Purchasing a home with no agent (commissions, inspector, points, offer)

[bentlebee]

Originally Posted by 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!

Many realtors keep denying it but I have done the same and it saved me money. Most realtors will adjust the commission and so the seller will pay less (in the end the buyers is paying it of course) and the deal gets closed and in my case we always could close fast without any issues since we always paid cash....and people love cash money!

[scgraham]

"The seller's agent deflected other offers, accepted ours within 2 hours, and we bought it under market."

If this is a true account of events, then the listing agent put his/her commission over the seller’s interests. By deflecting other offers, the seller was abused. So, the listing agent defied his/her legal obligations to the seller.

Since this listing agent did this to the seller -- who he/she works for -- what makes you think that the buyer’s interests were of any concern? This is unscrupulous behavior that puts all parties in jeopardy. Any agent that would do this has the potential to fail to disclose adverse material facts that harm a buyer too. Is there a buried chemical spill in your backyard? How would you know?

[Austin-Willy]

Originally Posted by MikeJaquish

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.

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.

Originally Posted by MikeJaquish

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!

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?

Originally Posted by MikeJaquish

When I am the Listing Agent, I have the same discovery and disclosure responsibility.

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.

[Austin-Willy]

Originally Posted by ooodsie

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.

Thanks. I got a good laugh out of this.

[Austin-Willy]

Originally Posted by scgraham

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?

You're missing the point, sc. Assume a buyer will not accept anything less than $200,000. If a buyer comes in unrep'd and submits an offer for $194,000, and if the seller is able to negotiate with their listing agent to accept the standard 3% the listing agent would get anyway if the buyer was rep'd, then that offer is a $200,000 offer in the eyes of the seller, but no one is paying for the (non-existent) buyer's agent.

In a buyer's market, where agents are a dime a dozen but ready, willing and able buyers are worth their weight in gold, it makes a lot more sense for a buyer to negotiate with their agent than to send a potential buyer packing. After all, everyone knows that the agent is only expecting 3% out of the transaction anyway.

[Austin-Willy]

Originally Posted by scgraham

Is there a buried chemical spill in your backyard? How would you know?

How would you know? Do you order Phase I ESAs on all properties that you list? It's not nice to use scare tactics or to give people a false sense of security.

[scgraham]

Originally Posted by 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.

You're right; procuring cause is used to settle disputes for commission. However, merely showing the home does not establish procuring cause. If the buyer feels the need to consult another broker (buyer's broker) for whatever reason in order to feel comfortable moving forward, then that broker may have a good argument in establishing procuring cause. The threshold rule is something that agents have made up; it has never really existed.

[scgraham]

Originally Posted by Austin-Willy

How would you know? Do you order Phase I ESAs on all properties that you list? It's not nice to use scare tactics or to give people a false sense of security.

Not scare tactics at all, just reality and the full picture. The listing agent has a legal obligation to the seller -- which he/she disregarded. What makes you think the buyer will be treated any differently by this listing agent?

I think you are missing the point....

[scgraham]

Originally Posted by Austin-Willy

You're missing the point, sc. Assume a buyer will not accept anything less than $200,000. If a buyer comes in unrep'd and submits an offer for $194,000, and if the seller is able to negotiate with their listing agent to accept the standard 3% the listing agent would get anyway if the buyer was rep'd, then that offer is a $200,000 offer in the eyes of the seller, but no one is paying for the (non-existent) buyer's agent.

In a buyer's market, where agents are a dime a dozen but ready, willing and able buyers are worth their weight in gold, it makes a lot more sense for a buyer to negotiate with their agent than to send a potential buyer packing. After all, everyone knows that the agent is only expecting 3% out of the transaction anyway.

How do you know that it's the commission that is making the deal happen?

[Austin-Willy]

Originally Posted by scgraham

How do you know that it's the commission that is making the deal happen?

It's not the commission, it's the price. The seller can accept a lower price and still accomplish their financial goals if they don't have to pay an extra 3%.