When you buy a house, or even a banana, you are supposed to do this: due diligence. How “diligent” you are lowers your risk in the purchase, and determining what is “due” forms the list of questions that need to be answered. In the case of a banana, your due diligence is simple – if fruit flies are circling, you’ll pass. For a real estate investment, conducting thorough due diligence using trusted experts is a must. Even then, there are always things that can be missed. But, the large items – the roof, HVAC systems, etc. – should be looked at carefully.
Buyers of real estate are empowered by the internet’s ability to view properties in great detail, and this has enhanced if not replaced the real estate agent for the purpose of finding properties to consider, especially in the current social-distancing environment. They often call the listing agent directly to ask questions and schedule showings, which is their right. But, it is a mistake to assume a buyer’s best interests are equally well served by the listing agent whose loyalty is exclusive to the seller.
In 2005, the Maine Real Estate Commission introduced “buyer agency”, a way for buyers to be professionally represented with an exclusive buyer agency agreement. This service is free and levels the playing field between buyer and seller in the process of buying real estate. The seller pays a “co-broke” fee to the buyer’s agent, and for that fee, the buyer agent is duty-bound (with a signed buyer agreement) to keep all information confidential, explain contracts, disclosures, review buying options, and pitfalls and advocate for the buyer’s best interests.