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If you are a listing agent, and there are two offers for a house with equally good terms, and one has a lower offer but no buyer's agent, what would you do? As the seller's agent, are you motivated to go with a buyer who is not working with a realtor, since you would get more commission on that sale? We are trying to figure out options in terms of not working with a buyer's broker. Thanks!
I don't know about where you live, but where I live you are obligated by law to present both of the offers in a timely fashion and let the seller decide which to take.
First, you make an appointment to show. Then, you disclose in writing, per state requirements. You show it to them. You write up the offer as they would like it. You present it to the seller.
I had a couple call me on a short sale, I explained that it would be better if they had their own agent. I did all the above. I got the seller to sign the full price offer. Two weeks later an agent calls me asking to show. I said the property is under contract, waiting on bank approval. She says she understands the property is vacant, what would be the harm? I asked my seller's permission. I gave the agent the lockbox. The agent asked if we could kick out the first buyer. I said bring me the offer and I will present it.
Anyone see where I am going with this? The second offer was from the first buyer, about 2% less than their first offer.
The buyer's agent had no idea they were in contract already. The seller and I had a good laugh. The buyer never terminated the first contract. They just went out with their own agent and wrote a new offer.
How could they do that? The same person, the same name, ID, home address etc ... do they think that everybody is blind? I can't believe how stupid they are
Interesting.
I know you are primarily a buyers agent, so perhaps you have not yet encountered this situation, but;
You are the listing agent on a property. Someone calls to see the property, explains that they drove by and like the outside, would like to see the inside, and if they like that, possibly buy it. They have no agent, and they feel they do not need one.
You can either show it to them as an unrepresented seller, or tell them they can't see it. What are you going to do?
I'm going to request that they have a buyers agent show them the house. If they insist that I show them, then I'll treat them as any other buyer before I show a home.
I want to meet them in my office and find out if they have a pre-qualification. If not, I'm not going to waste my sellers time. I only take buyers out after they get pre-qualified.
If they are pre-qualified I will show them the home, and inform them beforehand that they will need a buyers agent to make an offer.
I do not act as a dual agent, and I don't work with unrepresented buyers or sellers. I have one listing and informed my seller up front that I will not do dual agency because it dilutes the duties he is paying me to perform, by making me have to go neutral.
I'm going to request that they have a buyers agent show them the house. If they insist that I show them, then I'll treat them as any other buyer before I show a home.
I want to meet them in my office and find out if they have a pre-qualification. If not, I'm not going to waste my sellers time. I only take buyers out after they get pre-qualified.
If they are pre-qualified I will show them the home, and inform them beforehand that they will need a buyers agent to make an offer.
I do not act as a dual agent, and I don't work with unrepresented buyers or sellers. I have one listing and informed my seller up front that I will not do dual agency because it dilutes the duties he is paying me to perform, by making me have to go neutral.
OK.
They meet you at your office. They show you a pre-qualification letter from a well known and respected mortgage lender. They see the house with you, and they like it.
They want to make an offer. They have no buyers agent, and tell you they are comfortable proceeding without one. They don't need or want representation of any sort. They've purchased 7 houses between them in the last 15 years, and are well aware of the process and the pitfalls. "Write us an offer," they say. "And if you don't want to do it, give us the form, we'll write it ourselves."
I glossed through the previous responses so I apologize if my response is duplicated. I always prepare a sellers' estimated net sheet for each offer and present all contracts to the seller and let them decide which one they want. As the listing agent, my goal is to get the seller the highest net proceeds at closing.
OK.
They meet you at your office. They show you a pre-qualification letter from a well known and respected mortgage lender. They see the house with you, and they like it.
They want to make an offer. They have no buyers agent, and tell you they are comfortable proceeding without one. They don't need or want representation of any sort. They've purchased 7 houses between them in the last 15 years, and are well aware of the process and the pitfalls. "Write us an offer," they say. "And if you don't want to do it, give us the form, we'll write it ourselves."
Now what?
They are unrepresented so I'm not going to work with them. My seller understands that, so even if they write an offer themselves with a form someone else gave them, I don't have to present it. If they want to make an offer they will need to have a buyers agent.
The reason an unrepresented buyer would refuse to use their own agent (that does not cost them anything and provides a greater benefit) is likely that they would want to lowball my seller, and also try to get the buyers commission.
They would think they know all there is to know but don't. And would be the most likely to cause a lot of problems for my seller during the transaction.
No matter what their experience is, they are still going to create extra work for me, which increases the risk of creating an implied agency and an accidental dual agency. I don't want that risk, and am not required to accept it.
They are unrepresented so I'm not going to work with them. My seller understands that, so even if they write an offer themselves with a form someone else gave them, I don't have to present it. If they want to make an offer they will need to have a buyers agent.
The reason an unrepresented buyer would refuse to use their own agent (that does not cost them anything and provides a greater benefit) is likely that they would want to lowball my seller, and also try to get the buyers commission.
They would think they know all there is to know but don't. And would be the most likely to cause a lot of problems for my seller during the transaction.
No matter what their experience is, they are still going to create extra work for me, which increases the risk of creating an implied agency and an accidental dual agency. I don't want that risk, and am not required to accept it.
It's fascinating to me that an agent (and a SELLER) would choose to let a buyer walk, not even seeing their offer, because that buyer doesn't want to be represented, instead of mitigating that risk and working to sell the house. To each their own, I guess.
Though, as you said you almost never list houses, you probably haven't actually had to deal with this situation. I hope that continues for you.
It's fascinating to me that an agent (and a SELLER) would choose to let a buyer walk, not even seeing their offer, because that buyer doesn't want to be represented, instead of mitigating that risk and working to sell the house. To each their own, I guess.
Though, as you said you almost never list houses, you probably haven't actually had to deal with this situation. I hope that continues for you.
I list about 3 a year that are referred to me, and also for my own rehabs.
It's dual agency that I am opposed to, because of diluting the service my client is paying me for, because I must go neutral.
With the unrepresented buyer, there is the risk of doing something for the buyer that would create an "implied" agency, and an accidental dual agency that would be illegal because both buyer and seller did not agree to it.
Those who do that may get surprised one day when a seller or buyer gets angry over something and decides to sue the listing agent. A clever attorney will go over everything with a fine tooth comb and would probably find something that would point out an implied agency and undisclosed dual agency, and then the fit will hit the shan.
The risk is not worth the commission to me. When I do a listing I explain that. While I don't do many, I have not had one seller object.
There are also not that many people who would refuse to get their own agent if they really want a particular home. I've never had one come to me with that demand.
There are also not that many people who would refuse to get their own agent if they really want a particular home. I've never had one come to me with that demand.
I've worked with several over my 10 years. But then, if they say that's what they want to do, I don't try to insist otherwise, so I don't know what they would do in that circumstance. I happily let them be unrepresented, and have them sign a document acknowledging that fact.
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