Purchasing a home without a buyer's agent?

[jordanaf]

I think there are a lot of bad agents out there. There are a lot of part-time and weekend agents out there that don't know what they are doing. Houston is a seller's market now and if you want to find a house in certain neighborhoods you better have an agent working for you. Multiple offers are the name of the game. I just had a condo listing in midtown and got plenty of calls from frustrated buyers without agents because they kept losing places they were thinking about making an offer on. A good agent will tell you "we better go today to see this place because it will be sold by tomorrow". A good agent will have a contract written up and in hand just in case you like it and want to make an offer. A good agent will have checked the comps and know what a good price is as well as what it will take to get a house thats a hot item. A good agent will protect you from a lawsuit or buying something that has issues. The buyer doesn't pay a dime for the service so I don't understand the reluctance to have a buyers agent.

[HoustonPharaoh]

Buying a house without an agent like going to court without a lawyer :P

Some buyers want to make low ball offers even after explaining and showing the comps that the house is already 25k below it's real value and the house is in real good condition and then they get mad that their offer was not accepted. We can't always just blame the agents. We explain and recommend but at the en of the day we do what the buyer wants, he is the one will be paying not me! At the end, they get the message but after they get frustrated couple Of times

[javavs]

Originally Posted by marksmu

There is no reason in the world that a buyer should not be allowed to deduct half of the commission against the sales price if he does not come with a realtor except that realtors refuse to do it b/c they are rabidly protecting their livelihood. Realtors have a strong voice and are well organized....they are clinging to their commissions despite the fact that the internet is now doing 9/10 of their job for them.

The 6-7% commission is alive and well now, but it is in trouble. The internet is able to quickly and accurately answer nearly any question that a realtor can and it does it for free 24/7.

This is ridiculous! It doesn't seem like you understand representation or contract obligation very well , regardless if it is a "Realtor" or simply a real estate agent. When a seller uses an agent to list their home they make a commitment to pay a percentage of the sales price to the agent for selling the home. Typically this is 6% but this can vary. It doesn't matter who brings in a buyer, they are contractually obligated to pay the agent that percentage.

The internet that you say is doing 9/10 of their job is probably a MLS service. Typically they will post on a multiple listing service (usually one run by a governed by local Realtor board like HAR in the Houston area, of which all agents using the service must be members.) By posting on this board they are making an agreement to share the commission with any agent who brings in a buyer. This might be 3% or it might be 5 or any number, but they disclose this in the agent side of the listing service. You only see a small portion of information that is on the service, an agent can get a fuller picture of this, such as days on the market, which can improve your negotiations.

Let just say you call the listing agent to see a property and you are not under s buyer rep with anyone. They can show you the property, but they rep the seller, so their responsibility is to the seller and they have to give you a form called an IABS, explaining about who they represent. Many people mistake this for a representation form, but its simply a disclosure. Now should you decide you want to buy this home you can use their services to put in a contract, but they still do not represent you. You can then go get an agent, but because you used they sellers agent to see the property they are the "procuring cause" and are not obligated to pay your agent anything. Your agent will still expect to be paid for services and should you chose to use an agent, you can pay out of your own pocket, but most people are unwilling to do this. If you decide to just use the sellers agent with out representation, that agent will get all of the commission, but cannot advise you or negotiate for you. Anything you tell this agent is not confidential, as they represent the other party. In some cases you may have a broker representing both parties and in this case 2 agents are used, an intermediary agreement is signed and the broker cannot advise either client, but you will get this from the individuality agents. Representation is a complex issue, and not easily summed up in a few paragraphs.

Why should you bother being represented? 1) they do most of the work and have a more intimate knowledge of the business. You wouldn't dream of doing your own dental work or surgeries, right? Well a home purchase represents the single biggest investment most people ever undertake, why would you try to be come an expert overnight and do all of it on your own? Their is a lot more to real estate that simply opening doors and finding a list of homes, in fact that's the easy part. Negotiation of price, negotiation of repairs, advise on contracts, going through all the potential problems would take all day. 2) they work for you. They want you to find the best possible home at the best possible price. The difference in commission on negotiated price is nominal to them at best, but the difference between you sending the future referrals is HUGE. Lets see a few hundred dollars more now, or a few thousand dollars later. I know which I would pick. Despite all this remember that they are not miracle workers. You are not going to get a 300K house for a 100K just by negotiating.

You are probably thinking I'm just an agent fishing for business, but no I am not an agent. I was an Realtor for 4 years and managed an real estate office for a few more. I have experience with both sides of a transaction, as well as representing builders and new home buyers. Despite that, i have been out of the business for a while and pursuing an other career. I am currently in the process of purchasing a home for the first time my self, and the first thing I did was contact an agent friend of mine who knew the market. I know enough I could easily do it my self, but I also know what benefits an agent brings to the transaction. Even if I had to pay her out of my own pocket it would be worth it to me to be represented.