Are the marketing claims made by realtors saying they will buy your home if it doesn’t sell legal?
Many real estate lawyer New York, NY home sellers trust may tell you that the answer to this question is extremely complex. There are many nuances to the various practices with which the realtors who market these guarantees use to skirt the fine line between legality and illegality. Agreements to sell your home within a certain number of days followed up by the promise to buy your home at an agreed-to price if it doesn’t sell are relatively new in the industry. Every state has its own laws that govern the fiduciary duty of realtors and that only adds to the confusion; this confusion works in the favor of the realtors who make these claims.
Advocates of Guarantees Say It’s a Win-Win
On the surface, these offers sound quite favorable, but the result is that should the deal go through, you will be selling your home to a realtor for around 70 percent of its value. That’s because there are conditions built into these agreements that ensure the price is incrementally reduced by a set percentage within a set period before it is sold to the realtor. Advocates of this practice claim there are cases where buyers are motivated to sell as soon as possible, and that motivation in some cases is much greater than ensuring a favorable final sale price. Proponents argue that selling a home at 70 percent of its full value (including double-commissions for the realtor) and potentially walking away with money in their pockets is a much better option than defaulting on their mortgage; they argue that it’s a win-win.
Opponents Say Guarantees Get in the Way of a Realtor’s Fiduciary Duty
The National Association of Realtors does not take a position on guaranteed sales, but critics claim it is a conflict of interest for the agent. The real estate lawyer New York, NY relies on to protect them in these situations tends to agree that these guarantees are designed to mislead consumers and that they incentivize realtors to price the house below its value and provide lackluster service in getting it sold. Real estate agents or brokers acting as an agent for a buyer or seller in a transaction are legally mandated to provide certain fiduciary duties in the client’s best interest. Opponents argue that a realtor’s fiduciary duty to the seller is to get the highest price possible which is in complete opposition to buying it at a discount. A dual-agent situation, in which the same agent represents buyer and seller makes it impossible to provide the “reasonable care” duty, but in the experience of Okun, Oddo & Babat, P.C., a real estate lawyer New York, NY trusts in these cases, these are often only fully defined in court when it is already too late for the seller to change their actions.
An Experienced Real Estate Lawyer in New York, NY Knows the Questions to Ask
While New York requires a disclosure form for buyer and seller that describes the different agent types, include the dangers of dual agency, sellers often breeze through this paperwork as just another of many documents to sign. Because selling your home could be the biggest transaction you will ever make, it is a smart decision to have a real estate lawyer New York, NY trusts to review all paperwork and discuss your options before you sign. In the case of a guaranteed sale contract, a New York real estate lawyer will know the right questions to ask before you sign, such as asking for proof of funds and terms of payment. You need to know exactly what is being offered before you accept the realtor’s offer. Will you still be happy you sold your house at 70 percent of its value if your realtor invests a few thousand into the property and sells it at your original listing price?
Call Okun, Oddo & Babat, P.C. Today for a Free Consultation
Over the years, we have seen the laws that govern real estate agency and fiduciary duties slowly erode and as real estate representation continues to evolve, we are seeing more court cases every year. The real estate lawyers at Okun, Oddo & Babat, P.C. know the state laws that govern these types of cases. For a free consultation, call the real estate lawyer New York, NY relies on as their trusted fiduciary at 212-642-0950.