Rules of engagement for buying a home

May 25, 2008|By Donna M. Owens | Donna M. Owens,Special to The Sun

When Sherry Spruill first met her real estate agent back in 2005, the two women clicked like old friends. Over the course of several months, they had dinner, drove together to see homes listed for sale and swapped stories.

"In the beginning, we meshed. I felt like her only client," says Spruill, a federal examiner in her early 40s. "She was very attentive, very aggressive - she hustled in terms of finding listings. For a while, she did everything the right way."

But by the time Spruill closed on a three-bedroom, four-bath townhouse in Montgomery County - her first home purchase - the agent-client relationship had hit a rough patch over deposits, fees and commission. Spruill was most disappointed by her agent's seemingly close ties to one lender.

"It seemed like a conflict of interest," she says, looking back. "I went from thinking my agent was perfect to watching her like a hawk."

In a tight housing market, where every negotiation and interaction matters, etiquette and ethics do count, say experts, who advise buyers, agents and sellers alike to have working knowledge of the rules, both formal and informal, to alleviate misunderstandings and missteps that can cost time and money.

For instance, what's appropriate behavior when an agent works with a client? What pushes the boundaries of propriety? How much loyalty do sellers and buyers owe their agents? Can a buyer go to an open house without his agent?

Much depends on the contract, but between the lines is where confusion can lurk.

"As in all relationships, communication is the key," says Elizabeth Blakeslee, a veteran Realtor and regional vice president of the National Association of Realtors.

And the dialogue should start early on, she says, beginning with a discussion of how the agent-client relationship works and what contracts are involved.

Typically these agreements spell out basic responsibilities of both sides. For instance, they may note that the buyer or seller will work exclusively with the agent during the term of the agreement or that a buyer will not contact other agents directly or visit new homes without their agent.

The process involves fidelity, says Blakeslee.

"So a buyer who has an agreement with [someone] cannot jump from agent to agent during the home-search process," she says.

The agent has responsibilities as well: He or she agrees to locate and present property that is suitable for the buyer's needs; and assist throughout the process of acquisition, finance, etc.

Then there's the seller. The agent or broker has specific duties, which include marketing the property and finding a ready, willing and financially qualified buyer. Meanwhile, the responsibility of the seller is to allow the broker he signs with to act as his agent in negotiations and get his side successfully to closing.

As if all this isn't complex enough, rounding out the mix is the delicate dance of ethics and etiquette. For instance, sellers are advised to be cordial and welcoming to agents who call to arrange showings, says Blakeslee. But they also are expected to let their agents do the talking.

"Sellers need to know that they should not reveal all the circumstances of their situation to buyers or their agents, should they run into them during a showing," says Blakeslee. "We always recommend that sellers leave during showings."

For agents, etiquette requires that they schedule appointments in advance and call if they are running late or need to cancel. Realtors also are asked to extend "courtesy, trust and respect" to their peers.

NAR established its Code of Ethics in the early 1900s, and the system - with updates - has governed the conduct of real estate agents ever since. The code and the standards it covers run the gamut. They range from a Realtor pledge to protect and promote client interests to not volunteering information about the racial, religious or ethnic composition of a neighborhood.

"The Code of Ethics is required as part of the continuing education classes that Maryland requires every two years of all licensed real estate agents," says Bob Kimball, a Realtor with Long & Foster in Timonium, who teaches ethics seminars for the Greater Baltimore Board of Realtors and is also the group's treasurer. "Fifteen credits are needed to get one's license renewed, and three of the required credits must be in ethics."

In some parts of the country, agents can take the ethics courses online to satisfy the national requirements every four years, but that's not the case in Maryland, he adds.

During three-hour seminars, Kimball reviews the ethics code, screens a 30-minute video on the topic of predatory lending and uses case studies that simulate real-life situations. While the NAR ethics code doesn't specifically tackle etiquette, it is often part of the discussion. The group's professional-conduct arm has developed a list of professional courtesies that are voluntary.

"It's important that we police ourselves," says Kimball, "and raise the bar of professionalism."

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