On July 1, amendments to the Virginia Code went into effect that essentially clarify further new laws relating to buyer agency in Virginia. Most consumers are not fully aware of the intricacies of agency law, but real estate agents have been schooled on it regularly to keep up with changes. Buyers and sellers know that typically speaking they can choose to hire a real estate brokerage firm to represent them in either the sale, purchase or rental of a property. While this remains true, these new amendments aim to make clearer who is representing whom.
What many consumers may not know is that in 1997, the Commonwealth passed a law that established “buyer agency” or an exclusive agreement between the buyer and a real estate brokerage firm in the form of a contract. Before that time, de facto, all realtors represented the seller. In Virginia, an oral agreement is binding but not enforceable. Only the written contract can be enforced in a court of law. In the past, when a buyer and agent agreed to meet at a property to view it, there was an implicit understanding that the agent was helping the buyer and if they wanted to make the agreement more formal, they could sign an exclusive buyer agency agreement. Prior to July 1, some buyers may have never signed a piece of paper until they decided they wanted to make an offer on a property.
That custom has been changed. A new law has gone a step further and now requires that, before an agent steps through the front door of any property, the relationship between the brokerage and the buyer is clearly understood by all parties. In other words, before you can view that property, the agent is now required to offer you exclusive representation, limited agency, or non-representation. You, as the buyer, will not be required to sign anything, but the agent is now required to ask you to sign something, unless the property is that agent’s listing.
The most definite and strongest relationship is the exclusive right to represent a buyer agreement. Limited agency or an independent contractor is when the buyer doesn’t want the agent to represent or offer opinions, and only wants an agent to show them properties and write up the offers. In that case, the agent would not offer guidance or advice, or put together a comparative market analysis. Thirdly, if the buyer only wants to view properties and wants no representation at all, then the buyer would be asked to sign a disclosure. This would state that the agent is not representing the buyer and that the buyer is aware that the rights and responsibilities of “agency” do not apply.
Sometimes buyers like to use the agent who represents the seller of a property to represent them as well, creating a situation called dual agency. The new amendment to the law has expanded the disclosure for dual agency that explains that if buyers and sellers agree to use an agent to handle both sides of the transaction, the agent can no longer advise or give counsel to either party. The agent plays the role of communicator between the two parties and is not allowed to negotiate on behalf of either side.
For further clarification, an explanation of the Virginia Code can be found at the NVAR website.
All this means is that as you consider whether to buy real estate in Virginia, you can be better informed when deciding what kind of relationship you want with a realtor. By making the consumers’ choices more apparent, this law affords buyers more clarity in their choices for real estate services. Your realtor can be your advisor providing professional advice, counsel and maintaining confidentiality. Or you can choose some assistance or none at all.
October Sales and Statistics for 22309
As the Fall market winds to a close, the October numbers reflect healthy sales activity in the zip code, but a real lack of inventory. Overall sold volume is up 16 percent from last month and 22 percent from October of 2011. New listings are up by 21 percent closed sales are up nearly 39 percent from last October and the median sold price of $290,000 is up 28 percent from last year. Another positive sign that the market may be turning slightly in favor of sellers is that the average days on market for the zip code has fallen to 34 days. That’s an 81 percent drop from October of 2011 and represents a 5 year average low. Additionally, October saw an increase in the ratio of average sales price to original list price of 3 percent. Sellers are getting on average 95.7 percent of their original list price in 2012.
This is good news for sellers but challenging for buyers. In most cases, the reduction in the days on market in this area is reflected in sales of condos and townhomes. Throughout this year when I have had clients looking for homes in the $425,000 and below category, we have entered bidding wars. This is especially the case in the condo market, where investors and other all cash buyers are prevalent and buyers have to act fast to put together very attractive offers. Fortunately, I am not seeing offers where home inspections are being waived like many buyers did in the early 2000s during the real estate boom. Those mistakes are not being repeated.
The most significant change in 22309 is with the inventory. Last October there were 124 active listings on the market. This year there are only 95. Buyers are having trouble finding homes. In fact, this is the lowest October inventory of active listings in the last five years. The peak in the last five years was in June of 2008 when there were 356 homes on the market in this zip code area. Buyers are clearly taking advantage of the low interest rates. Also, the majority of the buyers at this point in time are using conventional loans, paying cash or utilizing VA loans.
The majority of sales in October were detached homes having four or more bedrooms with an average sold price of $615,075, a 40 percent increase from last October and a 68 percent increase from last month. Condos followed with an average sold price of $134,929, a 24.34% increase from 2011.
2012 has proven to be a positive time for the 22309 real estate market in general. Some strengthening in average prices, shorter days on market and low inventory show the market slowly shifting in favor of sellers. With the tightening of bank regulations, buyers have to come to the negotiating table with more cash in hand and excellent credit. Sellers should be able to breath a little more easily knowing that the buyers are so well qualified. However, this means that today’s buyers are savvy and want a top quality product for their hard earned money. Unless you’re planning to sell your property as a fixer upper or in as-is condition, sellers will need to invest in their homes to make their property attractive to these buyers. Property condition, location and price are the holy “trinity” for real estate. If these three aspects aren’t in balance, a property can be doomed to sit on the market and not sell.