Purchasing a home with no agent (vents, property, legal, offers)

[Austin-Willy]

Originally Posted by gbone

The loss of future referrals from your client is much more significant than by making a few more dollars by not representing their best interests and trying to get the best price possible for them. This is a red herring argument that has little basis in fact.

That argument may be a red herring, but the conflict of interest is not. The real conflict is that the agent wants the sale to close. Period. The agent is not paid to make sure that there are no significant problems or risks. The agent is paid to get the deal closed. Agents are salespeople. Nothing evil about it, but they are in it to get paid. It is up to each buyer or seller to look out for yourself.

[MikeJaquish]

Originally Posted by Austin-Willy

That argument may be a red herring, but the conflict of interest is not. The real conflict is that the agent wants the sale to close. Period. The agent is not paid to make sure that there are no significant problems or risks. The agent is paid to get the deal closed. Agents are salespeople. Nothing evil about it, but they are in it to get paid. It is up to each buyer or seller to look out for yourself.

This is a profound and short-sighted misunderstanding of an agent's role.

As an agent, I'm responsible for discovery and disclosure of material facts, problems and risks, affecting the property.
That is a huge portion of how I earn my pay, and a responsibility I take quite seriously. It leads to some very long hours and research.
Anything less and I have not earned my pay.

Yes, I do sell my services. Once a Buyer engages me, my sales function is all but done. I am engaged to offer discovery, investigation, disclosure, and negotiation. If they are not able or willing to buy due to irreconcilable issues that I discover, then I have done my job of protecting them well.
On to the next prospective property or client!

When I am the Listing Agent, I have the same discovery and disclosure responsibility.
As a Listing Agent, I may work harder to "sell" the property, contacting prospective Buyers or their Agents, and confirming that they are aware of amenities and features of the property.

That is actually "marketing" more than "sales," since "closing" is not a part of the interaction.
Unlike typical sales efforts, where many small "Yesses" may lead to the big "Yes," and trial closes are continuous in the dialogue, that hard sell by Listing Agents is inappropriate. Overdone, "ABC" indicates desperation, and will often cost Sellers money, as the offer price drops a little with each nuisance trial close.

[Hollytree]

with a bit of research you can get the info. And making an offer without an agent can be more appealing to the seller. They only need to pay 3% rather than 6%.
TRISTANSMOMMY:
Oh boy!! Where did you get that information from.. LOL. NO MATTER WHAT YOU OFFER FOR THE HOME. represented or not .. the fulll commission in the commission agreement needs to be paid!!! So, if the listing agreement is for 6% than 6% gets paid!!! The agent only agrees to share the set commission with any cooperating or buyer broker agent.. not give up half the commission if a buyer comes that does not have thier own buyer agent HUGE misconecption.

A buyer SAVES NOTHING BY NOT WOKRING WITH AN AGENT!!
But they are certainly able to go, find and put in an offer on a home with any listing agent without one... by all means.. better for the listing agent actually.

A buyer saves money by not working with an agent if they go directly to the listing agent- if there is one- to make their offer. That agent then has an incentive to get their offer accepted because they know they won't have to split the commission with another agent. Of course, they still have to split it with their broker if they are under one. We employed this strategy to buy a house once. It worked well. The seller's agent deflected other offers, accepted ours within 2 hours, and we bought it under market. The house now has about $170k of appreciation- even in today's down market. I think you will find that RE agents, fiduciary responsibility to the contrary, operate with their own interests foremost. No big surprise to any sophisticated person!

[London Girl]

Originally Posted by Hollytree

The seller's agent deflected other offers, accepted ours within 2 hours, and we bought it under market. The house now has about $170k of appreciation- even in today's down market. I think you will find that RE agents, fiduciary responsibility to the contrary, operate with their own interests foremost. No big surprise to any sophisticated person!

Totally agree Hollytree.

We were well informed on the local market, knew exactly what we wanted in terms of location, size and layout; had viewed over 30 properties, and had friends in construction look over a couple of places with us and give some advice on possible upgrading and remodelling costs on those properties that required it.

We were confident negotiators and used a discount broker to deal with the paperwork.

We would have liked to use a local realtor but despite the fact that we were cash buyers, had no property to sell ourselves and, after viewing direct with listing agents and open houses had pretty much decided on a property before approaching them (they probably wouldn't have had to even show us anything - how much easier can it be????) we found that none of our local agents were prepared to offer any buyer's agent commission discount whatsoever.

I was simply not prepared to see someone clean up thousands of dollars for preparing standard paperwork (we had no complications whatsoever with our situation, finances etc) and we therefore found a broker in a neighbouring town who was happy to take our very straightforward business and rebate us commission accordingly. For all those realtors who squeal "Ooooh he must be a crap negotiator if he rebates commission" - what a tired old argument - no, he wasn't crap at all - and he's now getting business from our referrals - business our local realtors have now missed out on. We saved thousands, he got paid a fair sum for the work he did - the losers were our local agents who offered nothing and who got nothing. That is not "good negotiating and business sense" to me.

[Bill Keegan]

Originally Posted by London Girl

no, he wasn't crap at all - and he's now getting business from our referrals - business our local realtors have now missed out on. We saved thousands, he got paid a fair sum for the work he did - the losers were our local agents who offered nothing and who got nothing. That is not "good negotiating and business sense" to me.

Isn't it possible that they missed out on nothing they wanted? That they made business decision? I would have made a similar decision. I'm not an order taker. I would not want to be an order taker. I am a Realtor. If I'm going to be involved in helping you purchase a house, then I'm going to be fully involved. I'm going to offer information, advice, knowledge, expertise, experience, thoughts and insights. I'm going to make sure that you ask the right questions, that you get answers to those questions. I'm going to be certain that you have the information you need to make the decision properly. And I'm going to get paid for that. And that IS good negotiating and business sense. Now, in your case, it sounds like you would have had no need for the service that I provide. That's fine, and good for you. But please do not assume that we all are dying to take that sort of business and make the easy few dollars it would provide. Or that those who refused it are now kicking themselves for doing so. I do what I do, and let those who want it, have business like yours. They aren't wrong, they aren't necessarily poor agents, they aren't a lesser species. They just offer a service I don't bother to offer.

[brookdaleresident]

My agent has been totally involved in my purchase. She never made me feel like she was selling me anything. She showed me houses, pointed out the good and bad features. When we made the offer and had the inspection, she fought for me so I could get the best price possible. sure you can buy a house without one, but for me, it never would have worked. I purchased a long distance from where I live and need to be represented. My agent is earning every dollar she's getting paid.

[Naptowner]

Originally Posted by TristansMommy

LOL.. nope.. agents will not concede part of their fee when the buyer has no agent.. because guess what? That agent now has those buyers as their "customers" and is dealing with BOTH sides of the transaction as far as work/paperwork and follow up is concerned (calling two attorneys, keeping up with the buyers banks, inspectors etc.. as far as follow up and follow through are concerned)! You can still work on both sides as long as you never compromised your clients (seller) sale price by giving information to the buyer (customer) that you shouldn't have (ie: the lowest price the seller is willing to take or information that may seem to put the sellers at disadvantage like they are divoricing and MUST SELL now or something along those lines).

Unless there is a dual agency agreement, the seller's agent only represents the seller. S/he does not represent the buyer, and does not have twice as much work to do. The lack of an agent on one side does not automatically make it a dual agency situation. That's a weak justification.

It seems you really do not understand how real estate transactions truly work and you are giving misinformation which stands to hurt potential buyers with misperceptions.

I have been involved with many real estate transactions, and I have seen more than a couple agents negotiate on commission to get a deal done. You're naive if you think that never happens. This is a buyer's market, and a good listing agent will agree to take a lower commission to sell a house. There is no incentive whatsoever for a broker to refuse to reduce its commission if there is a buyer willing to pay enough to get the seller just as much after commission as if there were an agent on the buyer's end. In fact, it would be a breach of the broker's fiduciary duty to do so. Even if the agent only comes off by one or two percent, that translates into thousands of dollars in savings.

Look, I don't pretend that just anyone can buy a home without an agent. I used one when we bought our first home. Agents can be invaluable in distinguishing good buys from bad buys, in pointing out problems that the buyer doesn't see, and generally being an objective voice to help balance out the emotions of the buyer, which can kill a deal or incite the buyer to overpay for a house they just love. If I have insulted any agents or brokers out there, I apologize. But I stand by what I said: if you are confident that you've found the house you want and that it's the right price, you can save a lot of money by not having to pay an agent.

[ooodsie]

For the people who are saying that the 6% is set in stone and can't be changed - that is not true.. I have negotiated a few deals where I have agreed to give up 1% of my side in order to get the price that the buyer wanted.. With that being said, I don't think the original poster should represent themselves just to save money, especially as first time home buyers. And lastly to answer the question of "is it too late to get a buyers agent", technically yes. There is a thing called "the procuring cause" in a transaction. If the buyer walked into the open house, the listing agent showed them around, and they had no agent of their own at that time - that listing agent was the procuring cause that enabled them to wish to purchase this house. TECHNICALLY - the listing agent could sue the owners if they brought a buyers agent in after the fact. Is the listing agent going to do that? 99% of the time, No.. its not worth it - especially since they are already getting paid on their own half anyway. Just letting you know.

[scgraham]

Originally Posted by HappyTexan

If you understand real estate and can manuever yourself then you do not need an agent. If you are a first time buyer or are not familiar with real estate then it's in your best interest to get an agent.

Not everyone needs an agent.

A * limited few don't need an agent, but All are paying for the buyer agent's service whether they want to acknowledge it or not; it's all accounted for in the sales price. Who would want to pay for something not received?

* The limited few are categorized as those who have been actively engaged in at least 10 real estate transactions to a full grasp of all the nuances.

[bentlebee]

Originally Posted by Austin-Willy

That argument may be a red herring, but the conflict of interest is not. The real conflict is that the agent wants the sale to close. Period. The agent is not paid to make sure that there are no significant problems or risks. The agent is paid to get the deal closed. Agents are salespeople. Nothing evil about it, but they are in it to get paid. It is up to each buyer or seller to look out for yourself.

That is exactly what a lawyer told me and I believe it is true....A lawyer will get paid either way...so he can be honest....I'm not saying a realtor can't be honest but they only get paid if they close the deal so in this time frame, more realtors will try to get a deal closed, even if it isn' in the clients best interest....the realtor need a pay check tooo. so figure out who has to look out for the best interest of the client.....THE CLIENT!!!