Does Your Los Angeles Real Estate Agent Have Your Best Interests in Mind?

When buying or selling Los Angeles real estate with a real estate agent, one of the first forms that California requires to be signed is a “Disclosure Regarding Real Estate Agency Relationship”. This form is basically just an explanation of the different types of agency relationships that a buyer or seller can have with their real estate agent.

Many buyers and sellers do not, however, understand what this important disclosure means or how it affects their real estate transaction. The purpose of this tip sheet is to explain the differences and similarities between the three real estate agency relationships -- Seller’s Agent, Buyer’s Agent, and Dual Agency.

But first, it is necessary to define what an agency relationship even is and how it relates to Los Angeles real estate.

In 1988, California became the first state to pass laws that explicitly defined real estate agency relationships. The concept of “agency” is one of the most important when it comes to real estate. What these laws of agency basically say is that real estate agent has a fiduciary responsibility to their client. This in turn means that the agent must always act in the best financial interest of their client.

Today, all real estate agents licensed by California are governed by these laws of agency. The three types of agency, as outlined by Californian law, are (1) Seller’s Agent, (2) Buyer’s Agent, and (3) Dual Agency.

Seller’s Agent Most of those with Los Angeles homes for sale are represented by a Seller’s Agent. According to California law, the Seller’s Agent is obligated to have “a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller.”

The Seller’s Agent must always act in the financial interest of the seller. In general, this means negotiating the highest possible sale price a home. Consequently, the agent must not provide any information to the buyer that might be disadvantageous to the seller’s interest. Likewise, if the buyer provides any pertinent information to the Seller’s Agent, the agent will likely pass it on to the seller. Therefore, the buyer should tread carefully when speaking with a Seller’s Agent.

Buyer’s Agent When searching through the Los Angeles homes for sale, it really helps to be represented by a Buyer’s Agent. Like the Seller’s Agent, the Buyer’s Agent is obligated by California law to have “a fiduciary duty of utmost care, integrity, honesty, and loyalty,” but when “in dealings with the Buyer.”

The Buyer’s Agent must always act in the financial interest of the buyer. Generally speaking, this means negotiating the lowest possible sale price for a home. In the same way that the Seller’s Agent must be careful with their client’s information, the Buyer’s Agent must act in the financial interest of the buyer. Therefore, sellers should not let important information slip when communicating with the Buyer’s Agent.

Dual Agency Of all the Los Angeles real estate agency relationships, Dual Agency is easily the most controversial. Dual Agency is when a real estate agent -- meaning, either a real estate firm or an individual --represents both the buyer and the seller. In this case, the agent is still obligated to have a “fiduciary duty of utmost care, integrity, honesty and loyalty,” but when “in the dealings with either the Seller or the Buyer.”

This is obviously a fine line to walk, because the Dual Agent cannot reveal any information that would give an unfair advantage to either the buyer or seller. Some argue that this balance is essentially impossible to maintain. Others claim that a talented Dual Agent can speed up the process while mediating a fair compromise between the buyer and seller.

While some states have outlawed Dual Agency, it remains to be seen how this controversy will ultimately play out in California.

Los Angeles Real Estate Update, September 2012

The Los Angeles real estate market has shifted considerably over the last 12 – 18 months. A major reduction in inventory has turned L.A. into a sellers’ market, where properties sell quickly and often for the full asking price.
Home prices are still in the red when measured annually, but improvements can be seen month to month. The same goes for condo prices.
Here are the latest numbers coming out of the L.A. real estate market.

Condo and Home Prices are Up, Monthly

The latest release of the S&P/Case-Shiller Home Price Index was published on August 28. It included data through the end of June 2012. According to the report, L.A. real estate prices are improving at the monthly level. Prices rose by 2.2% from April to May, and 1.7% from May to June of this year.
While the annual numbers are still negative, they also seem to be improving. This time last year, the year-over-year price change was -3.4%. In May of this year, the annual return was slightly better at -2.0%. In June, the annual return improved again to -0.6%.
The next Case-Shiller report will be released on September 25, and will contain data through July of this year. Based on recent trends within the Los Angeles real estate market, we will likely see a positive annual return in L.A. home prices — for the first time in months.
Bear in mind the Case-Shiller report is limited by a two-month lag. More recent data shows positive price trends, even when measured annually. Trulia’s website, for example, shows a year-over-year improvement in the median sale price for this metro area. Additionally, a recent report by real-estate data provider DataQuick shows a 3.1% increase in the median price, from July 2011 to July 2012.
Condo prices in L.A. have mirrored home-price trends, for the most part. Both indicators are still negative when measured year over year (using the Case-Shiller numbers), with positive gains in the more recent months. Condo prices rose each month from March to June, reaching late-2003 level.
The Los Angeles condo market has fallen 40% from its July 2006 peak. Despite the recent monthly gains, condo prices will probably never reach that peak level again. Nor should we expect them to. What’s noteworthy here are the monthly gains and the increasing stability of the market as a whole.

Fewer Homes for Sale, Year Over Year

The number of homes for sale in the L.A. metro area has declined sharply over the last year or so. According to Realtor.com, the total number of listings dropped by 29% from July 2011 to July of this year. This allows homeowners to set — and justify — higher asking prices when listing their homes. The median list price for this market rose 6.43% during the one-year period mentioned above.
Currently, real estate conditions in Los Angeles appear to favor the seller over the buyer. In fact, this metro area was recently ranked as one of the top ten sellers’ markets in the United States. In July, the real-estate information company Zillow ranked the top buyers’ and sellers’ markets in the U.S. The comparison group included 50 of the largest metro areas in the country. According to that report, Los Angeles was the #8 sellers’ market in the country. This means homes are selling fast, and often for the full list price.
The median age of inventory for the L.A. metro area dropped by nearly 10% over the last year, according to Realtor.com. This comes as no surprise, given the reduction in inventory and other market conditions.

The L.A. Real Estate Market in 2013

The Los Angeles housing market will likely strengthen in 2013, but improvements will be modest. The weak job market will continue to limit demand for housing. The unemployment rate in L.A. neared 12% in July, according to the Labor Department. That’s well above the July national average of 8.3%.
Low mortgage rates will continue to attract buyers. The benchmark 30-year mortgage rate is expected to hover below 4% through at least the first quarter of next year (disclaimer below). This, combined with the prospect of rising home prices, will pull many home buyers off the fence and into the market.
Inventory will be a primary driver of the L.A. real estate market, well into 2013. If the number of homes for sale continues to drop, as it has since last summer, we could see a modest but consistent rise in home prices. Time will tell.

Disclaimers: This story contains forward-looking statements about the Los Angeles housing market, home prices, and other economic factors. These statements were made based on current market conditions, and these conditions may change over time.
This information has been provided for educational use only and does not constitute a guarantee about future economic conditions. Please do not make any financial decisions based solely on this report. We encourage all home buyers to seek the assistance of an experience real estate agent.


Full article: http://www.homebuyinginstitute.com/news/los-angeles-update-264/#ixzz28GvWGGGr

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LA REAL ESTATE ADVICE: Southern California real estate gets a boost in May with more Homes Sold for Higher Prices

Published June 13, 2012

Southern California's real estate market got its buying season bump in May with home sales increasing more than 20 percent and the median price hitting a 20-month high, a market tracker said Wednesday. 

Sales increased in all six Southern California counties, according to San Diego-based DataQuick.

"The market is being slowly nursed back to health by low interest rates, a modestly improved economy and, we suspect, a widening sense that the housing sector is at or near bottom," DataQuick President John Walsh said in a statement. 

Last month home sales increased 20.6 percent to 22,192 properties from 18,394 a year ago. DataQuick's count includes new and previously owned houses and condominiums. Los Angeles County did even better, with sales jumping 25.3 percent to 7,496 properties from 5,983 a year ago.

Sales have now increased on a year-over-year basis for five consecutive months with last month's gain the biggest, DataQuick said. 

May's regional median price increased 5.4 percent to $295,000 from $280,000 a year ago. It was up 1.7 percent from $290,000 in April, DataQuick said. 

Last month's median was the highest since $295,500 in September 2010. The year-over-year gain in the May followed a 3.6 percent annual increase in April. Before then, the median had fallen year-over-year for 13 straight months. 

DataQuick attributed the price increase to higher demand, a drop in the number of distressed property sales and more sales in the higher-cost coastal markets. 

Last month sales in San Diego, Orange, Los Angeles and Ventura counties represented about 70 percent of all sales, up from 67.6 percent a year ago. 

The higher end is finally getting some action, too. Last month sales between $300,000 and $800,000 - a range that would include many move-up buyers - jumped 23.1 percent year-over-year. And sales over $800,000 rose 11.8 percent from May 2011. 

The report showed that in May:

The median price in Los Angeles slipped 1.6 percent to $315,000 from $320,000 a year earlier

Sales in Ventura County soared 43.3 percent to 993 from 693 a year ago. The median price fell slightly to $360,000 from $360,500. 

In San Bernardino County, sales increased 16.3 percent to 2,702 from 2,323 a year ago. The median price rose 5.7 percent to $158,500 from $150,000 a year earlier. 

Distressed sales - the combination of foreclosure resales and short sales - made up 44.8 percent of last month's resale market. That was the lowest level since the figure was 44.4 percent in March 2008.

Investor and cash-only home purchases remain near record levels. 

Absentee buyers - mostly investors and some second-home purchasers - bought 27 percent of the homes sold in May. That's down from 28.4 percent in April but up from 25.1 percent a year earlier.

Buyers paying with cash accounted for 31.3 percent of May home sales, down from 32.2 percent the month before and up from 29.2 percent a year earlier. 

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is much lower than peak levels reached in recent years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick said.

It all adds up to a market still on the mend. 

"There's still plenty of uncertainty swirling around out there," Walsh said. 

greg.wilcox@dailynews.com
818-713-3743
twitter.com/dngregwilcox

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