of their expertise
- Keep the consumer updated about tasks needing completion
- Disclose all financial interest in services rendered to the consumer
Overall, this can be a great way convey property without the expense of attorneys (In PA, we don’t use them very often unless we get in trouble). We realtors can line up appraisers, municipal inspections, settlement and coordinate the entire transaction. This happens to be fairly popular with landlords who wish to sell to their tenants or a transaction among family members. So if you have a lead and arrange your own real estate transaction with another party, it can be really helpful to bring in a realtor to ensure it goes smoothly. Again, it is at a deeply discounted fee and can save everyone some money.