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I have found some new construction homes I'm interested in. Apparently, in Conn you can not view a property for sale unless your represented buy an agent. In this case the builder is also a real estate agent. If he shows me the home(s) he then becomes my buyers agent (for these homes only) I also have to sign a contract to this effect.
This raises a good question in that isn't it illegal (or at the very least) unethical to represent both sides in a transaction? In this case the agent is representing the seller & the buyer.
Then again couldn't I negotiate the buyers commission in the transaction off of the sales price of the home?
For example, if the standard commission is 6% of which 3% goes to the buyers agent. If I don't have a buyers agent and the sales price is $200,000 I just saved the selling (agent) $6,000 which I can then take off of the sales price for a total of $194,000.
An agent I know wants to be my buyers agent and I presented the scenario above to him and he doesn't agree. He side steps the question and keeps saying the seller pays the commissions not you.
Despite what anyone says I believe the buyer always pays the commissions anyway. The commissions are built into the price.
It's the same thing with so called free delivery. The delivery is built into the price. Nothing in life is free except air + sun.
I'm finding the situation very frustrating as I feel that I can negotiate myself. I think an agents value is in finding comps + industry people like home inspectors or lawyers.
Apparently, in Conn. you can not view a property for sale unless you're represented by an agent. In this case the builder is also a real estate agent. If he shows me the home(s) he then becomes my buyers agent (for these homes only) I also have to sign a contract to this effect.
Absolutely not true. You will have to sign an Unrepresented Person (Buyer) disclosure though.
Quote:
Originally Posted by MrGompers
This raises a good question in that isn't it illegal (or at the very least) unethical to represent both sides in a transaction? In this case the agent is representing the seller & the buyer.
It's not illegal. However, both parties have to agree to dual agency. If one of the two parties doesn't agree, then it can't happen. NOTE: there are two types of dual agency - 1) same agent represents both parties (a/k/a dual agency/single licensee) and 2) same agency represents both parties (two different agents).
Quote:
Originally Posted by MrGompers
Then again couldn't I negotiate the buyers commission in the transaction off of the sales price of the home?
For example, if the standard commission is 6% of which 3% goes to the buyers agent. If I don't have a buyers agent and the sales price is $200,000 I just saved the selling (agent) $6,000 which I can then take off of the sales price for a total of $194,000.
No, if you as a buyer don't have an agent (or are Unrepresented), the listing agreement is still 6 percent which means the listing agent gets all 6 percent. A buyer can't negotiate (or re-negotiate) a condition to which (s)he is not a party. The commission is between the listing agent/cy and seller. Period. The listing agent/cy provides a co-broke percentage to buyer agents which can be a percentage, fixed amount, or variable (based on sales price).
Thanks for the replies. I was told by 2 different agents that I can not view homes for sale WITHOUT an agent.
The agent selling the homes flat out told me I can not view the homes without an agent. He further stated that if I still insist on viewing the homes he would have to be my agent and I would have to sign a contract agreeing to this before entering any homes.
The second agent I spoke too said the same thing just with different words. Since I've never bought real estate before I don't know much about the process. So far though, it feels just like buying a car, and sadly that is exactly what I expected. I was hoping to avoid agents altogether, but from what I can gather that isn't possible. (I would have to deal with the seller's agent at the minimum)
As for the agent representing both sides of the transaction (buyer + seller) it should be against the law. I don't see how that could ever be fair. Let's like asking the prosecutor to be the defendant's lawyer too.
I wish the internet would just put this industry out of business already.
As for my idea of negotiating the sellers commission it still seems possible to me. Because, the selling agent is also the builder. He already budgeted for that expense.
Thanks for the replies. I was told by 2 different agents that I can not view homes for sale WITHOUT an agent.
The agent selling the homes flat out told me I can not view the homes without an agent. He further stated that if I still insist on viewing the homes he would have to be my agent and I would have to sign a contract agreeing to this before entering any homes.
The second agent I spoke too said the same thing just with different words. Since I've never bought real estate before I don't know much about the process. So far though, it feels just like buying a car, and sadly that is exactly what I expected. I was hoping to avoid agents altogether, but from what I can gather that isn't possible. (I would have to deal with the seller's agent at the minimum)
As for the agent representing both sides of the transaction (buyer + seller) it should be against the law. I don't see how that could ever be fair. Let's like asking the prosecutor to be the defendant's lawyer too.
I wish the internet would just put this industry out of business already.
As for my idea of negotiating the sellers commission it still seems possible to me. Because, the selling agent is also the builder. He already budgeted for that expense.
You can absolutely view properties without representation. However, you can't view a property with an agent from another brokerage without a buyer agency agreement. So, if the property is listed by Joe's Realty and you want to see it without signing a buyer agency agreement, just call up an agent from Joe's Realty. You can't call up an agent from Bob's Realty and see that property without a buyer agency agreement.
With some new construction, especially the larger developments, the seller's brokerage requires buyers to register. If, at the time of registration, you're unrepresented/your agent isn't with you, you automatically opt out of using your own buyer's agent. You get to use theirs. Period. But this is only with new construction and not all new construction.
As far as the commission goes, that's up to the seller and the seller's brokerage. The agent may agree to give you a break on the commission to make the deal happen but it depends on their brokerage and their willingness.
From the agent's perspective, they are doing the work of both buyer and seller agent even if you go unrepresented. You may not think that there is much involved but between inspections, appraisals and mortgage complications, a lot can go wrong in a transaction that a realtor needs to stay on top of. And as a self-described newbie, I would think you'd want some assistance.
You're right - you are paying the agent's commission (just not out of your pocket) so why not get something out of it. Interview and hire your own buyer's agent.
You can absolutely view properties without representation. However, you can't view a property with an agent from another brokerage without a buyer agency agreement. So, if the property is listed by Joe's Realty and you want to see it without signing a buyer agency agreement, just call up an agent from Joe's Realty. You can't call up an agent from Bob's Realty and see that property without a buyer agency agreement.
With some new construction, especially the larger developments, the seller's brokerage requires buyers to register. If, at the time of registration, you're unrepresented/your agent isn't with you, you automatically opt out of using your own buyer's agent. You get to use theirs. Period. But this is only with new construction and not all new construction.
That describes my situation as I'm viewing new construction. That also sounds like what the 2 agents were telling me.
Quote:
Originally Posted by Jessica Beganski
As far as the commission goes, that's up to the seller and the seller's brokerage. The agent may agree to give you a break on the commission to make the deal happen but it depends on their brokerage and their willingness.
From the agent's perspective, they are doing the work of both buyer and seller agent even if you go unrepresented. You may not think that there is much involved but between inspections, appraisals and mortgage complications, a lot can go wrong in a transaction that a realtor needs to stay on top of. And as a self-described newbie, I would think you'd want some assistance.
You're right - you are paying the agent's commission (just not out of your pocket) so why not get something out of it. Interview and hire your own buyer's agent.
I do think agents can provide some value - just not as much value to a buyer. If I was selling a home I would certainly use an agent. Regardless, I have a buyers agent now and other than shuffling paper around I don't really see the value he provides. Maybe I'll be pleasantly surprised though when he submits my first offer on a property.
As I said before though the buyer is always paying the commission (it's just reflected in the price) and I'm afraid every bid I place is going to be $6000 short (which would be the buying agents commission) In my eyes if I didn't have a buyers agent I could have negotiated that half of the commission off the price right away.
This is the same concept with cars. When you buy a car there are dealer hold backs and dealer incentives that the public usually doesn't know about. But, if you do know about them and how much they are you negotiate that right away off the price. Add back 3-500 dollars for dealer profit and close the deal. I've done this before more than once with cars. Don't see why it would be any different with real estate.
I have to open this thread again as I'm running into the same issue again.
To recap I am being told by a listing agent that I CANNOT view a house for sale without an agent. He told me if I don't have a buyer's agent. I can sign a contract with him which would make him my buyer's agent. He also said the only way I can view this house for sale without an agent is during an open house.
Now unless I'm missing some details here or am misunderstanding something I don't see how this is even legal. Assuming I am right, is there a state agency or real estate oversight body where I can lodge a complaint?
This has happened to me 3 times now with different listing agents. I am aware they can ask a person to sign a form like an "unrepresented buyer" disclosure. However, these agents are not saying that. They are flat out asking for me to sign a contract that would make them my "buyers agent" One guy even told me the contract (if I signed) would be valid for a year and cover any other properties I may buy.
It's disappointing that the industry works like this. I've never bought real estate before, but this is just like buying a car.
Try contacting the Connecticut Department of Consumer Protection with this question. They license real estate brokers and may be able to help you. I have heard of people that sign an agreement with a broker for just showing that one home and not to any home you see. If they are not willing to do that, they are not representing their client very well. Jay
You can absolutely view properties without having an agent represent you. Ask for an Unrepresented Buyer's disclosure form from the listing agent. They must present that to you. If they say they can't do that, the CT Department of Consumer Protection is where you log complaints.
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