We’re thinking of moving. We met an agent at an open house who wanted us to sign a 6-month agreement, so we could be “clients instead of customers”. What does that even mean? – NOT READY FOR COMMITMENT
DEAR NOT READY: In real estate, the terms “client” and “customer” describe totally different relationships with vastly differing levels of service and protection. When a member of the public visits an open house, they are treated as a “customer”. The hosting Realtor is obliged to answer their questions honestly, but beyond that, has a limited duty of care.
For the owner of the house, it’s a different story. When the homeowner has a signed agreement with the Realtor and their brokerage, they are a “client” (in most cases). By signing a contract – the listing agreement, typically — the client has bound their Realtor to strict legal and ethical duties, known as “fiduciary responsibilities”. This makes it the Realtor’s job to protect the homeowner above all else, obey their instructions, respect their confidentiality and negotiate in their best interest.
Both buyers and sellers can sign agreements with Realtors. While doing so now may feel a bit premature, choosing a Realtor and binding them with an agreement can ensure you’re protected once you make a firm decision to move.
PRO TIP: The essence of the customer/client difference is that when a customer asks a question, they get a sentence; the client gets a whole paragraph.
We are downsizing to smaller home. We haven’t sold a property in over 30 years and are anxious about how things will go. What happens if our buyer backs out? – NERVOUS NELLY
DEAR NERVOUS: First, the good news – problems of this nature are highly unlikely and pop up very rarely. To reduce the chance of a hiccup, I give all my clients the same advice: in cases where you are selling and buying, avoid the temptation to close both transactions on the same day.
I suggest you arrange bridge financing with your bank, even if you don’t currently have a mortgage. That way, if anything goes wrong with your sale, you can still proceed to your new home while giving your buyer a little breathing room to figure out their issues.
The odds of hitting a snag are slim, but if you plan ahead, you’ll have an alternate strategy in place should anything go sideways.
PRO TIP: It’s key that you keep the lines of communication open between all parties. If a problem does arise, we can always find a solution with a few days’ notice. #AskDavid #Advice