Has anyone purchased a house without using a buyer's RE agent?

[vludmilla]

Has anyone bought a house without having a RE agent represent them? Did you just negotiate with the seller's agent directly? Did you use an attorney for advice and if so, how? We are planning to buy our first house soon and we want to be able to leverage the buyer's agent's commission to lower the price on the house.
Any help is VERY much appreciated!

[MartiesMom2B]

Is there a reason why you don't want to use an agent? Is it because the seller won't work with one? You are not responsible for an agent's cost if you are the buyer. In this housing economy, I would think that the seller wouldn't mind paying the cost for the agent.

[schums]

I think she's hoping that the seller would be willing to come down on price more if they knew they were only paying 3% for an RE agent vs. 6% (or whatever the rates are in her area).

[vludmilla]

I think she's hoping that the seller would be willing to come down on price more if they knew they were only paying 3% for an RE agent vs. 6% (or whatever the rates are in her area).

Correct. I am buying in a very expensive area where the 2.5% buyer's agent commission would be 16-20k and I could really use to get that knocked off the price to help me afford the house.

[stonecali]

We are in a similar situation and price range and were weighing possibilities of not using an agent. However, we decided to use one.

I read this several times: "Many investors incorrectly believe that if they don’t use a buyers’ agent they can get the seller to give “them” a 3% discount in-lieu of paying the full 6% to the listing agent. This is almost always wrong. A seller enters into a listing agreement with the listing broker for an agreed upon amount or percentage. Once the property is listed in MLS that fee is shared with the agent, if any, that sells the property. If the listing agent sells the property…they keep 100%. That means not only do you not get a discount equal to the shared fee, but you also are letting the seller have an advantage in the negotiations. "

I guess it depends on how their contract is written up, but if you deal directly with the seller's agent, he also becomes YOUR agent. And, let me tell you.... he has the seller's interest at heart more than yours.

The agent we chose really knows the neighborhood, has lots of historic sales data, knows what neighborhoods to avoid due to bad builders, is representing other clients so she knows what things are worth and how much to offer going in and what to expect. So, yah, she gets paid 2.5% but if she gets us a better deal because she knows how to negotiate and what things are truly worth, we already made back that money. Also, I'd rather not work with the seller's agent. Their job is to get the home sold, so I feel like they don't truly have my best interest at heart.

No, I am not a real estate agent, but we are looking to buy a house by the end of the year (woo hoo!) so my husband had the job of figuring out if it was a good idea to use one or not.

[vludmilla]

We are in a similar situation and price range and were weighing possibilities of not using an agent. However, we decided to use one.

I read this several times: "Many investors incorrectly believe that if they don’t use a buyers’ agent they can get the seller to give “them” a 3% discount in-lieu of paying the full 6% to the listing agent. This is almost always wrong. A seller enters into a listing agreement with the listing broker for an agreed upon amount or percentage. Once the property is listed in MLS that fee is shared with the agent, if any, that sells the property. If the listing agent sells the property…they keep 100%. That means not only do you not get a discount equal to the shared fee, but you also are letting the seller have an advantage in the negotiations. "

I guess it depends on how their contract is written up, but if you deal directly with the seller's agent, he also becomes YOUR agent. And, let me tell you.... he has the seller's interest at heart more than yours.

The agent we chose really knows the neighborhood, has lots of historic sales data, knows what neighborhoods to avoid due to bad builders, is representing other clients so she knows what things are worth and how much to offer going in and what to expect. So, yah, she gets paid 2.5% but if she gets us a better deal because she knows how to negotiate and what things are truly worth, we already made back that money. Also, I'd rather not work with the seller's agent. Their job is to get the home sold, so I feel like they don't truly have my best interest at heart.

No, I am not a real estate agent, but we are looking to buy a house by the end of the year (woo hoo!) so my husband had the job of figuring out if it was a good idea to use one or not.


Thanks for this feedback! Where did you read those statements? I did a quick search before I posted and I couldn't find what I thought were reliable sites but I figure you found better info than I did. Oh, and how did you select your agent?

[bubbaray]

That is called "dual agency" (where 1 RE acts for both the vendor and the purchaser). It is frought with problems and AFAIK, not permitted in all jurisdictions.

Personally, *I* would be very hesitant to make a house purchase under a dual agency arrangement. I would make extra certain that I had a truly independent home inspector in such circumstances too.

FWIW, I used to know a lot about dual agency, did some pretty major research into it for a professor in law school. So, I'm not talking out of my blow hole, as per usual. LOL.

[shoxie]

We bought two of our homes, one a co-op in NYC and the other a home in NJ using only the buyer's agent each time. The first time we bought, we had our own agent - he sucked, but that's neither here nor there. In any case, I think you'd be fine doing so, just make sure you know what your limit is for the house - how much you're willing to pay. And, any time you speak with the agent, make sure you don't show him/her all your cards, so-to-speak; I would actually caution this even if you have your own agent. Realtors are human, after all, and whether or not they're working for you, they're working for themselves, too. I actually think that most agents want to close the deal, and they will "massage" both parties to find a middle ground suitable for both.

Once you're under contract, just make sure to get the best attorney you can - this is more important than anything. S/he will protect your interests more than any realtor. As a PP stated, find an independent home inspector, too. I would do that regardless of the realtor situation. Oh, and I have to mention that both times we did the dual agency, the brokers did shave some of their commissions off. When we were selling, we negotiated with our lister to pay her 6% for the sale, but only 5% if she brokered on both sides. Many people do this, so it's possible that the sellers of the house you like did the same thing. However, I wouldn't assume that the seller will be saving the 2.5% (or whatever the selling agent's commission is) but more likely closer to 1%.

[shoxie]

Actually, I would say to find an attorney ASAP. It may take some phone calls and legwork to find someone you like, so it's better to have them waiting in the wings when you're ready to go into attorney review. They can give you a bit of advice before-hand, as well.

[alien_host]

Get a good RE Attorney, you should have an attorney anyway to represent you. You can also request that your bank to utilize your attorney for the title search etc. which would cut down on the number of attorney's involved.

We bought our last house WITHOUT a buyers broker 6 months ago. We got the seller's broker to lower the commission 1 percentage point which allowed us to make a lower offer and still get the house. DH did the negotiating with the sellers broker. The broker lowered the commission w/out batting an eye b/c another buyer WITH a buyer's broker was trying to get in on it (and the seller's broker would have to share the commission).

IMO, you do not need a buyer's broker. If you have an attorney they can draw up any paperwork that is needed.

I'm in a rush now (have to get to bed) but if you want more info I can answer tomorrow.

ETA: just b/c you don't have a buyer's broker, doesn't mean that the seller's broker represents you. You don't have to sign anything saying the seller's broker represents you, I don't think. (I'm not a broker BTW, and each state may be different).

Also I believe most times the split b/w the seller's broker and buyer's broker is not 50/50. Generally the seller's broker/listing broker has a bigger cut.

[stonecali]

Thanks for this feedback! Where did you read those statements? I did a quick search before I posted and I couldn't find what I thought were reliable sites but I figure you found better info than I did. Oh, and how did you select your agent?

We selected our agent because we are looking in three different neighborhoods (all very close together), and she has very neighborhood-specific websites for those neighborhoods (2 separate websites). She also has .pdf files of all the floorplans in those neighborhoods, so I can just email her and get the floorplan of a home before deciding if I want to see it. She has worked in the area for 20+ years (and also lives in one of the neighborhoods). I had her show me one house nearby and then she came over to our house and we talked for a while (with DH) and she really seemed like she knew what she was talking about as far as what neighborhoods to avoid, she really knew the personalities of the area schools, what prices are like and where they are going, etc. I just felt at ease with her. She was like my mom or something (but her kids are in college).

So, basically, I chose her because she seemed to specialize in exactly where we want to live.

As far as finding information online about whether or not to use a RE agent as a buyer, just pay attention to "who" is writing the article. We put much more weight on information that was not posted by a real estate agent, just because I felt like it was more independent.

[alien_host]

I have some more thoughts this AM:

I think the benefit to using a buyer's agent is convenience in the search process. Having them weed out homes you don't want to see etc. We did our own research on-line and went to open houses w/out a broker and therefore ended up making a deal w/out one.

If you've already found a house you want to make an offer on by yourselves, I don't see a point in bringing in a buyer's broker, you've done most of the hard work! If you have an attorney, that should be the person looking after your interests, walking you through the steps.

When you are negotiating w/ the seller a buyer's broker is really just a middle-person. You tell BB you want to offer $200K, BB brings that to the table, SB says they want $250K, BB comes back to you etc. You should be able to negotiate directly with the selling broker.

I think a RE will tell you that you "need" a broker, but I really think it's not necessary.

Good luck!

[vludmilla]

I have some more thoughts this AM:

I think the benefit to using a buyer's agent is convenience in the search process. Having them weed out homes you don't want to see etc. We did our own research on-line and went to open houses w/out a broker and therefore ended up making a deal w/out one.

If you've already found a house you want to make an offer on by yourselves, I don't see a point in bringing in a buyer's broker, you've done most of the hard work! If you have an attorney, that should be the person looking after your interests, walking you through the steps.

When you are negotiating w/ the seller a buyer's broker is really just a middle-person. You tell BB you want to offer $200K, BB brings that to the table, SB says they want $250K, BB comes back to you etc. You should be able to negotiate directly with the selling broker.

Good luck!

This is us. We have done the research and legwork ourselves and I don't need a BB to show me things I've already learned on my own. I also don't want dual-agency, I just want the seller's broker to bring her commission down a bit to help me lower the cost of the house. I am also hoping that she will be more motivated to encourage the seller to accept our offer over any other offers from buyer's with their own agents.

Thanks so much for your feedback and letting me know it can be done!

One question: Do you have the seller's agent draw up a contract and then have your attorney review it or do you have your attorney get involved with the contract as soon as you make the offer?

[alien_host]

One question: Do you have the seller's agent draw up a contract and then have your attorney review it or do you have your attorney get involved with the contract as soon as you make the offer?

The seller's agent did the first draft of the purchase and sale agreement. Our attorney then reviewed it an added A LOT of things. The seller's agent drew up a pretty basic P&S (standard form) and our attorney added clauses etc to protect us. I think that's pretty standard practice. Our attorney went back and forth with the seller's attorney to iron out details once we were in P&S mode. The broker didn't even really get involved at that point b/c they wanted their attorney to handle it.

I'd get the attorney involved ASAP because they def. need some time to review the documents and ensure all is well.

Let me know if you have any other questions. Best of luck to you!

[vludmilla]

The seller's agent did the first draft of the purchase and sale agreement. Our attorney then reviewed it an added A LOT of things. The seller's agent drew up a pretty basic P&S (standard form) and our attorney added clauses etc to protect us. I think that's pretty standard practice. Our attorney went back and forth with the seller's attorney to iron out details once we were in P&S mode. The broker didn't even really get involved at that point b/c they wanted their attorney to handle it.

I'd get the attorney involved ASAP because they def. need some time to review the documents and ensure all is well.

Let me know if you have any other questions. Best of luck to you!

Thank you so much! I'll let you know how it goes if we buy the house.

[TwinFoxes]

OP, I think you may be buying in SF? Is that you? If you are, you might want to look into Redfin. Go to redfin.com The agency is kind of do it yourself, and they split the commission with you. 60 minutes did a piece on it, but it was during the boom. When we buy I think we're going to go through them. They aren't in all cities though. Even if you don't buy through them, check out their website, it's great for browsing houses.

[vludmilla]

OP, I think you may be buying in SF? Is that you? If you are, you might want to look into Redfin. Go to redfin.com The agency is kind of do it yourself, and they split the commission with you. 60 minutes did a piece on it, but it was during the boom. When we buy I think we're going to go through them. They aren't in all cities though. Even if you don't buy through them, check out their website, it's great for browsing houses.

Thanks! I'll check it out. I wish I was buying in SF, that would be great. I am buying in lower Westchester (NYC metro) where the prices have come down but are still astronomical