Purchasing a home with no agent (investment, mortgage, lawyer, contract)

[Rakin]

Buyers pay for all commissions. They pay for the seller's agent and the buyer's agent through the sales price -- whether they have their own buyer's agent or not; that's my point. If the buyer opts not to be represented, then in most cases they are still paying for the buyer's side too.

Common misconception.

Don't tell the sellers in todays market that buyers are paying the commissions when their home is selling at or way below their costs of the house. Even in normal times, in markets like TX the inflation rate of homes may take 3-4 years before the seller can make enough to cover their closing costs.

[MikeJaquish]

Originally Posted by Austin-Willy

If you find a problem and bring it to your principal's attention and the sale doesn't close, you may feel like you've earned your pay, but under a traditional rep. agreement, you won't receive any money. The commission system creates an inherent conflict of interest in that way. I am glad that you are able to overcome it. Many other agents are not.

People who worship money have a hard time avoiding conflict, or a hard time believing that there is integrity in the world. The commission system creates nothing. People create their own reality.
I want to be paid, but I want to be paid for a job well done.

Originally Posted by Austin-Willy

Would you be willing to share with us your rep. agreement where you assume these investigative / discovery responsibilities? If you miss something along these lines, does your principal have any recourse? Or are these things simply services that you think should be provided by an agent, but which you aren't under any real obligation to provide?

I do not assume these responsibilities. I commit to pressing myself well beyond the typical agent in discovery. My "obligation" is to myself for peace of mind, and my client benefits from that. Why have a client throw away option or inspection money, and put earnest money at risk, because easily observable deficiencies are ignored, and the role of discovery deferred to an expensive group of paid inspectors, attorneys, surveyors, etc?

I will paw through underbrush to search for a UST filler pipe. I have found several. Often a deal-breaker. Why should a client spend $1100 or more on an environmental assessment to find an easily visible tank filler?
I have been on roofs, and under houses. On fixers, I tell my clients what I see, what I think the repair may be, and defer to the fact that a good inspector has a better focus and may find more or minimize the issue to less than my assessment.
I'm not perfect, and in the standard Buyer agreement there is language that disclaims that I am not an attorney, surveyor, inspector, etc, and says that the client should hire licensed professionals for their input.
But if I see legal issues, or structural issues, or title issues, I note them and recommend that the client speak with an attorney or other professional regarding those items, and associated problems.
Again, I am not perfect. I just don't hide a lifetime of accumulated knowledge from my clients out of fear of liability.

Originally Posted by Austin-Willy

If my listing agent combed through title documents and other "buyer" due diligence items and pointed out potential issues to the buyer, he would quickly be cut out of the transaction. There are very limited items that must be disclosed to a buyer, at least in Texas. If a listing agent goes beyond that, he is not representing his principal well. I am surprised to read that a listing agent would think it is his role to look out for the interest of the buyer.

The qualifying term is, "...at least in Texas..." as so often happens on these boards.
One state's misstep may be another state's mandate.
One issue that arises regularly on these boards is the lack of recognition that blindly grasping the elephant's tail does not make the elephant a rope.

I could be in real trouble for knowlingly concealing material issues from any party to the real estate transaction in North Carolina, regardless of which principal I represented.
NC Real Estate Law and the NC Real Estate Commission are clear on that.
North Carolina General Statute 93A-6(a)(1)
Four types of facts that must be disclosed to any party to the transaction, as noted in the NC Real Estate Manual from the NC Real Estate Commission:
1. Facts about the property itself.
2. Facts that relate directly to the property.
3. Facts that relate directly to the ability of a principal to complete the transaction.
4. Facts that are known to be of special interest to a party.

Those four items create the opportunity for a very LONG list of possible material facts, and the Listing Agent must disclose if the Seller does not.
"Negligent Omission" is mentioned in connection with not disclosing "to all parties material facts relating to a property about which the agent 'reasonably should have known.'"

[Rakin]

Mike J, The Texas Disclosure is lacking and only about 3 vague pages. Our company uses one developed by our attorney that's about 7 pages, very extensive and designed to protect the seller and mentioned earlier.

Most TX brokers have adopted something similar and very few use the state disclosure.

[MikeJaquish]

Originally Posted by Rakin

Mike J, The Texas Disclosure is lacking and only about 3 vague pages. Our company uses one developed by our attorney that's about 7 pages, very extensive and designed to protect the seller and mentioned earlier.

Most TX brokers have adopted something similar and very few use the state disclosure.

Rakin,
If the Seller doesn't disclose and the Listing Agent knows, the Listing Agent needs to disclose in NC.
Our NC Residential Property Disclosure statement is vague also, and allows "No Representatin."
In just one page of rules, and a single page of disclosure.

[Austin-Willy]

Originally Posted by MikeJaquish

I could be in real trouble for knowlingly concealing material issues from any party to the real estate transaction in North Carolina, regardless of which principal I represented.

In your haste to make your point about differences in state law, you failed to notice that none of the differences you mentioned change the fact that I didn't say anything about knowingly concealing issues. My comment was about the degree that a seller's agent should investigate in order to learn about material issues.

Originally Posted by MikeJaquish

"Negligent Omission" is mentioned in connection with not disclosing "to all parties material facts relating to a property about which the agent 'reasonably should have known.'"

Clearly it would not be unreasonable for an agent to be unaware of most, if not all, of the examples that have been mentioned. If it takes an agent crawling under a house, or digging through shrubbery, or reviewing all of the title documents... it is not reasonable to expect a seller's agent to do that. If I'm a seller, I don't want to hire an agent who will take it upon themselves to go above and beyond what is required by law in such a way that it could disrupt the transaction. I want someone who is on my side, and if you are doing the buyer's due diligence for them, you are not working for me. I hope you make it clear to your sellers that you will parlay your lifetime of accumulated knowledge to try to root out anything that would give the buyer a reason to find a different property.

[Austin-Willy]

Originally Posted by Rakin

Mike J, The Texas Disclosure is lacking and only about 3 vague pages. Our company uses one developed by our attorney that's about 7 pages, very extensive and designed to protect the seller and mentioned earlier.

Most TX brokers have adopted something similar and very few use the state disclosure.

If you tried to push that expanded disclosure form on me as a buyer, you would get it back crumpled in a ball. The TREC form is a safehaven. If you use it, and you are honest in completing it, then you have complied with your disclosure requirements. You claim that the expanded form is used to protect the seller, but it is clear that you don't understand the legal effect of the state-promulgated form.

[scgraham]

"Because when I go in unrepresented, I talk to the listing agent and let them know that I'm only interested if they are willing to accept a 3% commission, that way I can market my offer to the seller as the equivalent, from their viewpoint, of an offer that is 3% higher. It's really quite simple. And if the agent balks, I go straight to the seller."

Austin - You're free to handle your own affairs; I wish the best in all your endeavors.

To those who might consider interfering with the listing agent's contract with the seller, I would suggest reading up on "tortious interference". Here's more information from Realty Times. In summary, if a third party interferes with a legal contract (listing agreement), there might be consequences. The listing agreement is between the seller & listing agent only, not the buyer. I would suggest consulting with an attorney who specializes in tortious interference before attempting to try this. While this person may have done it without consequences, that doesn't mean there aren't potentially any. The buyer can make any offer they want on price & terms, but to suggest that the listing agent should cut their agreed upon fee with the seller might be a problem. I would definitely consult with an attorney.

Don't be loose with the details.

Best To All!

[MikeJaquish]

Originally Posted by Austin-Willy

In your haste to make your point about differences in state law, you failed to notice that none of the differences you mentioned change the fact that I didn't say anything about knowingly concealing issues. My comment was about the degree that a seller's agent should investigate in order to learn about material issues.



Clearly it would not be unreasonable for an agent to be unaware of most, if not all, of the examples that have been mentioned. If it takes an agent crawling under a house, or digging through shrubbery, or reviewing all of the title documents... it is not reasonable to expect a seller's agent to do that. If I'm a seller, I don't want to hire an agent who will take it upon themselves to go above and beyond what is required by law in such a way that it could disrupt the transaction. I want someone who is on my side, and if you are doing the buyer's due diligence for them, you are not working for me. I hope you make it clear to your sellers that you will parlay your lifetime of accumulated knowledge to try to root out anything that would give the buyer a reason to find a different property.

Must a murder in a home to be listed be disclosed by the LA?

Must an unsolved murder that took place in a home to be listed be disclosed by the LA?

Suppose a property which cannot be conveyed because all those with an interest, who must sign the deed, cannot be located or even accuately counted. Should that be disclosed? Who should know that the property can or cannot be conveyed? At what time in the listing or sales process?

Divorce, and wife has given a quit-claim deed. Can it be listed for and sold by the husband? Who should ask? Listing Agent or Buyer?

Can a land-locked property be conveyed? Can it be listed on the MLS? Should a lack of access to the property be disclosed? Who should confirm the status of access, and at what point in the Listing/transaction?

These are questions that need to be reasonably investigated and answered by the Listing Agent prior to brokering the property, or noted as unclear, with notification that the Buyer may have some extra due diligence.
Listing a property without reasonable disclosure may make the agent or Seller liable for wasted costs of due diligence.

That you would prefer an agent who would proactively avoid familiarity with the property being listed, may well disqualify me or any other ethical agent from working for you in North Carolina.

No big thing. There is someone for everyone.
People who proactively seek and engage unethical professional service, and decry the state of the industry when they get burned, are all around us.

[Rakin]

Originally Posted by Austin-Willy

If you tried to push that expanded disclosure form on me as a buyer, you would get it back crumpled in a ball. The TREC form is a safehaven. If you use it, and you are honest in completing it, then you have complied with your disclosure requirements. You claim that the expanded form is used to protect the seller, but it is clear that you don't understand the legal effect of the state-promulgated form.

Please help me understand how a 3 page vague disclosure protects the buyer or seller any better than a 7 page extensive detailed disclosure. I though the purpose of a a disclosure was to cover potential issues in a home ?

Since our on staff attorney has created this form over the last 30 years and 2/3 of the area brokers have adopted it, I would assume it's a much better for than the state form.

Austin Willy, it's clear you don't know your TX forms or you'd know the TREC Disclosure is not a promugated form which is why a broker can use a much better in house form.

[Austin-Willy]

Originally Posted by Rakin

Austin Willy, it's clear you don't know your TX forms or you'd know the TREC Disclosure is not a promugated form which is why a broker can use a much better in house form.

Do you just make this stuff up? Are you not aware that the TREC form tracks, word for word, the language that is printed in the Texas Property Code? The statute requires that, at a minimum, a disclosure form substantially similar to the TREC form be provided.

It doesn't mean that other forms can't be used, but it does mean that if you use the TREC form, you are disclosing enough. The fact that brokers may prefer a more extensive form probably has a lot to do with the fact that brokers represent as many buyers as sellers. I'm sorry to tell you this, but the broker / agent is not in charge of the transaction. At least not when I'm involved.

You can assume anything you want about the form that your attorney came up with. The fact that you don't understand the law underlying the disclosure requirement is a good indication of the value of your advice on this subject. I suggest that you become more familiar with this issue before continuing to advise your sellers. That is, if you really have their best interest in mind.