SUMMERLIN EAST APARTMENTS 24 UNITS | FAYETTEVILLE, NC

OFFERING MEMORANDUM TABLE OF CONTENTS

PROPERTY OVERVIEW 3 PROPERTY WEBSITE Detailed property information can be found at: SummerlinEast.com 5 PROPERTY PHOTOS PROPERTY TOURS FLOOR PLANS In an effort to keep all parties safe during COVID-19, tours will be 10 scheduled upon request.

13 INVESTMENT SUMMARY OFFER SUBMISSION Submit offers via email to: [email protected] 16 SALES & RENT COMPARABLES Offers should be in the form of a Letter of Intent (LOI) and at a minimum include: Price, Earnest Money, Due Diligence Time Period, Contingencies, Closing Period, and each party’s rights and responsibilities, accompanied with previous multifamily 20 MARKET OVERVIEW ownership experience.

FINANCIAL ANALYSIS 25 BROKERAGE TEAM

29 NC DISCLOSURE Shem Nelson | Associate Broker Brett Grubbs | Vice President 910.748.5414 910.765.8654 [email protected] [email protected] 30 CONTACT US PROPERTY OVERVIEW 1969 Summerlin East offers spacious brick apartments in a prime location with easy access to and the main dining, YEAR BUILT shopping and entertainment thoroughfare of Raeford and Skibo roads. This Opportunity Zone property is a stabilized 1969 asset with a value-add opportunity.​ The parking lot has been resealed and the roof on all buildings were replaced in 2016.​ Units are being renovated as tenants turn.​ The property is currently being rented below market rents and comparable properties show rent increases of at least $50 per unit are possible. 24 UNITS

96% OCCUPANCY

$585 1043-1053 Rulnick St. UNIT & COMMUNITY FEATURES Address AVG. RENT Fayetteville, NC

HIGH SPEED INTERNET ACCESS # of Units 24 WASHER/DRYER HOOKUP Number of Buildings 6 SMOKE-FREE 700 SF OVEN Unit Mix 24 - 1 BR/1 BA AVG. UNIT SIZE REFRIGERATOR Neighborhood Lake Francis/Drake Park WATER INCLUDED TRASH REMOVAL INCLUDED Pet Policy No pets allowed GREAT FAYETTEVILLE LOCATION $0.84 Parking 30 Spaces; 1.3 per Unit AVG. RENT/ SF LAND PARCEL PROPERTY PHOTOS EXTERIOR

5 SUMMERLIN EAST / SUMMERLINEAST.COM PROPERTY PHOTOS EXTERIOR

6 SUMMERLIN EAST / SUMMERLINEAST.COM PROPERTY PHOTOS INTERIOR

7 SUMMERLIN EAST / SUMMERLINEAST.COM PROPERTY PHOTOS INTERIOR

8 SUMMERLIN EAST / SUMMERLINEAST.COM PROPERTY PHOTOS INTERIOR

9 SUMMERLIN EAST / SUMMERLINEAST.COM PROPERTY PHOTOS UTILITIES

10 SUMMERLIN EAST / SUMMERLINEAST.COM FLOOR PLAN 3D FLOOR PLAN

12 SUMMERLIN EAST / SUMMERLINEAST.COM INVESTMENT SUMMARY

13 SUMMERLIN EAST / SUMMERLINEAST.COM INVESTMENT SUMMARY

ORGANIC RENT GROWTH OPPORTUNITY

Located in the heart of Fayetteville, Summerlin East has undergone upgrades of both exterior and select interior units. With these and further renovations, these apartment homes can grow rents organically. Recent Interior Improvements in select units: Recent Exterior Improvements: • LVP flooring • New screen doors and windows • New appliances • New roof on all buildings in 2016 • Ceiling fans • AC units are serviced annually (9 units replaced in 2020) • New refrigerators in 2 units • Driveway sealed & parking lines repainted • New water heaters in 3 units • Repairs to leaking pipes between the main water supply and units Library

VALUE-ADD OPPORTUNITY

Take advantage of this Opportunity Zone property and expand upon the current value-add program by completing updates on all units. These improvements can yield an additional $50 rent premium increase per unit, which nearby properties are achieving.

Additional value-add opportunities include: • Offer all-inclusive water/electric for additional rent premiums • Privacy dividers between back patios • Washer/dryer rental with installation and removal fees • Parking lot crack repair • Localized trash can storage • Interior painting & carpeting

PROXIMITY TO ECONOMIC DRIVERS

Summerlin East Apartments is located in Fayetteville, NC, a thriving community located in the Sandhills region of southeastern and is the seat of Cumberland County. Raleigh, the state’s capital, is approximately 65 miles north of Fayetteville, and Charlotte, a major commercial center, is about 140 miles to the west of the city. Fayetteville is located adjacent to Interstate Highway 95, a major north-south corridor that links the city to Washington D.C., Baltimore and New York to the north, and to Charleston, Orlando and Miami to the south. The property is located minutes from the largest employers in the area such as Fort Bragg, Cape Fear Valley Health System and Cumberland County Schools.

14 KIRKWOOD PLACE / KIRKWOODPLACE.NET 14 SUMMERLIN EAST / SUMMERLINEAST.COM LOCATION OVERVIEW

CROSS CREEK MALL FORT BRAGG (9 miles)

Fayetteville Academy

Library Cliffdale Recreation FREEDOM TOWN CENTER Center Gus’s Bait & Tackle

Kids R Tuff Day Care

Anne Chesnutt Village Baptist Preschool Middle School

Highland Animal Hospital

Fayetteville Police Dept. Nail salon

Caliber Collision Triangle Rock Club SUMMERLIN EAST William Owen Elementary School

AIRPORT (9 miles)

15 SUMMERLIN EAST / SUMMERLINEAST.COM SALES & RENTAL COMPARABLES

16 SUMMERLIN EAST / SUMMERLINEAST.COM SALES COMPARABLES

PROPERTY OF UNITS YOC# SALE DATE PURCHASE PRICE PRICE/UNIT CAP RATE

Kingsley Townes 37 2012 Feb-19 $2,500,000 $67,568 6.50% 788 Arthington St, Fayetteville, NC

Hill Street Apartments 18 2008 Oct-19 $1,240,000 $68,889 6.89% 3304 Kenmont Ln, Hope Mills, NC

Morganton Crest 50 1992 Oct-20 $3,450,000 $69,000 7.30% 208 Partners Way, Fayetteville, NC

Ashton Fayetteville 100 1984 Jan-20 $7,300,000 $73,000 5.00% 2927 Gordon Way, Fayetteville, NC

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2 17 SUMMERLIN EAST / SUMMERLINEAST.COM RENTAL COMPARABLES

1 BR PROPERTY # OF UNITS ADDRESS YOC AVG UNIT SF RENT/SF $/UNIT AVG 1043-1053 Rulnick St. Summerlin East 24 1969 700 $585 $0.84  Fayetteville, NC

812-830 Pilot Ave. Pilot Avenue 12 1970 650 $589 $0.91 Fayetteville, NC

6541 Raeford Rd. Southwood Apartments 16 1984 800 $629 $0.79 Fayetteville, NC

605 S. Reilly Rd. Highlander Place 28 2001 715 $652 $0.91 Fayetteville, NC

801-915 Applewood Ln Meadow Pointe Apartments 56 1982 790 $716 $1.08 Fayetteville, NC

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18 SUMMERLIN EAST / SUMMERLINEAST.COM RENTAL COMPARABLES

PILOT AVENUE SOUTHWOOD HIGHLANDER MEADOW POINTE 812-830 Pilot Ave. APARTMENTS PLACE APARTMENTS Fayetteville, NC 6541 Raeford Rd. 605 S. Reilly Rd. 801-915 Applewood Ln Fayetteville, NC Fayetteville, NC Fayetteville, NC YOC 1970 YOC 1984 YOC 2001 YOC 1982 Occupancy 100% Occupancy 87% Occupancy 100% Occupancy 100% # of Units 12 # of Units 16 # of Units 28 # of Units 56 Sweetwater Property Management Wellington Advisors Management Arran Realty Inc Management Self-managed Management Management Rental Rates & Unit Mix Summary Rental Rates & Unit Mix Summary Rental Rates & Unit Mix Summary Rental Rates & Unit Mix Summary 4 - 1 BR 8 - 1 BR 28 - 1 BR Unit Mix Unit Mix Unit Mix 28 - 1 BR Unit Mix 8 - 2 BR 8 - 2 BR 28 - 2 BR Avg. SF 819 Avg. SF 900 Avg. SF 715 Avg. SF 790 Avg. Rent $720 Avg. Rent $639 Avg. Rent $650 Avg. Rent $767 Avg. Rent/SF $0.88 Avg. Rent/SF $0.71 Avg. Rent/SF $0.91 Avg. Rent/SF $0.97 Unit Amenities Unit Amenities Unit Amenities Unit Amenities Air Conditioning Cable Ready Air Conditioning Washer/Dryer Air Conditioning Kitchen Refrigerator Kitchen Oven Hardwood Floors Microwave Balcony Oven Property Manager on Site Cable Ready Wheelchair Range Picnic Area Cable Ready Lake Access Tub/Shower Refrigerator Accessible Refrigerator Recycling Kitchen (Rooms) Range Dishwasher Laundry Facilities Dishwasher High Speed Walking/Biking Internet Access Trails

19 SUMMERLIN EAST / SUMMERLINEAST.COM MARKET OVERVIEW

20 SUMMERLIN EAST / SUMMERLINEAST.COM MARKET OVERVIEW

Nicknamed the “All American City,” Fayetteville is seat of Cumberland County, and $35M capital project that includes a new concert hall, tennis center, is located in southeast North Carolina 50 miles south of Raleigh and 120 miles field house and facilities for soccer and football. east of Charlotte. Traversed by I-95 and the Cape Fear River, the Fayetteville MSA The local Fayetteville State University campus serves over 6,300 students. encompasses Cumberland and Hoke counties. A $45.5M campus construction and renovation is currently underway to Anchored by Fort Bragg, the U.S. Army’s largest military installation, Cumberland accommodate increasing enrollment numbers. County offers a diverse and expanding business environment. Downtown Fayetteville is a focal point of the local business community, where the city’s 20- year, $118M downtown redevelopment plan has included numerous projects: Bragg Boulevard Corridor, Festival Park, the Transportation Museum and streetscape improvements. Other improvement projects have included the Arts & Entertainment District, the Franklin Street parking deck, the Hope VI project, NC Veterans Park and the 300 Block of Hay Street housing project. EDUCATION Highly Ranked Public Schools Cumberland County Schools is the 5th largest school system in the state. It operates 87 schools with an additional 14 private schools in the county. Along with traditional classrooms, Cumberland County Schools offers one year-round school, an evening academy and a web academy. Students have access to STEM programs in biological and biomedical studies, computer and informational services and mathematics & statistics. In 2013, Cumberland County Schools was a Broad Prize Finalist as one of the “Most Improved Schools Districts” and by AdvancedED Accreditation as a “Quality School System.” Readily Available Higher Education Fayetteville Technical Community College (FTCC), the 4th largest community college in the state, serves more than 42,000 students annually through its 190+ programs. In 2017, FTCC ranked 4th in the nation for digital education services by the Center for Digital Education. A new FTCC veterans center was recently opened to better serve their 3,000 veteran enrollees. Methodist University, is a private college with 2,300 students, is one of the fastest growing institutions in the Southeast. This university has proposed a

21 SUMMERLIN EAST / SUMMERLINEAST.COM MARKET OVERVIEW

MAJOR ECONOMIC INFLUENCE: FORT BRAGG MAJOR ECONOMIC GROWTH & Encompassing over 160,000 acres in northwest Fayetteville, Fort Bragg is home to the ANNOUNCEMENTS 82nd Airborne Division, Special Operations Command, Forces Command and Reserve The Goodyear Tire & Rubber plant in Fayetteville is one of the largest tire Command. The base employs roughly 15,500 civilians, had an annual payroll of $3.5B · manufacturing plants in the world. The 2.2M SF facility is run by 2,500 employees and an annual economic impact estimated at $13B. There are 52,000 active duty, 12,500 reserve and temporary duty members, along with 99,000 military retirees residing in the and produces about 38,000 tires daily. surrounding area, plus 63,000 family members. · Butterball, LLC is expanding its Hoke County operations with plans to invest $66.8M From 2000 to 2015, Cumberland County was the recipient of $2.4B in defense contracts. and create 367 jobs over the next three years. Either of the ten top American defense contractors operate in the area, including Lockhead · Cape Fear Valley Health Center is investing $30M into a residency program that Martin, Boeing and Northrop Grumman. could have a major economic impact on Cumberland County, creating upwards of 300 In March 2017, the Trump Administration released the initial defense budget, which jobs in the area. includes planning for an increase in defense spending upwards of $54B. This anticipated growth in national defense expenditures contains substantial additions to military base · Tampa-based Sykes Enterprises’ Fayetteville operations will be merged into their new funding through 2020, which has spurred new economic activity for Fort Bragg and the $12.2M call center, the company’s first in North Carolina. Sykes employs nearly 700 surrounding area. people locally. · Tyton BioEnergy Systems is investing $36M in Hoke County, adding 80 MAJOR ECONOMIC INFLUENCE: manufacturing jobs at North Carolina’s only commercial-scale ethanol refinery. CAPE FEAR VALLEY HEALTH SYSTEM · The new $40M, 1.45M SF Rooms to Go distribution and retail center along I-95 (24 The Cape Fear Valley Health System serves six counties and more than one million miles from Fayetteville) is expected to employ about 225 jobs. patients annually. Ranked North Carolina’s 9th largest health system, Cape Fear Valley Health System has a total of 765 beds, employs more than 5,000 across its numerous · Sanderson Farms, Inc. is constructing a new $139M processing plant and hatchery facilities. in neighboring Robeson County. The company plans to hire 1,100 employees over the The new state-of-the-art Health Pavilion Hoke and the new Hoke Hospital represent a next three years and have an expected payroll of $28M. $100M investment and the creation of 350 jobs.

22 SUMMERLIN EAST / SUMMERLINEAST.COM MARKET OVERVIEW

TRANSPORTATION Fayetteville and Cumberland County are traversed by Interstate 95, positioning the area within an 8-hour drive of two-thirds of the nation’s population and close to the East Coast’s largest ports. The ports of Wilmington, Morehead City and Charleston are just hours away. Class 1 commercial rail services are provided by Norfolk Southern and CSX;

Greensboro regional rail lines include Aberdeen, Carolina and Western. The Fayetteville Regional Airport (FAY) is serviced by Delta, United and US Airways/American Airlines and can accommodate cargo jet traffic. Fayetteville is home to Amtrak passenger rail services and local transit system SUMMERLIN EAST (FAST). The Fayetteville Area System Transit opened a new $12.6M facility in 2017, which operates in conjunction with MegaBus and Greyhound. The I-295 Fayetteville Outer Loop Project stretches 39 miles around the city. The first phase of construction, which connects Ramsey Street to the All American Freeway, was completed in 2016. The second phase, connecting Cliffdale Road (from the south) and the All American Freeway (to the north) was completed in 2019.

MAJOR CITIES ACTIVITIES & ATTRACTIONS CITY DISTANCE The successful implementation of Fayetteville’s downtown revitalization projects introduced several new attractions, such as Raleigh, NC 64 miles the North Carolina Veterans Park, the Airborne & Special Operations Museum, the Fayetteville Area Transportation Museum and Fayetteville Festival Park. The $40M Segra Stadium mixed use project opened for its first event in April 2019. In addition to being Wilmington, NC 98 miles the home of baseball team, the , Segra Stadium will accommodate outdoor concerts, Greensboro, NC 99 miles corporate gatherings and festivals. The Major League team, Houston Astros, signed a 30-year agreement to host the city’s class Charlotte, NC 124 miles A-Advanced minor league team. The Crown Center Complex consists of the , home to the Southern Professional Hockey League’s 2007 Champions MAJOR AIRPORTS the Fayetteville Marksmen (previously the FireAnts), seats up to 10,880. The complex has 20,000 SF of exhibit space, 60,000 AIRPORT DISTANCE SF Crown Expo Center, 9,200 SF ballroom and hospitality center, the 2,400 seat Crown Theatre and 4,500 seat Crown Arena. Fayetteville Regional Airport 9 miles Cumberland County has 66 sites listing on the National Register of Historic Places, including eight historic districts and seven Raleigh-Durham Int. Airport 84 miles sites on the NC Civil War Trails. Wilmington Int. Airport 99 miles The region offers more than 750 miles of themed driving trails and a variety of hiking, cycling and walking trails. The Lower Little River offers canoeing, kayaking and fishing. Ten area golf courses include Keith Hills Country Club, which Golf Digest designated Piedmont Triad International Airport 109 miles as one of the “Top 100 Values in the U.S.”

23 SUMMERLIN EAST / SUMMERLINEAST.COM MARKET OVERVIEW

WORKFORCE WITH PROVEN EMPLOYER INDUSTRY PERFORMANCE EMPLOYMENT

Fayetteville,,N.C. County Civilian Labor Force 128,161 Total Military (Active & Reserve) 52,340 Private Industry Employment 82,303 Department of Defense 14,157 Average Weekly Wage $687 Cape Fear Valley Health Systems 7,100 Median Working Age 29.9 Cumberland County Schools 6,800 Population within a Walmart Associates Inc. 3,400 595,000 45 minute drive Goodyear Tire and Rubber Inc. 2,500 Unemployment Rate 5.5% Cumberland County 2,450 Median Household Income City of Fayetteville 1,760 $46,716 (2018 value) Veterans Administration 1,500 Health Care Most Common Employment & Social Fayetteville Technical Community Sector 1,350 Assistance College

24 SUMMERLIN EAST / SUMMERLINEAST.COM FINANCIAL ANALYSIS

25 SUMMERLIN EAST / SUMMERLINEAST.COM FINANCIALS

APRIL 2021 APRIL 2021 APRIL 2021 Year 1 T12 Income / T12 Expense T6 Income / T12 Expense T3 Income / T12 Expense Pro Forma

INCOME Total Per Unit Per Month Total Per Unit Per Month Total Per Unit Per Month Total Per Unit Per Month Market Rent 166,580 6,941 13,882 168,400 7,017 14,033 169,920 7,080 14,160 168,480 7,020 14,040

Upgraded Premium ------3,744 156 312

Gain (Loss) to Lease (1,122) (47) (94) (1,465) (61) (122) (2,377) (99) (198) - - -

TOTAL GROSS POTENTIAL 165,458 6,894 13,788 166,935 6,956 13,911 167,543 6,981 13,962 172,224 7,176 14,352 Vacancy Loss (9,795) (408) (816) (16,160) (673) (1,347) (2,260) (94) (188) (8,611) (359) (718)

Concessions ------

Model/Employee Unit ------

Bad Debt (9,194) (383) (766) (5,511) (230) (459) (11,174) (466) (931) (1,722) (72) (144)

NET RENTAL INCOME 146,468 6,103 12,206 145,265 6,053 12,105 154,109 6,421 12,842 161,891 6,745 13,491 Other Income 2,595 108 216 1,996 83 166 1,331 55 111 3,444 144 287

Utility Reimbursement ------

EFFECTIVE GROSS INCOME 149,063 6,211 12,422 147,260 6,136 12,272 155,440 6,477 12,953 165,335 6,889 13,778 EXPENSES Total Per Unit Per Month Total Per Unit Per Month Total Per Unit Per Month Total Per Unit Per Month Repairs & Maintenance 8,972 374 748 8,972 374 748 8,972 374 748 8,400 350 700 Turnover/Make-Ready ------Salaries and Payroll ------General & Admin ------Marketing ------Contract Services 10,368 432 864 10,368 432 864 10,368 432 864 10,800 450 900 Utilities 9,118 380 760 9,118 380 760 9,118 380 760 9,118 380 760 Management Fee 15,023 626 1,252 15,023 626 1,252 15,023 626 1,252 11,573 482 964 Insurance 12,633 526 1,053 12,633 526 1,053 12,633 526 1,053 12,600 525 1,050 Real Estate Taxes 8,755 365 730 8,755 365 730 8,755 365 730 8,930 372 744

TOTAL EXPENSES 64,870 2,703 5,406 64,870 2,703 5,406 64,870 2,703 5,406 61,421 2,559 5,118 NET OPERATING INCOME 84,194 3,508 7,016 82,390 3,433 6,866 90,570 3,774 7,548 103,914 4,330 8,659

26 SUMMERLIN EAST / SUMMERLINEAST.COM PRO FORMA

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 INCOME: Schedule Market Rent 168,480 178,900 187,272 191,017 194,838 198,735 202,709 Upgrade Premium 3,744 2,546 - - - - - Total Market Rent 172,224 181,446 187,272 191,017 194,838 198,735 202,709 Gain/(Loss) to Lease ------Total Gross Potential 172,224 181,446 187,272 191,017 194,838 198,735 202,709 Vacancy Loss (8,611) (9,072) (9,364) (9,551) (9,742) (9,937) (10,135) Concessions ------Model/Employee Concessions ------Bad Debt (1,722) (907) (468) (478) (487) (497) (507) Net Rental Income 161,891 171,466 177,440 180,989 184,609 188,301 192,067 Other Income 3,444 3,513 3,584 3,655 3,728 3,803 3,879 Utility Reimbursement ------Total Operating Income 165,335 174,980 181,024 184,644 188,337 192,104 195,946 EXPENSES: Repairs & Maintenance 8,400 8,484 8,569 8,655 8,741 8,828 8,917 Turnover/Make-Ready ------Salaries and Payroll ------General & Admin ------Marketing ------Contract Services 10,800 10,908 11,017 11,127 11,239 11,351 11,464 Utilities 9,118 9,209 9,301 9,394 9,488 9,583 9,679 Management Fee 11,573 12,249 12,672 12,925 13,184 13,447 13,716 Insurance 12,600 12,600 12,600 12,600 12,600 12,600 12,600 Real Estate Taxes 8,930 9,108 9,291 9,476 14,137 14,420 14,708 TOTAL EXPENSES: 61,421 62,558 63,449 64,177 69,388 70,229 71,084 NET OPERATING INCOME 103,914 112,422 117,575 120,467 118,949 121,875 124,862 Capital Reserves 7,200 7,200 7,200 7,200 7,200 7,200 7,200 ECONOMIC NET OPERATING INCOME 96,714 105,222 110,375 113,267 111,749 114,675 117,662

27 SUMMERLIN EAST / SUMMERLINEAST.COM UNDERWRITING ASSUMPTIONS

1 Market Rent 12 Salaries & Payroll The market rent of $168,480 or $14,040 per month, is based on the current market rent The pro forma assumes payroll is encompassed by management fee. shown on the rent roll dated April 30, 2021. 13 General & Admin 2 Upgraded Premium The pro forma assumes none. The pro forma projects $3,744 Year 1 premium. 14 Marketing 3 Gain (Loss) to Lease The pro forma assumes none. The pro forma assumes none. 15 Contractor Services 4 Vacancy Loss Contractor service expenses are assumed to be $450 per unit. The pro forma projects vacancy equivalent to 5.00% of the Gross Potential Rent. 16 Utilities 5 Concessions The pro forma assumes none. The pro forma assumes none.

6 Model/Employee Concessions 17 Management Fee The pro forma assumes none. Management fee is assumed to be 7.00% of Effective Gross Income which is consistent with industry norms for an asset of this vintage and quality. 7 Bad Debt The pro forma projects 1.00% of Gross Potential Rent. 18 Insurance The pro forma assumes a per unit insurance expense of $525. 8 Other Income All other income line items in pro forma are projected to be 2.00% of 19 Real Estate Taxes Gross Potential Rent. The pro forma estimates taxes to be $8,930 in year 1.

9 Utility Reimbursement 20 Capital Reserves The pro forma assumes none. Capital Reserves expenses are projected to be $300 per unit.

10 Repairs & Maintenance Repairs & maintenance expenses are projected to be $350 per unit, which is consistent with market averages for an asset of this quality and vintage In the market.

11 Turnover/Make-Ready The pro forma assumes none.

28 SUMMERLIN EAST / SUMMERLINEAST.COM NC DISCLOSURE The North Carolina Real Estate Commission, www.ncrec.gov

Working with Real Estate Agents Buyer’s Agent When buying or selling real estate, you may find it helpful to have a real estate agent assist you. Real estate agents can Duties to Buyer: If the real estate firm and its agent represent you, they must: promote your best interests; be loyal to you; provide many useful services and work with you in different ways. In some real estate transactions, the agents work for follow your lawful instructions; provide you with all material facts that could influence your decisions; use reasonable skills, the seller. In others, the seller and buyer may each have agents. And sometimes the same agents work for both the buyer care and diligence; and account for all monies they handle for you. Once you have agreed (either orally or in writing) for and the seller. It is important for you to know whether an agent is representing you as your agent or simply assisting you the firm and its agents to be your buyer's agent, they may not give any confidential information about you to sellers or their while acting as an agent of the other party. agents without your permission so long as they represent you. But until you make this agreement with your buyer’s agent, you should avoid telling the agent anything you would not want a seller to know. This brochure address the various types of agency relationships that may be available to you. It should help you decide which relationship you want to have with a real estate agent. It will also give you useful information about the various Unwritten Agreements: To make sure that you and the real estate firm have a clear understanding of what your relationship services real estate agents can provide buyers and sellers, and it will help explain how real estate agents are paid. will be and what the firm will do for you, you may want to have a written agreement. However, some firms may be willing to represent you and assist you for a time as a buyer’s agent without a written agreement. But if you decide to make an offer to SELLERS purchase a particular property, the agent must obtain a written agency agreement before writing the offer. If you do not sign Seller’s Agent it, the agent can no longer represent and assist you and is no longer required to keep information about you confidential. If you are selling real estate, you may want to “list” your property for sale with a real estate firm. If so, you will sign a Be sure to read and understand any agency agreement before you sign it. Once you sign it, the agent must give you a copy “listing agreement” authorizing the firm and its agents to represent you in your dealings with buyers are you seller’s agent. of it. You may also be asked to allow agents from other firms to help find a buyer for your property. Services and Compensation: Whether you have a written agreement or unwritten agreement, a buyer's agent will perform Be sure to read and understand the listing agreement before you sign it. Your agent must give you a copy of the listing a number of services for you. There may include helping you: find a suitable property; arrange financing; learn more about agreement after you sign it. the property; and otherwise promote your best interests. If you have a written agency agreement, the agent can also help Duties to Seller: The listing firm and its agents must: promote your best interests; be loyal to you; follow your lawful you prepare and submit a written offer to the seller. instructions; provide you with material facts that could influence your decisions; use reasonable skill, care and diligence; A buyer's agent can be compensated in different ways. For example, you can pay the agent out of your own pocket. Or and account for all monies they handle for you. Once you have signed the listing agreement, the firm and its agents may the agent may seek compensation from the seller or listing agent first, but require you to pay if the listing agent refuses. not give any confidential information about you to prospective buyers or their agents without your permission so long Whatever the case, be sure your compensation arrangement with your buyer’s agent is spelled out in a buyer agency as they represent you. But until you sign the listing agreement, you should avoid telling the listing agent anything you would not agreement before you make an offer to purchase property and that you carefully read and understand the compensation want a buyer to know. provision. Services and Compensation: To help you sell your property, the listing firm and its agents will offer to perform a number Dual Agent: You may permit an agent or firm to represent you and the seller at the same time. This “dual agency relationship” of services for you. These may include: helping you price your property; advertising and marketing your property; giving is most likely to happen if you become interested in a property listed with your buyer’s agent or the agent’s firm. If this you all required property disclosure forms for you to complete; negotiating for you the best possible price and terms; occurs and you have not already agreed to a dual agency relationship in your (written or oral) buyer agency agreement, your reviewing all written offers with you; and otherwise promoting your interests. buyer's agent will ask you to amend the buyer agency agreement or sign a separate agreement or document permitting him For representing you and helping you sell your property, you will pay the listing firm a sales commission or fee. The listing or her to act as agent for both you and the seller. It may be difficult to for a dual agent to advance the interests of both the agreement must state the amount or method for determining the sales commission or fee and whether you will allow the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes firm to share its commission with agents representing the buyer. them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Dual Agent: You may even permit the listing firm and its agents to represent you and a buyer at the same time. This “dual Some firms also offer a form of dual agency called “designated dual agency” where one agent in the firm represents the agency relationship” is most likely to happen if an agent with your listing firm is working as a buyer’s agent with someone seller and another agent represents the buyer. This option (when available) may allow each “designated agent” to more who wants to purchase your property. If this occurs and you have not already agreed to a dual agency relationship in your fully represent each party. listing agreement, your listing agent will ask you to amend your listing agreement to permit the agent to act as agent for both you and the buyer. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between parties with competing interests, it is especially important that you have a clear understanding of what your relationship is with the dual agent and It may be difficult for a dual agent to advance the interests of both buyer and seller. Nevertheless, a dual agent must treat what the agent will be doing for you in the transaction. This can be accomplished by putting the arrangement in writing at buyers and sellers fairly and equally. Although dual agent owes them the same duties, buyers and sellers can prohibit the earliest possible time. dual agents from divulging certain confidential information about them to the other party. Some firms also offer a form of dual agency called “designated agency” where one agent in the firm represents the Seller’s Agent Working With a Buyer seller and another agent represent the buyer. This option (when available) may allow each “designated agent” to more If the real estate agent or firm that you contact does not offer buyer agency or you do not want them to act as your buyer fully represent each party. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided agent, you can still work with the firm and its agents. However, they will be acting as the seller's agent (or “sub agent”). between parties with competing interests, it is especially important that you have a clear understanding of what your The agent can still help you find and purchase property and provide many of the same services as a buyer's agent. The relationship is with the dual agent and what the agent will be doing for you in the transaction. agent must be fair with you and provide with any “materials facts” (such as a leaky roof) about properties. BUYERS But remember, the agent represents the seller - not you - and therefore must try to obtain for the seller the best possible price and terms for the seller’s property. Furthermore, a seller's agent is required to give the seller any information about When buying real estate, you may have several choices as to how you want a real estate firm and its agents to work with you (even personal, financial or confidential information) that would help the seller in the sale of his or her property. Agents you. For example, you may want them to represent only you (as a buyer’s agent). You may be willing for them to represent must tell you in writing if they are seller's agents before you say anything that can help the seller. But until you are sure that both you and the seller at the same time (as a dual agent). Or you may agree to let them represent only the seller (seller’s an agent is not a seller’s agent, you should avoid saying anything you do not want a seller to know. agent or sub agent). Some agents will offer you a choice of these services. Others may not. Seller's agents are compensated by the sellers. 29 SUMMERLIN EAST / SUMMERLINEAST.COM Shem Nelson Brett Grubbs Associate Broker Vice President [email protected] [email protected] 910.748.5414 910.765.8654