Agents, when buying house to live in

When purchasing a house for your own family to live in (the conventional way, with bank financing), once you’ve located the home and seen it through the listing realtor, is there any reason why you’d need a buyer’s agent of your own to make an offer and proceed with the transaction?

Yes. First, the listing agent just wants to sell the house, and may miss guide you. Not saying all agents are bad, but right now they are stuggling to eat, and may veer (sp?) from the truth. Plus, why not, you don’t pay the commision. The seller’s always pay the commission.

Good Evening,
OOOps, You just answered your own question. Once you use a Realtor to see or to have a home shown to you, unless you told the listing agent that you already have a Realtor. Then you will need to write the offer with that agent. They could lay claim to the commission if they showed you the home, but you used some one else to write it. If you do not prefer the agent who showed you the home, make it clear to the Agent you are about to use because it will come up . I like to play nice with all Realtors, accept the ones who should be assembling Lego’s or making soup…, and you will find them !

Luke is right,
You are not paying the commission. If you are a accomplished buyer and the listing agent is adequate, the home is right for you…The listing agent may be willing to give up part of the commission in order to get the sale, meaning lower cost to you.

The answer is really “it depends”. My experience and the experience of other agents in the office is that some of the independent firm like RE/Max may be flexible on the commission but some of the larger ones like Century 21, Coldwell Banker, etc will not have any fexibility on the commission. Some of them would rather lose a deal over 1k rather than lower their commission. In those cases you mind as well have a buyer’s agent.

Also when I’m representing clients as a seller’s agent, I don’t give them all the information I would normally give to someone as a buyers agent. I will if asked, but only if they know to ask. When I’m a buyer’s agent, I volunteer all that information as I’m representing them as a buyer. About 90% of the time the listing agent ends up sharing the listing fee with a buyer’s agent so they’re not really expecting to sell their own listing that often. Also when you’re not represented, some agents feel that they’re doing twice the work so why shouldn’t they get twice the pay?

People who are serious about buying typically engage a buyer’s agent at some point, those not so serious and maybe not as well educated about the process end up with the listing agent they run into at an open house. As for real world experience, I’ve noticed that people who used the listing agent didn’t get as good a deal as someone who used a buyer’s agent. That’s just from talking to the people at our mortgage company next door. I’ve seen some strange or unfavorable terms written into a P&S that could have been negotiated better by a good buyer’s agent. I’ve also noticed that they tend to overpay a little based on the market.

Well, we like and trust this listing agent who showed us the home. And, he’s willing to list and sell our home as well, alllowing us to purchase the new one.
Bottom line to me seems to be…I can run my own comps. I can get my own inspection. I’ll have my attorney handle the contract. As long as the comps and inspection are good, I don’t seem to need my own realtor to make an offer.

The “it depends” answer is correct. I found out from some insiders in the new house sales business that most builders will offer you less of a discount through a realtor. Why? There is only so much of a % that a new house salesman is allowed to reduce the new selling price. However most people are not able to negotiate down to that bottom level or maximum % off with a new house salesman, so it’s not worth even bothering trying on your own. However I used some heavy negotiating tricks to get free high-end appliances, free customizations in the new house [giant bathroom, marble, etc], they paid all my closing costs — and I even got a check back at closing. And of course it was a nothing down deal. And note I bought this house several years ago, when the market was hot hot hot and most builders wouldn’t even think about offering a deal like this. So if you’re a good negotiator you can usually get more of a deal yourself…especially now that the new and used house salesman are desperate

As a buyer, unless you have signed some type of agreement that a particular agent has an exclusive right to work with you you are not “obligated” to do anything. You can really have an agent drive you around and show you a bunch of homes, then when it comes to it go straight to the listing agent and ask for a discount. Now, that is very unethical, but you can do it and there isn’t too much the agent can do about it.

Sure, they can try to take you to court and what not, but the reality of the situation is that if you haven’t signed anything with anyone, then no one is entitled to any commission and they will most likely lose their case.

As far as the listing agent trying to “mis-lead” you, that is a) illegal and b) not true. If you go directly to a listing agent and have them represent you in that transaction they are also working on your behalf, so they are now obligated to disclose to you any and all information they may have. If you have your own agent that listing agent isn’t required to do jack for you.

I personally think it’s better to buy properties unrepresented. It’s more difficult finding properties, but it makes more sense economically. You figure, the seller is paying 6%. Most likely 3 goes to each agent, if you eliminate one of the agents, then potentially that 3% can go to you. Sure, the listing agent can be an ass and try not to give it to you, but then you can go directly to the seller and explain how the agent is jeopardizing your deal because he’s being greedy.

I don’t know, a lot of people may disagree with me, but I’m a shark. I fight for my money and when I see an opportunity to do something more efficiently I go after it.

So to answer your question, if you’ve visited the property without an agent and you decide to buy it, you do not have to go out and get another agent to represent you. You instead should ask the listing agent to pay your closing costs or something. Agents don’t like this answer, but it’s the truth and I’m a REALTOR® myself.

This actually came up in another forum. I think you’re referring to the listing agent acting as a disclosed dual agent. The question there is that the listing agent can’t really represent both sides and be fair to both sides at the same time. The scenario there is the seller lists a house at $300k, but tells the listing agent he’ll be happy with $275k. The buyer then tells the listing agent that he’s going to offer $275k but he can go even go up to 300k. So who’s interest does the listing agent represent in that case? I’m a broker myself and I just hope that situation doesn’t come up. The real way out of that is to have the buyer that’s unrepresented be represented by another buyer’s agent in the office. In that case, now you’re now represented and you didn’t get too much of a choice of a buyer’s agent.

As for the fee, you know as a Realtor, you would just go through with the transaction and after it’s over, you’d take the case to the local board of Realtors and fight for your share of the commission afterwards. So in that case the listing agent would lose by discounting his commission and then end up having to pay the full commission afterwards. If the listing agent is smart, he wouldn’t cut his commission. I’ve known a few Realtors that this has happened to. Procuring cause is one thing that gets fought over a lot and the buyer usually isn’t brought into it as bringing it up before the deal gets done can endanger the deal.

Bottom line with procuring cause is what caused the buyer to buy that house. If a realtor showed the house to the eventual buyer and the buyer went behind the realtor’s back to the listing agent, I think the realtor that first showed the house has a good case for procuring cause. Lots of court cases to support this.

If you’re buying a property unrepresented, it probably makes sense only if you’re very experienced in the transaction. And of course you could always go to a discount broker that will give you part of the commission back like ZipRealty or a bunch of other ones out there.

As for builders, I’d have to say it depends again on the realtor. We have one development near us that we’ve done a lot of deals on and we get really good discounts from the builder. As we have a lot more volume with them, I’m not sure if they’d give the same discount to someone that came in unrepresented. It’s sorta like getting a mortgage at a bank, you would think you’d get a better rate there, but mortgage brokers do more volume so they actually get better rates.

Henry is spot on on this topic.

Just because an agent shows you or is showing you homes doesn’t mean that they represent you. Learn this. Unless you have signed a buyer’s agent agreement, then that agent is a seller’s subagent, and ‘works’ for the seller, not the buyer.

If the listing agent becomes your buyer’s agent, then they’ve become a dual agent, and as Henry said, have put themselves in a very bad position. Most agents put in that situation simply say to each party, “I can’t do anything but present the offer(s) and help you sign contracts.” Wow. What help! However, that’s the best way for them to stay out of court.

Unless you are an agent yourself, no agent can legally ‘give’ you a portion of the commission. Sure, they can discount it if they want, but if you’re getting $$$ back, then you’re engaging in an illegal activity.

Procuring cause is BIG in the agent world and happens as Henry said. Think the customer isn’t affected? Think again. If you, as the customer go to a listing agent to make an offer after first using another agent to view the property and the listing agent is confronted with ‘procuring cause’ AND you did not fully inform the listing agent that you had been working with another agent(s), then the listing agent can sue YOU for misrepresenting yourself.

As to the original question…Even if you don’t want to use a different agent (and really can’t as of now), you should at least make the listing agent your buyer’s agent as well. What this does is prevent that agent (legally) from disclosing any information about you to the seller in order to get a higher price. Like, Henry said, if you happen to say to that agent that you’ll offer $275K but could go to $300K (and it happens even to people “experienced” in buying), then they can (and should) let the seller know that.