Welcome back to my website and our discussions regarding Canadian real estate buyers in Phoenix and Scottsdale Arizona. In our last posting we talked about the great diversity of housing options in the Valley of the Sun (the Greater Phoenix Metropolitan Area) and we explained what FIRPTA is. Firpta is the Foreign Investment in Real Property Tax Act and if you missed the last post, you can click HERE to get caught up.
If you would be interested in looking at the past 10 years of exchange rate history between Canada and the US, expressed in Canadian Dollars, click the link below.
Today I would like to explain the concept of Agency. It is very important that Canadians understand this concept as it is the best protection they can have when buying real estate in Arizona.
In Arizona, an Agency is created between a real estate agent and a client when it is understood that the client is relying on that particular agent to assist them in the buying or selling of real property. This may seem rather obvious but there are important obligations within the agency relationship that you, as a Canadian buyer, should understand and then be able to expect.
In many states real estate transactions are handled quite differently than in Arizona. In other states the realtor may just show the properties and then a lawyer must be brought in to create the contract and other ancillary documents pertinent to the transaction. This is not the case in Arizona. Real estate agents and brokers in Arizona receive extensive training in real estate law and contract writing and are empowered to write the contracts and are responsible for producing all relevant documentation necessary to close a transaction.
So, let’s look at a particular agency relationship in Arizona that we will call a “listing” agency. This agency is established when a seller of property hires a particular agent to represent his interest and get the real estate sold. The agent in this relationship has a fiduciary responsibility to the seller of the property. The seller is the agent’s client and the agent owes loyalty and the highest standard of care to that seller.
I wanted to address this agency first and foremost because many Canadians have told me that they have heard that if you just work with the listing agent, you will get a better deal.
I think this belief was perpetuated in the heady days of converting apartment complexes into Condominium communities and holding informational seminars up north wherein Canadians were encouraged to just use the developer’s sales force to buy their new condo.
The real reason buyers were encouraged to do this was because the developer didn’t really want to pay sales commissions to outside agents, would retain greater control over the sales process, and, quite frankly, could make more money.
I actually represented condo buyers during that time and never knew of a better deal being had because the buyer was using the developer’s sales folks. In fact, in many cases we were able to secure a better deal by negotiating all appliances and seller-paid closing costs for our buyers.
When you, as a buyer, come to Arizona, you want an agent to have YOUR best interests as his or her highest obligation. If you hire an agent as your representative in purchasing real estate in Arizona you will accomplish this.
Where a listing agent owes a significant number of specific responsibilities to the seller, foremost being fiduciary, their obligation to you as a buyer is simply “honesty” in the transaction. This does not mean or imply that you will necessarily get a better price or the best deal.
The best part of being represented as a buyer in Arizona is that it costs you nothing. Commissions in residential transactions are paid by the seller. The seller’s agent enters into an agreement with the owner of the property called an “Exclusive Right To Sell.” In the body of this agreement a commission is agreed to and documented and it is understood that part of that commission will belong to the listing agent and the rest will be given to the buyer’s agent. If there is no agent representing the buyer, then the seller’s agent may keep both sides of the commission.
Perhaps this is another reason that Canadians have told me about getting a better deal if they only use the listing agent. Listing agents on the condo complexes have been telling them this for years. Listing agents can make more money if you just use them but will they necessarily get you, or will they get their seller, the BEST deal?
My recommendation to you, as a Canadian buyer, is to hire a competent agent as your buyer’s representative. This assures you of a partner in the process who has a loyalty and fiduciary responsibility to your best interests.
I have worked with many Canadian clients over the years, primarily out of Alberta. My husband was born in Toronto and grew up in Alberta and although he’s been down here a fairly long time, still has family in Canada that keep us in touch with the priorities and concerns of our neighbors to the north.
Call me with confidence if you are in need of assistance and, feel free to use this site to search for homes. This site is directly connected to our MLS service so you will find listings in real time, not old or stale or already sold. To get a better flavor of the area, you might want to click on the “What’s New?” link at the top of the page and scroll through some of the articles.
After a number of searches you will be asked to sign in and I would recommend that you do. I will not be harassing you as a result. I may send you an email thanking you for your visit. I just like to see who is using my site and it helps me understand my business better.
For more information on Homes For Sale In Phoenix or Scottsdale or to coordinate searching with professional representation, feel free to contact me at 602-579-3393. I was born and raised in the Scottsdale and Phoenix area and would be delighted to assist you in discovering if your perfect next home might be located here.
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