The Traditional “Agency” Model
Traditional home sale transactions usually involve one real estate agent working for the Seller, and a separate agent working for the Buyer. Each agent is paid a commission based on the sales price of the property, and each agent has an exclusive “agency relationship” with their client. “Agency” is another word for a “fiduciary” duty (meaning putting the client’s interest above their own).
A partial list of a Seller’s agent duties include:
- help get the property ready for sale (repairs, inspections, cleaning, staging…)
- recommends an asking price
- advertises in various media
- holds Sunday open houses
- completes their own visual inspection of the property
- negotiates on behalf of the Seller
A partial list of a Buyer’s agent duties include:
- Provide “search tools” to initially locate suitable properties;
- Tour prospective new listings;
- Visit properties with the Buyer;
- Advise about price relative to “the market” as well as to the property’s condition;
- Decipher the disclosure packet;
- Advise on offer strategy;
- Negotiate on the Buyer’s behalf;
- Complete their own visual inspection;
- Potentially renegotiate terms of offer based on new information discovered during inspections or appraisal.
The fsbomyhouse Consultancy Model
There are many circumstances where a Buyer and Seller may not need or want all this service. A common example would be between a Landlord and a Tenant. The parties already know each other and have direct communication. The tenant may have lived in the property for several years and knows all its defects and quirks. Free online tools make it easy to see what other properties in the neighborhood have sold for. The tenant and landlord begin discussion about a sale and come to a verbal agreement or handshake on the outline of a deal.
With us acting as a neutral 3rd party consultant (meaning we do not take on a technical “agency relationship” with either Buyer or Seller), we use our skills acquired over 28 years of real estate brokerage practice to:
- Meet with both parties in our North Oakland office to write and ratify a formal purchase agreement;
- Discuss what are “usual and customary” divisions of closing costs;
- Provide the Seller with all the statutory and recommended disclosure forms appropriate to the location of the property;
- Make sure the Buyers acknowledge receipt of all the disclosures;
- Provide referrals as requested for lenders, inspectors and tradespeople;
- Open and oversee the entire escrow process. This includes recommending a title co, arranging for the payoff of any of the Seller’s loans, interfacing between the title co and Buyer’s lender, review final closing statements and the delivery of Seller’s funds at closing.
- Remain available throughout the transaction to answer any questions, and to deliver the final “congratulations to all” once the closing occurs.
With this specifically defined consultancy role, we charge a flat fee of $3,400, which can be paid by either Buyer or Seller or split between them. The fee is paid in two installments: $1,700 at the end of the first meeting, and $1,700 at the close of escrow.