Working without a buyer's agent (commission, contract, Realtors, agreement)

[jacob]

I am planning to put in an offer on a house I like.

What are the things I need to be careful about on the offer ? What I can think of is :
a) Using the standard 1-4 family residential contract form for putting in the offer.
b) Put about $3000 as earnest money
c) Ask for about 20-30 days for closing after the acceptance of offer. (The house is empty right now)
anything else ?
d) Ask for 7 days buyer's option to terminate the contract for $100 option fee.

anything else ?

What are the next steps that I need to work on. The ones I can think of are :
a) Finding a good inspector for inspection. May be also get a separate termite and structural inspection.
b) Work with a mortgage banker/broker.

Is that all ? Or am I simplifying things too much.

[Apple Annie]

Will the seller's agent represent both of you in a dual agency situation? If not, then I would take the purchase and sales agreement to your attorney for a look-see. Remember: every single contingency must have an expiration date. You can't let these things drag on open-ended. So there is an urgency in getting these things done; and, the seller can retain the right to keep showing the property during this time in most states.

First and foremost: present your lender's prequalification letter to the seller for that property price and mortgage amount.

Home inspection by: X date. Report and satisfaction in writing by: X date
and so forth.

A home inspection should include wood boring insects, structural of course, and a radon and mold inspection depending on where you are located.

In some states you are allowed a "cost of repair contingency", which means that if the buyer's inspection reveals costs of necessary repairs exceed $ _____.00, that the buyer has the option to terminate the agreement if the seller refuses repairs over X amount, or ... the buyer has the option to renegotiate the sale price to take into consideration necessary structural repairs. This is not a "wear and tear" situation, but applies to something major found that exceeds the cost of repair contingency and has to be proven. The seller also has the right to get his own inspection.

e.g. You have a cost of repair contingency at $2,500. That means you are willing to pay an additional $2,500 over the agreed upon sale price for the repairs. If the repairs exceed that amount, buyer and seller are agreeing that the seller pays the excess. Be careful that the cost of repair contingency is not superseded by or becomes part of the purchase and sale agreement. Your lawyer can explain that.

It's only a can of worms if the house is a fixer and you are needing protection.

A buyer's agent knows how to protect you. Your attorney is the ultimate watchdog. So go with what you are comfortable with.

Everyone act in good faith, and you'll be fine.

[businessperson]

You don't have an agent? Who's going to hold your earnest money deposit? How will you go about getting it back it the deal falls through? How did you determine a fair offer price? Did you research recent sales in the surrounding area? How will you decide what repairs are needed and who will pay for them? Will the seller pay for the CL-100? Did you get a Property Disclosure Statement from the seller?

[jacob]

This is a recently (2003) built house in a neighbourhood where I have atleast 10 other families I know. So first of all, I dont think there would be too many issues. House seems to be OK to me.

Secondly, earnest money, the seller's agent can hold, right ? or not ?

Thirdly, option fee - $100 - i pay to seller's agent, i guess, which I get back if offer is rejected ?

This is listed by Keller Williams, so I assume they dont do such shady dealings of not giving my earnest money back.

I am trying to get an idea of a fair market price. I don't understand how having an agent is going to help me anyways. He has more incentive in getting the deal done, so would push me to pay a higher price.

[Apple Annie]

Originally Posted by jacob

This is a recently (2003) built house in a neighbourhood where I have atleast 10 other families I know. So first of all, I dont think there would be too many issues. House seems to be OK to me.

Secondly, earnest money, the seller's agent can hold, right ? or not ?

Thirdly, option fee - $100 - i pay to seller's agent, i guess, which I get back if offer is rejected ?

This is listed by Keller Williams, so I assume they dont do such shady dealings of not giving my earnest money back.

I am trying to get an idea of a fair market price. I don't understand how having an agent is going to help me anyways. He has more incentive in getting the deal done, so would push me to pay a higher price.

We don't know what state you are in Jacob. I have a broker's license in 3 states, but that has no bearing on where you are.

First, let me try to explain. A buyer's agent has no incentive to get you to pay a higher price. The commission gets split up so many ways that no agent is going to compromise his integrity or reputation for maybe as little as 1.5% of what, another $5,000, if that? For $75.00 ? No way. A buyer's agent will get you the comparable prices and do a CMA for you. Neighbors may not know the actual selling/closing price and most neighbors who are not Realtors are guided by rumor. Not a dependable source of fair market value.

However, you do not need to let the seller's agent hold your escrow money unless that is the law in your state. Have your attorney hold the escrow money and give you advice. We as brokers on here cannot give you legal advice no matter where you are. We can only guide you to a good decision.

I have no idea what the $100 option money is for and cannot comment on that. If you don't want a buyer's agent, you are wide open if you don't have an attorney.

Go with your best instincts and get some legal advice. Let us know how it goes. Let me say that there are very few unethical Realtors out there.

You wouldn't pull your own tooth, or take out your own appendix would you?

In the biggest financial transaction of your life, do it right please.

[jacob]

ok, here comes a question of law / ethics.

I have seen 2 houses using one agent. But I dont like her. She is pushing me to buy a house without telling me much about it.

After that, I saw some more houses using another agent.

Now, two of my friends have recommended their agents.

One said - this guy is very good, he is with remax, and had a good inspection contact, etc
Another friend referred another agent, saying this guy is also good plus he gives 1% towards closing costs.

So I have 4 options now. Or find someone totally new. Or go by myself.
I have already talked to the seller's agent that I dont have an agent, and I will go myself, and the price that I am looking at.

What do i do now ? Who do I go with ? mom, socketz, anybody else what do you suggest ?

[WendyK]

I would go with the referral of one of your friend's recommended agents. If they've already gone through a transaction with them, then they know how well you'll be taken care of. Meet them both and see who you have the best rapport with. Let the agent you choose handle the presenyation of the offer to the seller and listing agent. And I agree with Annie that you need to have your financing lined up before making the offer. There are so many more steps to buying a home than just the price...You'll see as you go through the process all the kinks that come out of nowhere and you'll be glad to have your own agent to handle the surprises.

[sunsprit]

no offense intended, jacob ... but your questions about this intended transaction indicate a profound level of ignorance about a real estate purchase.

While I may share your concerns about the cost/value ratio of bringing in another person (buyer's agent), the simple fact is if you're looking at a property listed by an agent at a brokerage, you already will be (indirectly) paying the full sales commission.

In net effect, there is no "savings" to be had in your deal at this point by not obtaining the services of a real estate professional to represent you.

The only way you can "save" ... and the agents on this forum will dispute that there even is a "savings" ... is to have a clean deal on a property where the parties deal directly with each other and use their lawyers as needed to assure that the contract and details are correctly and safely performed.

So, until you are a "seasoned" real estate buyer and know what the process is all about so you can safely act on your own behalf, please ... Get an agent that you're comfortable with to represent you at this time.

[Apple Annie]

Jacob has posed these questions under different topic names on this forum, and has said he did not buy the intended property after all; that he has bought another. Unless he intends to yet buy another property, it seems like the threads are moot; and further discussion is unnecessary at this point.

All of the Realtors on each thread that Jacob has posted has answered and assisted him to the best of our ability with excellent advice. With regard to "law and ethics" questions, these are areas which are out of the realm of our expertise.

An attorney should be consulted, that is imperative; and an attorney's fee would be well worth the small amount required.

Realtors are held to high standard of ethics which prohibits giving information to Jacob as requested, for the same reason he doesn't care for Realtors. We are a hard-working ethical and law abiding professional group.

We also make the decision and have the right to fire a buyer when the relationship is not compatible and we feell there is mistrust and misleading by the prospective buyer. Not every buyer is a gem.

There are so many nice buyers out there that need and appreciate our expertise and assistance, and realize that we are their allies, not their adversaries. They are the jewels of our business, and we cater to them.

[momof2dfw]

GET AN AGENT!!! Jacob, if your the same person that is posting under the Dallas, TX thread here is some advice, while some have mentioned getting an attorney there is not much an attorney can do to change the legal contract for residential properties in Texas. An attorney can not just go thru and mark out things they don't like, they will try this (I have corporate attorneys that we use and I've seen it). The residential contract has been written up and approved by a board of lawyers for the state real estate board to make sure that all bases are covered and everyone is protected equally. To go in and change it to benefit one party over the other will surely get it thrown out and possibly make it unacceptable on many levels. Don't open yourself up to a lawsuit.

The house your looking at putting a contract on you said is listed w/ Keller Williams. The North Dallas office of Keller-Williams has over 100 agents surely you can find one in that office you can work with. If you'd like I'll look on their website and see what names I know and have worked with.

Your new to the area and are having doubts about which home to buy, the floorplans, location, builders, etc. and now the right price to offer. YOU NEED AN AGENT! A good agent will know ALL of these things and save you a lot of time, headaches and possibly sorrow if you should make an offer that is too low and lose the best house or make an offer that is too high and end up w/ a lemon.