Buy house without agent

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squirm
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Buy house without agent

Post by squirm » Sat Nov 03, 2018 11:56 pm

Sorry doing this from phone.
There's a house wife and I like, it's new construction. The builder let us go there and told us where the key was hidden. We like the place. We found it via open house.
My question, we've sorta have been working with an agent off and on but in the other hand we haven't signed anything with her either.

Do we still have to use this agent or any agent for that matter? I was thinking of just using a real estate attorney and negotiating myself, and having them put on the contact that the buyers agent commission will be deducted from the price.
Opinions please.

sport
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Re: Buy house without agent

Post by sport » Sun Nov 04, 2018 12:59 am

We were in the exact same situation. We were working with a buyer's agent, and had not found anything. We looked at some new construction (it was still being built when we looked) and liked what we saw. We had no contract with the agent. We just thanked her for her efforts, and told her we had found something on our own. We bought the house without an agent, directly from the developer. I consulted an attorney to make sure I was not doing anything wrong. I never met the attorney, we just had a few short phone conversations. IRRC, he sent a bill for $200. That was 12 years ago. We are still in the house and could not be happier with it. One other detail: We had an agent that would sell our house once we found another one. The buyer's agent was from the same office as the agent that would sell our house. So, that office did earn a commission from us, but it was for selling the old house. They had no participation in our purchase of the new one.

TRC
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Re: Buy house without agent

Post by TRC » Sun Nov 04, 2018 7:28 am

One very useful aspect of working with a buyer's agent is to ensure you're not over paying and get a true comp before finalizing on a price. Are you sure the house is priced right? If yes, then you try to negotiate 5-6% less than the true market price since the seller doesn't have to pay a commission.

I've purchased 2 houses without a buyer's agent. Not difficult, but you need to make sure you're not over paying.

pennylane
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Re: Buy house without agent

Post by pennylane » Sun Nov 04, 2018 7:31 am

So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?

Trism
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Re: Buy house without agent

Post by Trism » Sun Nov 04, 2018 7:35 am

pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.

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Watty
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Re: Buy house without agent

Post by Watty » Sun Nov 04, 2018 7:46 am

Trism wrote:
Sun Nov 04, 2018 7:35 am
pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.
+1

In fact the real estate agent had to know that there was new construction in the area and intentionally did not show it to you since they know that builders pay a low commission.

There is no need to use the real estate agent and lots of reasons not to.

pennylane
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Re: Buy house without agent

Post by pennylane » Sun Nov 04, 2018 7:56 am

Trism wrote:
Sun Nov 04, 2018 7:35 am
pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.
There’s more to a buyers agent than just finding you a house. As others have mentioned in the posts above.

Trism
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Re: Buy house without agent

Post by Trism » Sun Nov 04, 2018 7:59 am

pennylane wrote:
Sun Nov 04, 2018 7:56 am
Trism wrote:
Sun Nov 04, 2018 7:35 am
pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.
There’s more to a buyers agent than just finding you a house. As others have mentioned in the posts above.
You only read half of my response. The other half mirrors what others have said, which is ensuring they receive the best price/terms.

If this agent has not/will not be asked do that on this home, the buyer's agent isn't entitled to a commission just because she showed them other houses.

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Watty
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Re: Buy house without agent

Post by Watty » Sun Nov 04, 2018 8:00 am

pennylane wrote:
Sun Nov 04, 2018 7:56 am
Trism wrote:
Sun Nov 04, 2018 7:35 am
pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.
There’s more to a buyers agent than just finding you a house. As others have mentioned in the posts above.
You may be thinking of Buyer Broker and not a buyers agent.

https://en.wikipedia.org/wiki/Buyer_brokerage

Since there was not a written agreement the person was almost certainly not acting as a buyer broker.

Pinotage
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Re: Buy house without agent

Post by Pinotage » Sun Nov 04, 2018 8:04 am

OP: Based on your previous post about being dissatisfied, I think it is a good idea for you to move forward without an agent.
squirm wrote: Anyways, we have an agent, but as usual, they seem useless except for opening the door. She points out stupid things such as "oh, I like the paint". Who cares. I'm thinking of telling her to just sit down while wife and I look around, like I did with our last agent. Our last agent just brought her work and would sit quietly while we looked around. I can figure out where the bathroom and kitchen is
viewtopic.php?f=11&t=260756&p=4153373#p4153373

pennylane
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Re: Buy house without agent

Post by pennylane » Sun Nov 04, 2018 8:11 am

Watty wrote:
Sun Nov 04, 2018 8:00 am
pennylane wrote:
Sun Nov 04, 2018 7:56 am
Trism wrote:
Sun Nov 04, 2018 7:35 am
pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
A buyer's agent's job is to find the buyer(s) the perfect house for the best price/terms. No one is entitled to a commission for a job s/he didn't perform.
There’s more to a buyers agent than just finding you a house. As others have mentioned in the posts above.
You may be thinking of Buyer Broker and not a buyers agent.

https://en.wikipedia.org/wiki/Buyer_brokerage

Since there was not a written agreement the person was almost certainly not acting as a buyer broker.
Buyer broker and buyer agent is the same thing said differently.

I am not contesting that he has a legal obligation to use the buyers agent. I am simply stating the fact that he wasted the agents time by touring homes with her previously and is moving forward on a purchase without her advising him on the home.

The ethically correct thing to do would of been when he found the house, he should of sent it to the agent and asked her to setup the appointment and then let the agent do her job on running the comps and negotiating. Most of the time with new construction, the developers will negotiate AND the agent is still getting their commission which by the way isn’t much on new construction. It’s more around .5-1% to a buyers agent.

What’s going to happen in this case is the developer is going to reduce it 1% and say; there’s your commission reduction, enjoy.

Where with an agent, you might get more off and she will get paid regardless.

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8foot7
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Re: Buy house without agent

Post by 8foot7 » Sun Nov 04, 2018 10:29 am

We used an agent twice in new construction. Two different agents, two different houses, equally useless each time — in fact if possible this last one may have been even more useless than the first.

Do not feel bad about having seen a few homes with someone and then picking one on your own. Many, I dare say most, agents are nothing more than a tax on a new construction transaction.

Sam1
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Re: Buy house without agent

Post by Sam1 » Sun Nov 04, 2018 10:59 am

TRC wrote:
Sun Nov 04, 2018 7:28 am
One very useful aspect of working with a buyer's agent is to ensure you're not over paying and get a true comp before finalizing on a price. Are you sure the house is priced right? If yes, then you try to negotiate 5-6% less than the true market price since the seller doesn't have to pay a commission.

I've purchased 2 houses without a buyer's agent. Not difficult, but you need to make sure you're not over paying.
You should NOT be using an agent for advice on price. You need to do the due diligence to research neighborhood comps. The agent has NO incentive to get you a good price. The only have an incentive to close the deal. I can’t tell you how many agents I’ve had try and steer me wrong on price, including one who said I should offer 100k more than what the home closed for in a hot spring market. You have no idea how the agent manages his or her finances or their history of suggesting offers versus the appraisal outcome. Agents can have horrible advice and again, do NOT rely on someone you barely know to tell you what to pay for one of the largest purchases of your life. Also, agents are notorious for trying to increase the price of real estate

A neighborhood agent just the other day told us we should try and trade up houses every three years. Ha! Of course they’d like for us to do this. Not happening and NOT using this agent.

Here’s an anecdote:

We made an offer on a house not using an agent. Saw a sign and called. Hot market and we’d seen so many homes that we knew what to offer. The actual offer and contingencies is very simple. The buyers agent would get the full 6 percent by us not using an agent which incentivized them to push the seller to accept our offer and it worked.

Right before this I’d casually talked to an agent and mentioned I was interested in homes in this neighborhood. They had seen the same sign I’d seen and called the buyers agent about the house. Then they emailed me to tell me that this house is coming soon and we need to make a VERY aggressive offer as they house already has an offer. The offer being the offer we had already made! So here’s a perfect example of an agent making horrible advice. Had we used them and not ever just reached out to the buyers agent, we would have been told to offer way more than we ended up paying.

Perfect example of how you need to be an educated consumer and not let a third party advise you on what to pay for a house. Anymore than letting a car dealer tell you what to offer on a car.

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squirm
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Re: Buy house without agent

Post by squirm » Sun Nov 04, 2018 11:09 am

Well, I just lost everything I wrote.
Anyways, quickly, this is a local small one man builder. We have meant him face to face a few times because I wanted him to build on a raw lot I was going to buy, but we like the house he built.

Our agent is useless and most of our shopping around was from Zillow and calling the agent and asking her to make an appt. It's only about 7 homes, 2 which were open homes, one of which we want to buy.

Every agent I have dealt with has never offered some scientific methodology on price, it only seems like a WAG, and they just want you to buy. Our seems pushy to write up any offer on any house even if she knows we think it's a pile of garbage.

So where do we go from here? Do I call up the listing agent and say "we're interested"? Do I talk to the builder again? There are pros to get our agent involved, so I can say "get this place, the ball is in your court, fight for me, etc etc".

The market here has slowed a lot, but wife and I want to move on.

Rayandron
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Re: Buy house without agent

Post by Rayandron » Sun Nov 04, 2018 12:03 pm

OP, if I were you based on the situation you described I would not use an agent to buy from the developer.

My own buying experience without an agent is detailed here: viewtopic.php?f=11&t=248517

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Watty
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Re: Buy house without agent

Post by Watty » Sun Nov 04, 2018 12:22 pm

pennylane wrote:
Sun Nov 04, 2018 8:11 am
Buyer broker and buyer agent is the same thing said differently.
The terminology can be different in different parts of the country but they are very different things.

The traditional real estate agent who takes you around to a dozen different houses is paid by the seller at closing. Depending on your state law may be prohibited from telling you some negative things about the house or really helping you negotiate the best price since they work for the seller. They may also be required to tell the seller things about you that you would prefer the seller not know. They may also have some ethical or legal responsibilities to the buyer but their main responsibility is to the seller. This is one of the reasons that people often say that real estate agent was useless when they buy a home.

I have used a buyer broker before. The way it works is that you sign a contract for a set time period, like 60 days, and if you buy a house during that time period you then need to pay the buyer broker a percentage of the sale. Since they are paid by you almost all their responsibility is to you they can say bad things about prices and point out negatives with the house. They can also find you houses that are for sale by owner or new construction. When we found a house we were interested in the buyer broker would play "devil's advocate" with us about the house. There were also a few houses that we looked at where she had us cut the visit to the house short or just did a drive by because once we saw the house she thought there was a major problem or that it was way overpriced. During the contract negotiation she also helped us with the pricing and got the buyer to pay for a lot of closing costs.

Even though you pay the buyer broker it does not mean that you actually pay more overall. The way the contract is written is that if you would normally pay $100K and a 3% commission would go to your traditional agent then you make your offer for $97K with $3k going to your buyer broker. The net amounts are the same to both the seller and buyer. The 3% comission(or whatever it really is) can affect the amount you need to bring to closing so if you don't have 23% of the purchase price you may not have a 20% down payment so that is one consideration when using a buyer broker.

In practice the distinction may be less cut and dry since some real estate agents will not follow the rules exactly when they are working in one role or another. Only a small fraction of real estate agents normally work as a buyer broker and finding a good aggressive one takes some work.

Topic Author
squirm
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Re: Buy house without agent

Post by squirm » Sun Nov 04, 2018 1:36 pm

Ok, thanks everyone. My next question is, do I contact the listing agent and say "we're interested"?
We were at the house last night, builder gave us the key, spent a couple hours there, were pretty much sold.

What do we do?

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Watty
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Re: Buy house without agent

Post by Watty » Sun Nov 04, 2018 2:41 pm

Call the number that you called to get the key and ask them how to proceed. The way that said in your original post that you wanted to use a lawyer to make the offer makes sense.

You will likely hear that there is another buyer that is also bidding on the house, there is almost always another buyer and they occasionally even exist. Take that with a grain of salt unless you are in a real hot market.

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squirm
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Re: Buy house without agent

Post by squirm » Sun Nov 04, 2018 2:57 pm

Watty wrote:
Sun Nov 04, 2018 2:41 pm
Call the number that you called to get the key and ask them how to proceed. The way that said in your original post that you wanted to use a lawyer to make the offer makes sense.

You will likely hear that there is another buyer that is also bidding on the house, there is almost always another buyer and they occasionally even exist. Take that with a grain of salt unless you are in a real hot market.
Thank you. Yes I'll ready for the lies, but the builder is a straight shooter and when I was talking to him he knows that I know the housing market fairly well. We were on a real hot market but it's cooled a lot.

J295
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Re: Buy house without agent

Post by J295 » Sun Nov 04, 2018 3:44 pm

Pinotage » Sun Nov 04, 2018 7:04 am

OP: Based on your previous post about being dissatisfied, I think it is a good idea for you to move forward without an agent.
squirm wrote:
Anyways, we have an agent, but as usual, they seem useless except for opening the door. She points out stupid things such as "oh, I like the paint". Who cares. I'm thinking of telling her to just sit down while wife and I look around, like I did with our last agent. Our last agent just brought her work and would sit quietly while we looked around. I can figure out where the bathroom and kitchen is
viewtopic.php?f=11&t=260756&p=4153373#p4153373
OP .... call builder direct. You don't seem to have any respect for agents and I suspect you'll be frustrated if you talk to the seller's agent. Given your uncharitable comments towards real estate agents it would be interesting to know if you leaving your agent behind provides you any benefit whatsoever. Where we live the buyer's agent fee is baked into the sale price for new construction as the builder pays his selling agent X% and if there is a buyer's agent the selling agent provides buyer's agent a share of that, and if there is no buyer's agent then the seller's agent keeps the entire x%. I would not expect your builder to discount the home price just because you show up without an agent.

I find it unfortunate that you and others would simply move on without at least discussing this with the agent who has worked for you. If this were me I'd discuss the situation with my agent. Perhaps you would learn something through dialogue, and more importantly it is the appropriate way to handle business relationships. If you don't believe they did their job and don't want to pay them, that's your right, but have the courtesy to tell them you aren't using them on the new construction instead of saying unkind things about them here.

staythecourse
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Re: Buy house without agent

Post by staythecourse » Sun Nov 04, 2018 4:02 pm

DId your current agent show you the property or advice you to go the open house or give any ideas on comps? If so, irregardless of you not having a contract with them they will sue later for their commission under the "law of procurement" and likely win. Look it up as it nearly bit me in the behind.

On the second point. The contract the SELLERS agent has with the SELLER will stipulate what happens if the buyer has no agent. The answer is usually they keep both halves. It is not up to the seller's discretion, but his spelled out in their contract with their agent. My advice, if you go through with it call around and find some newbie who is hungry and tell them for no work they can get 0.5% and you keep the other 2%. That way the seller's agent can't try to sneak off with the full 5%.

Good luck.
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g$$
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Re: Buy house without agent

Post by g$$ » Sun Nov 04, 2018 4:34 pm

pennylane wrote:
Sun Nov 04, 2018 7:31 am
So you basically wasted the agents time without her getting paid. That’s nice, do you work for free also?
Or, the agent wasted OP's time by showing houses OP wasn't interested in purchasing. If OP found the house on their own then I don't see any reason to pay the agent.

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jabberwockOG
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Re: Buy house without agent

Post by jabberwockOG » Sun Nov 04, 2018 5:33 pm

Assuming you have no liability to the previous agent means they had absolutely no part in showing you the house you are going to buy, or in introducing you to builder or anyone else associated with the house, etc. If this fact is true then one alternative for you is to contact another agent (make sure they are one person shop with a broker's license or a remax agent that does not split their own commission with their own broker) and tell the agent up front you have already found the house you want to buy, and you want them to assist you with making a competitive fair offer for a flat fee (perhaps $500-750 max - to be paid at closing, and only if the transaction closes) with the remainder of their fee (normally 1/2 of the 6% commission) being rebated directly to you. So you are willing to pay a flat fee for a small amount of their time, but not willing to pay a full 1/2 commission for them doing virtually nothing. Some agents will refuse this arrangement but there will be more than a few who will be hungry enough to take the deal.

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8foot7
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Re: Buy house without agent

Post by 8foot7 » Sun Nov 04, 2018 7:07 pm

jabberwockOG wrote:
Sun Nov 04, 2018 5:33 pm
Assuming you have no liability to the previous agent means they had absolutely no part in showing you the house you are going to buy, or in introducing you to builder or anyone else associated with the house, etc. If this fact is true then one alternative for you is to contact another agent (make sure they are one person shop with a broker's license or a remax agent that does not split their own commission with their own broker) and tell the agent up front you have already found the house you want to buy, and you want them to assist you with making a competitive fair offer for a flat fee (perhaps $500-750 max - to be paid at closing, and only if the transaction closes) with the remainder of their fee (normally 1/2 of the 6% commission) being rebated directly to you. So you are willing to pay a flat fee for a small amount of their time, but not willing to pay a full 1/2 commission for them doing virtually nothing. Some agents will refuse this arrangement but there will be more than a few who will be hungry enough to take the deal.
This is good advice. Someone will take this deal. Keep dialing until you find them.

pennylane
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Re: Buy house without agent

Post by pennylane » Mon Nov 05, 2018 8:08 am

Watty wrote:
Sun Nov 04, 2018 12:22 pm
pennylane wrote:
Sun Nov 04, 2018 8:11 am
Buyer broker and buyer agent is the same thing said differently.
The terminology can be different in different parts of the country but they are very different things.

The traditional real estate agent who takes you around to a dozen different houses is paid by the seller at closing. Depending on your state law may be prohibited from telling you some negative things about the house or really helping you negotiate the best price since they work for the seller. They may also be required to tell the seller things about you that you would prefer the seller not know. They may also have some ethical or legal responsibilities to the buyer but their main responsibility is to the seller. This is one of the reasons that people often say that real estate agent was useless when they buy a home.

I have used a buyer broker before. The way it works is that you sign a contract for a set time period, like 60 days, and if you buy a house during that time period you then need to pay the buyer broker a percentage of the sale. Since they are paid by you almost all their responsibility is to you they can say bad things about prices and point out negatives with the house. They can also find you houses that are for sale by owner or new construction. When we found a house we were interested in the buyer broker would play "devil's advocate" with us about the house. There were also a few houses that we looked at where she had us cut the visit to the house short or just did a drive by because once we saw the house she thought there was a major problem or that it was way overpriced. During the contract negotiation she also helped us with the pricing and got the buyer to pay for a lot of closing costs.

Even though you pay the buyer broker it does not mean that you actually pay more overall. The way the contract is written is that if you would normally pay $100K and a 3% commission would go to your traditional agent then you make your offer for $97K with $3k going to your buyer broker. The net amounts are the same to both the seller and buyer. The 3% comission(or whatever it really is) can affect the amount you need to bring to closing so if you don't have 23% of the purchase price you may not have a 20% down payment so that is one consideration when using a buyer broker.

In practice the distinction may be less cut and dry since some real estate agents will not follow the rules exactly when they are working in one role or another. Only a small fraction of real estate agents normally work as a buyer broker and finding a good aggressive one takes some work.
Actually, it is illegal for a seller/buyer to pay a real estate agent directly. All commissions must be sent to the broker who then pays the agent. All agents work under a broker. That’s how it works in my state and I believe in all other states as well.

audioaxes
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Re: Buy house without agent

Post by audioaxes » Tue Nov 06, 2018 7:28 pm

I purchased my current home with no sellers agent with a FSBO listing where the owner was a real estate agent. It was our third home purchase at the time so I had some experience to refer back to and also took a number of hours researching online to make sure everything we were doing was typical. Process was mostly smooth. Only misstep was getting this HOA transfer fee of about $1000 out of no where late in the escrow. From what I researched it was typical for owner and seller to split this kind of fee but we had nothing in the contract for that and the seller didnt budge... perhaps a good agent would have had the insight on this and would have had it written up in the contract.

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sunny_socal
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Re: Buy house without agent

Post by sunny_socal » Wed Nov 07, 2018 1:04 am

I'd have no problem dealing directly with the builder in this case. Note that the commission for a realtor is already baked into the purchase price. Ask the builder about this and have them discount the price accordingly, they'll likely offer an attractive 'split' on those funds (eg. they keep 20% and you get 80% as a discount.)

novemberrain
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Re: Buy house without agent

Post by novemberrain » Wed Nov 07, 2018 1:29 pm

squirm wrote:
Sat Nov 03, 2018 11:56 pm
Sorry doing this from phone.
There's a house wife and I like, it's new construction. The builder let us go there and told us where the key was hidden. We like the place. We found it via open house.
My question, we've sorta have been working with an agent off and on but in the other hand we haven't signed anything with her either.

Do we still have to use this agent or any agent for that matter? I was thinking of just using a real estate attorney and negotiating myself, and having them put on the contact that the buyers agent commission will be deducted from the price.
Opinions please.
We did the same thing. We never had a realtor anyway. We were looking at houses on our own by searching on realtor/zillow. One of the houses was a brand new construction and the developer had listed it. We made an appointment with the developer and saw the house multiple times. During that time, I did extensive research on price histories in the area and made an excel sheet (with graphs and projections) and took that to the meetings with the developer. I negotiated the list price down by 15% !! Now I have been living in that house for many years and couldn't be happier

A realtor would have been a complete waste of money.

BW1985
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Re: Buy house without agent

Post by BW1985 » Wed Nov 07, 2018 3:59 pm

squirm wrote:
Sat Nov 03, 2018 11:56 pm
Sorry doing this from phone.
There's a house wife and I like, it's new construction. The builder let us go there and told us where the key was hidden. We like the place. We found it via open house.
My question, we've sorta have been working with an agent off and on but in the other hand we haven't signed anything with her either.

Do we still have to use this agent or any agent for that matter? I was thinking of just using a real estate attorney and negotiating myself, and having them put on the contact that the buyers agent commission will be deducted from the price.
Opinions please.
No you don't have to use them, you didn't sign a contract which is good. Usually in the contract they will say that if you find and buy a FSBO without them involved that they are still entitled to their fees so if the seller doesn't pay you'd be on the hook. I wouldn't sign with that in the contract so my agent removed it.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

2tall4economy
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Re: Buy house without agent

Post by 2tall4economy » Fri Jan 18, 2019 5:52 pm

Real estate agents are similar to investment advisers. % compensation regardless of the amount of actual work done and ultimately they don’t have any magic you can’t do on your own.

Only useful for people with irrational fear of the buying process/stock market.
You can do anything you want in life. The rub is that there are consequences.

pdavi21
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Re: Buy house without agent

Post by pdavi21 » Fri Jan 18, 2019 6:09 pm

Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.

sport
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Re: Buy house without agent

Post by sport » Sat Jan 19, 2019 9:43 am

pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had a lawyer review my contract. He charged me $200. He answered my questions and said everything was fine.

pdavi21
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Re: Buy house without agent

Post by pdavi21 » Sat Jan 19, 2019 11:12 am

sport wrote:
Sat Jan 19, 2019 9:43 am
pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had a lawyer review my contract. He charged me $200. He answered my questions and said everything was fine.
Nice.

Millennial
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Re: Buy house without agent

Post by Millennial » Sat Jan 19, 2019 11:53 am

Watty wrote:
Sun Nov 04, 2018 12:22 pm
pennylane wrote:
Sun Nov 04, 2018 8:11 am
Buyer broker and buyer agent is the same thing said differently.
The terminology can be different in different parts of the country but they are very different things.

The traditional real estate agent who takes you around to a dozen different houses is paid by the seller at closing. Depending on your state law may be prohibited from telling you some negative things about the house or really helping you negotiate the best price since they work for the seller. They may also be required to tell the seller things about you that you would prefer the seller not know. They may also have some ethical or legal responsibilities to the buyer but their main responsibility is to the seller. This is one of the reasons that people often say that real estate agent was useless when they buy a home.

I have used a buyer broker before. The way it works is that you sign a contract for a set time period, like 60 days, and if you buy a house during that time period you then need to pay the buyer broker a percentage of the sale. Since they are paid by you almost all their responsibility is to you they can say bad things about prices and point out negatives with the house. They can also find you houses that are for sale by owner or new construction. When we found a house we were interested in the buyer broker would play "devil's advocate" with us about the house. There were also a few houses that we looked at where she had us cut the visit to the house short or just did a drive by because once we saw the house she thought there was a major problem or that it was way overpriced. During the contract negotiation she also helped us with the pricing and got the buyer to pay for a lot of closing costs.

Even though you pay the buyer broker it does not mean that you actually pay more overall. The way the contract is written is that if you would normally pay $100K and a 3% commission would go to your traditional agent then you make your offer for $97K with $3k going to your buyer broker. The net amounts are the same to both the seller and buyer. The 3% comission(or whatever it really is) can affect the amount you need to bring to closing so if you don't have 23% of the purchase price you may not have a 20% down payment so that is one consideration when using a buyer broker.

In practice the distinction may be less cut and dry since some real estate agents will not follow the rules exactly when they are working in one role or another. Only a small fraction of real estate agents normally work as a buyer broker and finding a good aggressive one takes some work.
This is incorrect for my state and neighboring states. Buyers agent or broker are the same thing. Some ask you to sign a contract, but many do not. They are only ever paid through a split commission with the seller's agent.

pejp
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Re: Buy house without agent

Post by pejp » Sat Jan 19, 2019 12:27 pm

My wife was in real estate in NYC, and something similar happened to her. She worked extensively with someone who was looking for an investment property...multiple weekends all over the city etc...after a few months and an aborted bid due to a legal issue, the investor decided she didn’t want to buy anywhere after all. My wife was disappointed but understood, and then a couple of weeks later a personal check arrived in the mail for $1k with a card thanking her for her efforts.

Not suggesting you do that, but if you’ve had a good relationship with the agent, maybe a small gift and an acknowledgement that you’ve appreciated the time spent would be appropriate. Just depends on the situation and how much you’ve worked with them. I know this won’t go down well with the people on here who look at life and relationships through a spreadsheet, but I thought it was a nice touch on her part.

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jfn111
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Re: Buy house without agent

Post by jfn111 » Sat Jan 19, 2019 12:54 pm

pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had to laugh a little bit when I read this. I got fired by a client because I wouldn't let her put in a higher offer. She was a 5% down FHA buyer and wanted to go $30,000 over asking price. (Last years Spring Market was nuts) I ran comps and there was no way that house would appraise for that much and she had no cash to make up the difference.

tmcc
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Re: Buy house without agent

Post by tmcc » Sat Jan 19, 2019 2:07 pm

The internet has made buy side realtors useless. On the sell side, there can be substantial merits that largely boil down to networking and convenience.

As a buyer, what I have done is I approach the seller's agent and tell them that I'll let them have both sides of the transaction for 3.5% total. Its another 50bp they wouldn't have had and they have a bigger incentive to close the deal versus another buyer coming in with their own agent. It can flow through as a seller's credit in purchase price or direct rebate from the broker. It can be a conflict of interests but if you manage it, that kind of a relationship can be very beneficial.

Everything is negotiable. Get creative.

soholiving
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Re: Buy house without agent

Post by soholiving » Sat Jan 19, 2019 2:36 pm

So if I knew the house I want and the price I'd like to pay. I can even download the template for the offer. However what I don;t know is the title company, home owner names etc. Sometime the seller's agent contact info is easy to find, but sometime it's not. So my challenge has been,

1, How can I find those info? Or can I submit an offer without all those info?
2, How can I find out the seller's agent info, at least email address to submit the offer? It seems that not every time I can find it.

Because of the above reasons, I had to use an agent just to submit an offer unfortunately.

Thanks.

pdavi21
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Re: Buy house without agent

Post by pdavi21 » Sat Jan 19, 2019 3:42 pm

jfn111 wrote:
Sat Jan 19, 2019 12:54 pm
pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had to laugh a little bit when I read this. I got fired by a client because I wouldn't let her put in a higher offer. She was a 5% down FHA buyer and wanted to go $30,000 over asking price. (Last years Spring Market was nuts) I ran comps and there was no way that house would appraise for that much and she had no cash to make up the difference.
Mine all but refused to put in 6% off plus seller pays closing costs. Market was going for asking price minus closing fees, but I was paying cash. Finally agreed, and sale went through immediately. Then asked if I wanted to increase price because there was a full price offer. I said no. Sale went through. I bet I could've got a lower deal. Yes, they are useless. They have an incentive to sell at the lowest price and buy at the highest price to seal the deal. Keeping laughing. You should be laughing to the bank with all your ill gotten gains.

hotrodz
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Re: Buy house without agent

Post by hotrodz » Sat Jan 19, 2019 3:57 pm

I bought a house without using an agent last year. The seller did not use an agent either, and it helped me negotiate a better deal. I hired a real estate attorney for 3k and he took care of the contract, recommending a title company that he works with, and recommending an inspector. Looking back I honestly think I could have done it without a real estate attorney (still need a title company), but it does give you some peace of mind. In Texas there is only one purchasing contract template and that is what you use to place an offer, you can get it online and there are lots of YouTube videos on it. My previous home was bought with a realtor in CA. Was also a good experience since the market was super hot and I was completely clueless.

bluebolt
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Re: Buy house without agent

Post by bluebolt » Sat Jan 19, 2019 4:02 pm

hotrodz wrote:
Sat Jan 19, 2019 3:57 pm
I bought a house without using an agent last year. The seller did not use an agent either, and it helped me negotiate a better deal. I hired a real estate attorney for 3k and he took care of the contract, recommending a title company that he works with, and recommending an inspector. Looking back I honestly think I could have done it without a real estate attorney (still need a title company), but it does give you some peace of mind. In Texas there is only one purchasing contract template and that is what you use to place an offer, you can get it online and there are lots of YouTube videos on it. My previous home was bought with a realtor in CA. Was also a good experience since the market was super hot and I was completely clueless.
Your lawyer likely recommended a title company where they got a 50-90% commission (this may not be true in some states).

https://www.chicagotribune.com/classifi ... story.html

michaeljc70
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Re: Buy house without agent

Post by michaeljc70 » Sat Jan 19, 2019 4:06 pm

Thinking you are going to get the commission may not work. You found it through an open house. Was this hosted by an agent? If so, they will feel they are entitled to the whole commission. A lot of new homes are sold without agents, so not having an agent is not unusual and will not necessarily result in you saving any money. You can always try, but they may just be giving you money/upgrades they would have given anybody.

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jfn111
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Re: Buy house without agent

Post by jfn111 » Sat Jan 19, 2019 5:06 pm

pdavi21 wrote:
Sat Jan 19, 2019 3:42 pm
jfn111 wrote:
Sat Jan 19, 2019 12:54 pm
pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had to laugh a little bit when I read this. I got fired by a client because I wouldn't let her put in a higher offer. She was a 5% down FHA buyer and wanted to go $30,000 over asking price. (Last years Spring Market was nuts) I ran comps and there was no way that house would appraise for that much and she had no cash to make up the difference.
Mine all but refused to put in 6% off plus seller pays closing costs. Market was going for asking price minus closing fees, but I was paying cash. Finally agreed, and sale went through immediately. Then asked if I wanted to increase price because there was a full price offer. I said no. Sale went through. I bet I could've got a lower deal. Yes, they are useless. They have an incentive to sell at the lowest price and buy at the highest price to seal the deal. Keeping laughing. You should be laughing to the bank with all your ill gotten gains.
Your sure painting a lot of people with your broad brush. :annoyed

michaeljc70
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Re: Buy house without agent

Post by michaeljc70 » Sat Jan 19, 2019 5:18 pm

bluebolt wrote:
Sat Jan 19, 2019 4:02 pm
hotrodz wrote:
Sat Jan 19, 2019 3:57 pm
I bought a house without using an agent last year. The seller did not use an agent either, and it helped me negotiate a better deal. I hired a real estate attorney for 3k and he took care of the contract, recommending a title company that he works with, and recommending an inspector. Looking back I honestly think I could have done it without a real estate attorney (still need a title company), but it does give you some peace of mind. In Texas there is only one purchasing contract template and that is what you use to place an offer, you can get it online and there are lots of YouTube videos on it. My previous home was bought with a realtor in CA. Was also a good experience since the market was super hot and I was completely clueless.
Your lawyer likely recommended a title company where they got a 50-90% commission (this may not be true in some states).

https://www.chicagotribune.com/classifi ... story.html

3k for an attorney for a real estate deal? I paid around $600 last time I sold (no seller's agent). Almost everyone where I live uses a standard fill in the blank contract for residential real estate (created by realtor's association). My attorney started to use a certain title company. I said I want to pick my own. She told me that was fine, but her fee would go up. She said they do work for the title company and are paid for that work. Without making that $$$$, she would have to charge more. Sounded like a legal kickback to me.

I've always thought title insurance here is a rip off. I mean, they do all these title searches so the chances of something being missed is quite small. I wonder what the actual pay out rate is. To me, it seems like a scheme where the lawyer and title company make more money. Iowa has a state run system and it is the cheapest in the country. I am not advocating for a state takeover, but shedding some light and real competition would be nice.

pdavi21
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Re: Buy house without agent

Post by pdavi21 » Sat Jan 19, 2019 5:33 pm

jfn111 wrote:
Sat Jan 19, 2019 5:06 pm
pdavi21 wrote:
Sat Jan 19, 2019 3:42 pm
jfn111 wrote:
Sat Jan 19, 2019 12:54 pm
pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had to laugh a little bit when I read this. I got fired by a client because I wouldn't let her put in a higher offer. She was a 5% down FHA buyer and wanted to go $30,000 over asking price. (Last years Spring Market was nuts) I ran comps and there was no way that house would appraise for that much and she had no cash to make up the difference.
Mine all but refused to put in 6% off plus seller pays closing costs. Market was going for asking price minus closing fees, but I was paying cash. Finally agreed, and sale went through immediately. Then asked if I wanted to increase price because there was a full price offer. I said no. Sale went through. I bet I could've got a lower deal. Yes, they are useless. They have an incentive to sell at the lowest price and buy at the highest price to seal the deal. Keeping laughing. You should be laughing to the bank with all your ill gotten gains.
Your sure painting a lot of people with your broad brush. :annoyed
It's not a broad brush. It's a conflict of interest inherent in the position. My language is a bit strong, but I am speaking more towards the conflict of interest than to ethics of each real estate agent. If I was an agent, I would behave unethically because I would be incentivized by the prospect of a comission. There are mostly poor ethical agents and rich unethical agents with less in between.

michaeljc70
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Re: Buy house without agent

Post by michaeljc70 » Sat Jan 19, 2019 7:09 pm

pdavi21 wrote:
Sat Jan 19, 2019 5:33 pm
jfn111 wrote:
Sat Jan 19, 2019 5:06 pm
pdavi21 wrote:
Sat Jan 19, 2019 3:42 pm
jfn111 wrote:
Sat Jan 19, 2019 12:54 pm
pdavi21 wrote:
Fri Jan 18, 2019 6:09 pm
Real estate agents are useless. They always tell you to put in a higher offer to ensure the deal goes through. I've heard you should use a lawyer to look over the contract if you are buying without one though. It might cost a lot.
I had to laugh a little bit when I read this. I got fired by a client because I wouldn't let her put in a higher offer. She was a 5% down FHA buyer and wanted to go $30,000 over asking price. (Last years Spring Market was nuts) I ran comps and there was no way that house would appraise for that much and she had no cash to make up the difference.
Mine all but refused to put in 6% off plus seller pays closing costs. Market was going for asking price minus closing fees, but I was paying cash. Finally agreed, and sale went through immediately. Then asked if I wanted to increase price because there was a full price offer. I said no. Sale went through. I bet I could've got a lower deal. Yes, they are useless. They have an incentive to sell at the lowest price and buy at the highest price to seal the deal. Keeping laughing. You should be laughing to the bank with all your ill gotten gains.
Your sure painting a lot of people with your broad brush. :annoyed
It's not a broad brush. It's a conflict of interest inherent in the position. My language is a bit strong, but I am speaking more towards the conflict of interest than to ethics of each real estate agent. If I was an agent, I would behave unethically because I would be incentivized by the prospect of a comission. There are mostly poor ethical agents and rich unethical agents with less in between.
I am not an agent but have a few friends that are long time agents. I think the thing you might be ignoring is it isn't that easy to get new customers. Repeat customers and referrals are how many agents make/build their business. If someone realizes the agent got them to overpay (which can happen easily if another similar place is sold/bought), they won't be getting any future business from that client or their friends. Also, an agent can give you recommendations, but ultimately it is up to you to decide on an offer. Of course, there are agents that want a quick sale and don't care about their customers or if they come back. You can find that in many types of businesses. To me, the agent is there to guide you through the process and not tell you what exact offer to make.

I've sold 3 places on my own (I did pay agents that brought a buyer), but still would use an agent when buying. I'm not paying for it and the system is setup to work that way. A lot of agents will not give a guy off the street the same treatment as another agent.

bsteiner
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Re: Buy house without agent

Post by bsteiner » Sat Jan 19, 2019 9:15 pm

michaeljc70 wrote:
Sat Jan 19, 2019 5:18 pm
...
I've always thought title insurance here is a rip off. I mean, they do all these title searches so the chances of something being missed is quite small. I wonder what the actual pay out rate is. ...
Much of what you're paying is for the search. They have to search the chain of title, and for any judgments against any of the parties. They have to make sure they have releases of any estate tax liens. They have to pay off any mortgages or other liens, and obtain releases. They often have to get affidavits from the parties.

michaeljc70
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Re: Buy house without agent

Post by michaeljc70 » Sat Jan 19, 2019 9:35 pm

bsteiner wrote:
Sat Jan 19, 2019 9:15 pm
michaeljc70 wrote:
Sat Jan 19, 2019 5:18 pm
...
I've always thought title insurance here is a rip off. I mean, they do all these title searches so the chances of something being missed is quite small. I wonder what the actual pay out rate is. ...
Much of what you're paying is for the search. They have to search the chain of title, and for any judgments against any of the parties. They have to make sure they have releases of any estate tax liens. They have to pay off any mortgages or other liens, and obtain releases. They often have to get affidavits from the parties.
Aren't all of those records electronic?

pshonore
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Re: Buy house without agent

Post by pshonore » Sun Jan 20, 2019 9:18 am

michaeljc70 wrote:
Sat Jan 19, 2019 9:35 pm
bsteiner wrote:
Sat Jan 19, 2019 9:15 pm
michaeljc70 wrote:
Sat Jan 19, 2019 5:18 pm
...
I've always thought title insurance here is a rip off. I mean, they do all these title searches so the chances of something being missed is quite small. I wonder what the actual pay out rate is. ...
Much of what you're paying is for the search. They have to search the chain of title, and for any judgments against any of the parties. They have to make sure they have releases of any estate tax liens. They have to pay off any mortgages or other liens, and obtain releases. They often have to get affidavits from the parties.
Aren't all of those records electronic?
Electronic?? Not really. As an example, in CT the land records reside in the Town Clerk's office in each of the 169 cities and towns. The bigger cities and towns may have some of this automated and online. As recently as 20 years ago, in some of the very small towns, record were often kept in the home of the Town Clerk.

michaeljc70
Posts: 4146
Joined: Thu Oct 15, 2015 3:53 pm

Re: Buy house without agent

Post by michaeljc70 » Sun Jan 20, 2019 12:02 pm

pshonore wrote:
Sun Jan 20, 2019 9:18 am
michaeljc70 wrote:
Sat Jan 19, 2019 9:35 pm
bsteiner wrote:
Sat Jan 19, 2019 9:15 pm
michaeljc70 wrote:
Sat Jan 19, 2019 5:18 pm
...
I've always thought title insurance here is a rip off. I mean, they do all these title searches so the chances of something being missed is quite small. I wonder what the actual pay out rate is. ...
Much of what you're paying is for the search. They have to search the chain of title, and for any judgments against any of the parties. They have to make sure they have releases of any estate tax liens. They have to pay off any mortgages or other liens, and obtain releases. They often have to get affidavits from the parties.
Aren't all of those records electronic?
Electronic?? Not really. As an example, in CT the land records reside in the Town Clerk's office in each of the 169 cities and towns. The bigger cities and towns may have some of this automated and online. As recently as 20 years ago, in some of the very small towns, record were often kept in the home of the Town Clerk.
Where I live (Chicago) it is all electronic. I think the biggest issue is if something is filed and there is a lag before it gets into the system. Like a lien filed the day before closing.

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