STOP! I Must Review the Consumer Notice with You: Pennsylvania’s First Step in the Real Estate Process

It’s always an exciting time when a first-time buyer decides to make the leap from renter to homeowner, or when a long-time owner decides to upgrade and buy their dream home.  

But as you begin talking to real estate agents about buying or selling, you will be STOPPED and presented the “The Consumer Notice.”  This is not a contract, but an affirmation that you, the consumer, have been advised of your choices and it must be presented by any licensed PA Real Estate Professional before they can have any discussion with you regarding your needs and motivations for seeking real estate services. 

Since it was first required by law in 1999, the Consumer Notice has educated real estate consumers of the various business relationships that exist in a real estate transaction. 

• Seller Agent: the licensee works only for the seller/landlord
• Buyer Agent: the licensee works only for buyer/tenant
• Dual Agent:  the licensee works for both seller/landlord or buyer/tenant
• Designated Agent: the broker may designate one or more licensees from the agency to represent the consumer. This occurs, for example, when your real estate agent and the other party’s real estate agent work for the same company or office.
• Transaction licensee: Licensee performs real estate services without having any relationship to the consumer. This would apply, for example, it you were selling your home to a good friend at a mutually agreed upon price and simply needed someone to complete the paperwork.

By signing the Consumer Notice, you and the agent have not entered into a binding contract, but simply acknowledged the nature of your relationship. For example, if you’re a buyer attending an open house, the agent hosting the open house may identify themselves as the seller’s agent. This means their duty is to their client – the seller.

Because this person represents the seller, you would want to be careful what information you disclose to that agent during what may seem like casual conversation. If you end up pursuing a purchase of that home, you may be sorry you disclosed certain information.   

A copy of the Pennsylvania “Consumer Notice” is available at any real estate brokerage office, from any licensee or if attending an open house. To obtain a copy of the “Consumer Notice” or to gain more information about agency relationships in Pennsylvania, feel free to contact us at 717-364-3000.

For further information about real estate laws and consumer education in the Commonwealth of Pennsylvania, visit the Pennsylvania Association of Realtors.

Deciding on the ideal real estate agent can be daunting, but our services are ideal for buyers interested in beginning their search for the perfect property or for sellers seeking to list their property with a competent and fair brokerage.

Through our partnership with Johnson, Duffie, Stewart and Weidner, we step outside of the conventional broker model by ensuring that an attorney is included in every real estate transaction at no additional cost.

You Only Have One Chance to Make a First Impression & That Includes the Internet

With more and more people turning to the internet for shopping, it was only a matter of time before people started to do the same when searching homes for sale.  Gone are the days when you relied on a real estate agent for access into a homes interior, and he/she would have to drive you around to show you a variety of homes just to walk in the door, know that it is not what you want, and walk right back out.  Now potential buyers have that power to explore inside, outside and all around houses all by themselves without having to leave the comfort of their home, or with their smart phone as they are out and about.

With this in mind, the demand for quality real estate photographs has never been higher, and yet, we still find home photos on line that are dark, that are of a corner of a room, and are just poor quality.  Heck, there are even photos of laundry thrown about and dishes in the sink.  When searching homes for sale online, you will inevitably come across many potential homes.  However, the only ones that will be given a second look at are those that are presented well in the photos.  After all, if the house does not look good in a picture, what are the odds of it looking good in person? 

There are two main problems that occur in amateur real estate photography that are sure to cause a potential buyer to gloss over the listing online.  The first is perspective and the second is season.

Many real estate agents are content with standing directly in front of a home when taking a front shot.  This provides no depth to the house and makes it look smaller than it is and almost cartoonish.  Instead, the better perspective would be to move off to one side of the house and crouch down.  That way, the building looks bigger by comparison, and you can see how far back it goes.  Even if the house does not go back very far, it at least lets a potential buyer know that there is a home behind that door.

  Second, the issue of seasonal photographs is such an obvious one that it seems everybody should be aware of it.  If I am looking for a house in the summer, it will be hard to picture myself there if the photo was taken under two feet of snow. 

For those agents who do not have an eye for architectural photography or the ability to enhance photos, it is a wise investment in having them taken by a professional.  There is no better way to peak interest in a home than to have quality images on line as soon as the property is listed.  It is all about that 1st Impression. 

The Importance of Credit Scores in Real Estate

The search for a new home can be an exciting one; however, before you begin your quest for that dream home, your Realtor® would require that one of your first steps would be to meet with a mortgage lender.  This individual will help you determine the price range at which you should be looking, and at the end of the meeting, if all goes well, you should find yourself pre-qualified for a mortgage loan. 

What is one of the primary factors that go into a lender’s decision of whether or not to grant a loan?  Credit scores.  It has been estimated that nearly 75% of all mortgage loan decisions are made with the applicant’s credit score in mind.

The importance of credit scores in mortgage decisions and real estate transactions has risen over the past decades, and this is in large part due to what the lenders call risk-based mortgage pricing.  Essentially, the lender will make a decision on a mortgage based on how much risk is involved in the transaction.  If an individual has a credit score below 700 (which I’m sure none of you do), then that tells the lender that they are at higher risk of defaulting on their obligation to pay, and that will be reflected in the loan that they propose.  They may be offered a higher interest rate.

Now before you rush off to a free credit report website in a wave of panic, please keep in mind that a credit score is not a permanent and accurate representation of who you are as a person, and many mortgage lenders understand that.  It is important to find a lender who can see you as an individual with your own story.  That is not to say that you should ask them to completely disregard a credit score of 450 and give you a loan for that million dollar home, but there are some lenders out there who are willing to work with a low credit score, owing to the fact that you are not a number, but a person.  They will take into account things like your rental history.

That being said, it can’t hurt to try and raise your score before meeting with a lender, and there are many ways to do this.  Getting a credit card and keeping up with the payments is a quick and easy way to improve your credit and show lenders that you are serious.  In the end, that is all the lenders want.  They want to know that you are a responsible borrower and understand the value of a positive credit history, and a high credit score will give them a good first impression. 

Drop the "Fly by Night" - The Importance of Having a Buyer’s Agent Represent You.

So You are Shopping to Buy a Home.  Shopping?  Yes, Shopping. 

You are on the internet and see a house of interest or drive past a home with a For Sale sign, and you have questions on these homes or you want to take a tour.  What do you do? You call the agent on the sign or on the listing, of course.  They show you the house.  It is not really what you wanted, so you continue your search. You do the same thing with the next property that you want to see and so on, and so on, don’t you? 

Good idea?  Not so much, and I will explain why this is not in your best interest.

Buying a home is more complex then just calling a listing agent and asking that agent to show you a house. 

Before you start looking at homes, it would best to do your research to locate a REALTOR® to represent YOU.   By hiring a REALTOR®, you will have representation throughout the entire process.  They will also be objective when showing you a home and point out potential issues. A buyer’s agent will be able to show you any property that is listed for sale no matter which company has it listed.  Brokers co-operate by listing their properties on the multi-listing service.  Keep in mind that a listing agent is looking out for the interests of the seller – they are representing them and in doing so, owe them their loyalty. 

Whether you are a first time home buyer or have gone through the process many times, you should still plan to use a buyer’s agent for the same reasons as listed above.  Upon your initial meeting you would want to discuss the Exclusive Buyer Agency Agreement with your REALTOR® which would spell out the relationship between you both. 

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS® and are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again. To read more about why you should use a REALTOR® visit: http://bit.ly/OPBo5.

The best thing a home buyer can do is to research and gather as much information as possible so they can make an informed decision. Remember that knowledge is power!  Don’t be afraid to ask questions.   

What advice would you give any one buying a house in today’s market?

Navigating the “Minefield” of Real Estate

We have been focusing our blog writings on the necessity of having a lawyer involved in the real estate transaction.

We thought it would be great to talk with Mark Duffie, broker and lawyer for Lawyer’s Realty, about his pursuit in the legal field of real estate. The following is a Q&A on this topic.

What is it that appeals to you about the law, especially as it pertains to real estate?

With respect to the practice of law in general, the sense of problem solving and assisting others with legal matters is what drives me. 

What do you enjoy the most about your job?

The sense of accomplishment is rewarding especially when it is done on someone’s behalf.  In the real estate field, you become a facilitator of transactions.  The structuring of the deal and the documentation often make or break the deal. 

What do you like the most about working with the law and real estate?

Real estate really provides an opportunity for attorneys to become very creative to meet the demands of the client.  The challenges involved with every transaction are unique as are the solutions.   The closing on a complicated well structured deal is what we real estate attorneys work for.  That is what makes real estate law so rewarding.

What are some of the legal “pickles” buyers and sellers  get into by not having a lawyer involved in the real estate transaction?

Legal pickles.  That is an open can of worms.  Most real estate agents and clients are not educated on fundamental contractual principles including breach and remedies. 

Buyers and sellers enter into agreements often times not knowing the implications given the circumstances.   When the transaction warrants, standard agreements need to be amended.  That is often times when the “pickles” occur. 

When a buyer acquires property, they do not just acquire bricks and sticks.  They acquire a bundle of legal rights of which they must become aware.  They need to be educated on restrictions, easements, clean and green as well as other acquired rights. 

The problems arise when these agreements are improperly drafted and these rights are not reviewed or improperly reviewed.   Specifically, I have seen sellers try to sell a property that was already subject to an option or buyers attempting to buy a property under a fictitious name. 

If you had to describe the real estate transaction in one word or one phrase, what would that word or phrase be?

Minefield! 

Click here to find out more about the legal/real estate relationship.

Realtor + Attorney = Win/Win!

"We were very pleased with both sides of Lawyers Realty - the legal side and the real estate side. We find it to be a terrific model for the business." Ralph Mann

Buying or selling a home in today’s market can leave you with more questions than answers.  Factor in the legal worries and it’s downright overwhelming.

If an attorney is not required for a real estate transaction, then it must not be that important, right? Wrong.  In surrounding states such as Delaware and New York, they realize the significance of having an attorney in the real estate transaction and actually require it by law.  In Pennsylvania, a title company can handle the explanation of the legal information included in the closing paperwork. However, these companies often lack the legal education and accreditation to inform consumers of the detailed explanation of the documents. 

Fortunately, Lawyers Realty is forward thinking on these issues, including legal representation in the real estate transaction.   Our group is a one-stop shop to meet all of your real estate needs with a Realtor® and an Attorney.  Moreover, there is no additional cost for this legal protection.  The professionals at our firm walk you through every step of the transaction, including the complicated legal documents.

Why not be certain your transaction is protected?

Our attorneys’ offer services such as: reviewing the seller’s property disclosure statement, reviewing the contract before it is signed and attending the settlement on your behalf.  This frees up the time for the REALTOR® to assist in the aspects most important to you: finding your dream home and/or selling your existing home rather than deal with the day-to-day hassles of legalese.

We also understand the need for the home shopper to have immediate access to information. Our user-friendly website offers detailed property information, photos and an opportunity to ask questions with timely responses. On our website, you can:

• Search Homes for Sale Harrisburg, Homes for Sale Camp Hill, Homes for Sale Mechanicsburg, Homes for Sale Hershey or any of Central Pennsylvania
• Set up your personal Lawyers Realty Home Key account 
• View pictures, property details and community information
• Schedule appointments to tour Homes for Sale
• Receive “Just Listed” and “Open House” notification
• Review local school and community information
• Access selling and buying resources

Your turn! What real estate issues have you experienced? How can we help?