Why do I need a Realtor? Can I save money without one?

I've heard many buyers say they can "save money" by not using a Realtor. Many of them are first time buyers who have never seen a purchase contract, let alone gone through escrow, reviewed title, procured financing, etc.

Read a quick Q&A on a recent transaction below, and see if you're comfortable dealing with these kinds of contingencies and timelines on your own. Are you ok with your thousands of dollars in earnest money being on the line by missing just one of the many timelines in the contract? When you go into a transaction on your own, you most likely won't understand any of these requirements for meeting the terms of your contract - but the Seller's Realtor will. Good luck.

(From Washington Realtor Hotline Attorney Annie Fitzsimmons):
Situation:
Buyer and seller used the statewide purchase agreement with financing and inspection contingency addenda. Buyer timely submitted a work order request under the inspection contingency on Saturday, April 4 and seller never responded. Seven days later, on Saturday, April 11, buyer terminated the purchase agreement. Seller claimed the termination was untimely. Because seller refused to make repairs, buyer's lender declined financing. Seller had never forced buyer to waive the financing contingency. Buyer terminated based on the financing contingency. Is buyer entitled to recover the earnest money? If so, why?

Analysis (if you have an experienced Realtor representing you):
When buyer gave seller a request for repairs under the inspection contingency, seller had three business days to respond. Since the request for repairs was issued on a Saturday, seller's three days to respond did not start to run until Monday the 6th and expired on Wednesday the 8th.

Because seller never responded to buyer's request for repairs, buyer had three business days to terminate the agreement or reach some other agreement with seller. If buyer did neither, buyer's inspection contingency would waive. Buyer's three business days included Thursday the 9th, Friday the 10th and Monday the 13th. Buyer terminated timely on Saturday the 11th.

In addition, because seller never forced buyer to waive the financing contingency, buyer's financing contingency was still in full force and effect. It did not matter how many days had passed since mutual agreement. If seller never forced buyer to waive the financing contingency, the financing contingency was never waived. As a result, when lender declined buyer's financing, buyer was entitled to recover the earnest money, presuming buyer could provide seller with a letter from lender showing timely application, sufficient funds to close the transaction and the reason for denial.

Buyer is entitled to recover the earnest money under either or both the inspection contingency and the financing contingency. If seller refuses to release the earnest money, buyer should be advised to seek legal counsel.

Seattle Realtor, Broker, Agent - Seattle Real Estate

Agent, Realtor, Broker, Definitions

"Realtor" has become ubiquitous in the public for defining all kinds of real estate professionals. Although it's the commonly used term, it's not appropriate in many cases. This should serve as a guide to buyers and sellers as to the definition of these real estate professional designations.

Agent: A person who represents you in a real estate transaction. This is a very generic term. It literally means that you have an agency relationship with that person. There are many types of agents.

Salesperson: In Washington state, this is your most common type of Agent. A salesperson is licensed by the state to sell real estate. The state requires real estate classes to be taken and a salesperson exam to be passed.

Broker: A broker is also licensed by the state. Usually, a salesperson/agent takes a large course load of classes to become a broker, including Real Estate Law, Brokerage Management, and Business Management. Brokers in Washington are required to have at least 2 years of experience as a full-time salesperson/agent (there are a few exceptions). Brokers also have to pass another exam, this time with higher qualifying scores. Brokers can manage a real estate brokerage.

Associate Broker: A broker who has been licensed by the state, but works within an office that has a different Designated Broker.

Designated Broker: The broker who is responsible for all activities of a real estate brokerage.

Realtor: A member of the National Association of Realtors - this is a designation of membership, not a state-licensed position. Agents and Brokers must take extra course work in Ethics and adhere to a more stringent guideline of rules for doing business.

In short:
Anyone who represents you is an agent.
That agent can be a salesperson or a broker.
Any of those people can be a Realtor, but are not unless they join the organization.

Oh, and by the way - it's "Real - tor", two syllables. Not "Real-a-tor".

Separation of Brokers and Banks

A new law passed by the Federal Government has created a permanent ban on banks getting into the real estate brokerage and management business. At stake was banks' desire to house mortgage lending and a real estate brokerage under the same umbrella, creating a one-stop-shop for real estate transactions.

The new law probably makes sense in the long-term, although there are some efficiencies that may have been created by a few of these companies. Think about ending the countless phone calls and faxes between lenders, agents, and buyers/sellers to transfer documentation. These large companies could surely have saved us some time, some paperwork, and just plain old paper.

Despite those possibilities, the consumer safeguards in this law win out, and there is a better competitive marketplace when more companies are competing for your dollar. With the scrutiny placed on banking in our current financial state, it doesn't make sense to allow greater control of these transactions by one entity.