In today’s struggling real estate market, buyers (especially first time home buyers) would be foolish to write an offer on a home and potentially obligate themselves to a binding contract without the representation of a licensed REALTOR®.
I say this because within the One to Four Family Residential Contract (the form that almost all Minnesota Realtors use for contracts on residential resale homes), there are so many deadlines, obligations and responsibilities for the buyer to meet, that without the professional guidance of a licensed Realtor, a buyer could quickly get themselves into contractual default… probably without even knowing it!
One thing a buyer should definitely consider is the fact that even though we are currently in a buyer’s market, if a buyer decides to make an offer on a house without representation from a Realtor, and the sellers are being represented by a Realtor, that Realtor has the fiduciary duty to represent all of the sellers interest… not the buyer’s interest.
Therefore, it is highly likely that the seller’s agent will not care to protect the buyer’s interest, unless the buyer agrees in writing to have that seller’s agent represent both the seller and the buyer. Representation of both parties by only one agent is called Dual Agent. In Dual Agency, the agent usually then collects one commission from representing the seller and another commission for representing the buyer(s).
Contractually speaking, buyers are required to deliver monies to certain parties at the start of a new contract. If those monies are not delivered to the correct place or by the correct time stated in the contract, the buyer may be in default of the contract and could face default penalties. These penalties may include the forfeiture of the option period (the period where the buyer can back out of the contract for any reason), or worse, they may be forced to purchase the home if the seller decides to pursue that avenue.
Most Realtors like me are not lawyers, but once a buyer does decide to commit to work with an agent through what is called a Residential Buyer Representation Agreement, that buyer has just gone from being a stand-alone customer, to a fully represented client. And when you become a client to a Minnesota Realtor, the information, representation and negotiation advantages that you will receive from your Realtor, will be abundantly clear!