What Consumers Need to Know When Buying Real Estate in Alabama

Don’t Be Afraid–Be Aware

Representation

First and foremost the consumer needs to know for sure that they have a qualified Realtor® to represent them whether they are buying or selling. Don’t take this relationship for granted; know for certain. Agency relationships that establish representation cannot be assumed or implied. They must be in writing. Let me explain a few reasons why the consumer needs to be represented by someone.

First, buying and selling real estate is very technical in the sense that certain processes must be completed and in a particular order. Buying and selling real estate is also very legalistic. Most real estate transactions close without any major complications either prior to, or after closing. It is the exceptions to that rule when the consumer finds out just how technical and legalistic real estate sales can be. After- market conflicts are seldom settled between buyers and sellers. Tempers flare, distrust and disbelief sets in, accusations are made toward everyone involved in the transaction. Finally law suits are filed to settle the dispute.

Law suits create a need for both parties to hire legal counsel. In preparation of the case it is determined that you the consumer, was not represented by the Realtor® that you worked with. At the time you began looking at homes you didn’t want to sign any type of contractual agreements. In this situation, according to Alabama law, the Realtor® was working as a Transaction Broker and was limited to the duties they could perform for you. A Transaction Broker is a licensee who assists one or more parties in a contemplated real estate transaction without being an agent or fiduciary or advocate for the interest of that party to a transaction. In order to have been represented in Alabama you would have had to sign a Single Agency Agreement with a brokerage firm. Remember, agency relationships can’t be assumed or implied. They must be in writing. After the fact is a bad time to learn that your best interest was not represented when you made the largest investment of a life-time.

Pages: 1 2

What Consumer’s Need To Know

Questions Need Answering

This information is specific to what consumer’s need to know when buying or selling real estate in Alabama. Even more specifically, what consumers need to know when working with a real estate broker? Especially since Alabama is a Caveat Emptor state which places total responsibility on the buyer to do their due diligence in inspecting every aspect involved with a property prior to closing on a sale.

For years the seller has known who represents him when selling real estate but who represents the buyer? Who looks out for the buyers best financial interests? Some agents think the liability is too great when representing a buyer, largely due to the Caveat Emptor law; therefore they want to assist the buyer as a transaction broker to limit their liability. That being the case, many times, the poor buyer is left to fend for themselves without being told what they need to do prior to closing so they can protect their legal recourse options. The State of Alabama understands the precarious situation the buyer  is in when buying in Alabama so they provide

Pages: 1 2

What Buyer’s Want and Need to Know

It's Alabama Law

It seems I’ve opened a can of worms already talking about the dangers a buyer of real estate in Alabama faces. You might want to review some of my previous blogs such as “Meaningful Conversations for Alabama Realtors,” or “Establishing Relationships,” or “Just Tell it like it is.”  In all these blogs I explained the importance of disclosing the fact that Alabama is a Caveat Emptor state which places all the responsibility for detecting possible deficiencies in a property prior to closing. All real estate practitioners know the meaning but many don’t seem to understand the impact it has on their clients.

For many years consumers who are buying real estate have asked the question, “Who represents us, and who represents the seller?”  The National Association of Realtors has surveyed thousands of buyers and sellers to determine their satisfaction with representation by a Realtor. By far, buyers are most dissatisfied because it seems everybody represents the seller and no one wants to represent the buyer. Representation can’t be mandated on the National level due to variances in state laws. Since my job is educating people about real estate, primarily in Alabama, and since I live and work in Alabama, this article will be specific to our state.

Alabama law requires….

[Read more…]

Just Tell It Like It Is

Disclose RECAD & Caveat Emptor in first conversation

The most important fact

an Alabama real estate agent can share with prospective buyers and sellers of real property in Alabama is that Alabama laws are different than most other states. Especially those states adjacent to Alabama because industry standards tend to spread across state lines. Alabama is a “Caveat Emptor” state. This simply means “buyer beware!”  To be more precise, Alabama is a modified Caveat Emptor state; because it exempts “New Homes” from Caveat Emptor. New homes are warranted by the builder while secondary (pre-existing) or used homes are not warranted by anyone. The purpose of “Caveat Emptor” is to notify the buyer that it is his responsibility to have the proper inspections performed on a home before they actually close on the sale. The buyer is not to rely on the seller to disclose all imperfections of a property, when making a decision whether to buy or not to buy.

Due to influence of markets in other states, some brokerage firms require their seller to complete a “Sellers Disclosure” form at the point of listing. [Read more…]

Creating A Business Plan (Part Three)

How's Your Business Plan Progressing

Today we will continue building our business plan by honestly evaluating our past work habits, personalities, and job performance during the last year so we can realize the things we need to improve upon in the coming year. For those reading this article that reside outside Alabama, please keep in mind that Alabama law differs from surrounding states because Alabama is a “Caveat Emptor” state which places responsibilities on the purchaser to research all aspects of a property before purchasing.  This article is written specific to Alabama even though most parts of the business plan will apply to anyone, regardless where you live and work.

When working with buyers or sellers in Alabama, it is mandated by Alabama License Law, and regulated by the Alabama Real Estate Commission , that upon initial contact with a prospective buyer or seller, the agent must disclose and explain the various possible agency relationships available through their agency. This is referred to as RECAD which is an acronym for Real Estate Consumers Agency and Disclosure Act. The law states this disclosure is to take place upon initial contact, as soon as reasonably possible, and before any confidential information is exchanged. [Read more…]

“CAUTION”—Realtors ® pay attention

Caution--Realtors pay attention

When In Doubt Disclose

I am writing to all Realtors® because I see constant violations of laws, rules, regulations, and ethics of both State of Alabama and the federal government. To use one of my favorite phrases, “if you’re driving down a highway and look in the rear view mirror to see a blue light flashing; it’s too late to be concerned about how fast you were driving. The damage has already been done.” So it is in the practice of real estate. Once you receive a citation for a violation, you will have to suffer the consequences. You can’t simply say, “I’m sorry, I didn’t know I was violating a law.”  Realtors® are professional members of the largest industry in the world. We are supposed to know the laws that govern us and abide by them.

The things I consistently see real estate agents violate in disclosure laws [Read more…]