Whether you’re about to begin the process of buying or selling, or you’re a seasoned buyer, a relationship with a licensed and experienced Realtor is crucial in making the process successful. Realtors are educated, licensed, and experienced in their market. Their knowledge can greatly benefit their clients. However you find your Realtor- from a coworker, an ad, or a neighbor – it’s important to know what the Realtor expects from the client. The three things you should never say to your Realtor are to protect you legally and to insure a successful working relationship with your Realtor.
“Don’t Tell the Buyers about the Lead Paint”
In just about every state in the US, there are disclosure laws. These laws are designed to protect potential home buyers. Both sellers and Realtors are required to abide by those laws.
As a property owner, you’re required to disclose pertinent information about the condition of your home. That information might include a previous roof leak and how it was repaired. It might include a pipe burst, mold, foundation issues, boundary discrepancies, etc.
If a homeowner knows about defects or potential problems that could affect the value of a property, it’s considered illegal in most states to not disclose that information. If you know your home has lead based paint, you are most likely legally obligated to disclose.
But does that translate to the Realtor?
Yes. Any information a Realtor knows about a property, they’re also required to disclose to potential buyers. If you informed your Realtor about the presence of termites or boundary issues, you can reasonably expect them to tell future buyers about those issues.
What happens if you fail to disclose, or your Realtor fails to disclose information to potential buyers? If you violate disclosure laws, you are subject to a lawsuit. If your Realtor knew information, and he or she failed to disclose to the buyer, they are also subject to a lawsuit and discipline by state licensing commissions.
“I Don’t Want to Accept Any Offers from Buyers with Children.”
As with disclosure laws, Realtors are required to abide by federal housing laws. In particular, Realtors and homeowners are expected to abide by the federal law, the Fair Housing Act of 1968.
The Fair Housing Act prohibits discrimination based on a person’s race or color, sex, religion, national origin, familial status, or disability.
Telling your Realtor that you don’t want to sell, rent, or show your property to someone that’s married with children is a violation of the Fair Housing Act. A Realtor isn’t obligated to abide by a seller’s wishes that violate the Fair Housing Act.
If a violation occurs, a complaint can be filed with the Department of Housing & Urban Development or a lawsuit can be filed in state or federal court. The complaint or lawsuit can be filed against whoever committed the violation. Since a Realtor’s livelihood is at stake, you can reasonably expect them not to abide by wishes that violate the Fair Housing Act.
“Will You Cut Your Commission?”
While it’s not illegal to ask a Realtor to reduce their commission, it’s simply not appreciated by the hard-working Realtors that help sell your home.
Why is this not the best approach? Consider that a Realtor is a licensed, educated professional. Their work goes far beyond what you see when they plant a sign in the yard. In fact, average deals require 30-45 days’ worth of work, all with the hope of getting paid! Those 30-45 days require giving up family time, late night negotiations, constant communication with attorneys and title companies, countless marketing, and so much more… without being a paid a dime, yet!
Another thing to consider is that the commission paid to a Realtor is typically not entirely pocketed by the Realtor. Instead, as an independent contractor, they’re required to withhold income taxes and health insurance. In addition, many Realtors pay the entire marketing bill out of their own pocket (before ever being paid), so their commission could cover the marketing for your home. Depending on the brokerage, Realtors can also reasonably expect to have a portion of their commission cover desk fees, broker cuts, and operating expenses. Their take-home pay is substantially less than the commission charged to the seller.
The final thing to consider is that when you go to work for 30-45 days, you expect to be paid. You would be insulted and devalued if your boss asked you to take home 10%, 20%+ less than you earned just to help his bank account. That same principle applies to the scenario of a Realtor commission.
Realtors do substantially more than put a sign in the yard and collect a check. In fact, they are professionals that analyze market trends, price trends, housing affordability, comparable assets and value, legal ramifications, and so much more. They work hard to earn their commission, protect their clients, and provide a valuable asset to the public.