I am always amazed when I hear about a Buyer who has decided to go it alone in a real estate transaction. It's such a bad idea on several fronts that I shudder when I think about it. And yet it happens. Probably the worst part of the whole idea is the Buyer thinks they know so much they don't need a REALTOR. I can assure you most people don't know enough to represent themselves in a real estate transaction. In a way it would be like representing yourself in court. Intelligent people would not choose to do this for obvious reasons. However, people can and do convince themselves this is a good idea because hey, it happens on TV, or they have a friend who did it, or even better, a friend of a friend did it, and it worked out, and they saved a ton of money. Yeah, right!
I think the number one motivating reason that Buyers decide to go unrepresented in a real estate transaction is because they think they will somehow save some money. They believe that maybe the Seller will shave off the Buyer's Agent fee if the Buyer's Agent doesn't exist. This logic is incorrect. You need to understand it doesn't happen this way. What really happens is you don't get representation and the Seller's Agent gets the entire fee instead of only half. A lot of Sellers' Agents love it when this happens...money, money, money. The smart ones, however, will refuse to let the unrepresented Buyer go unrepresented in a transaction to be cautious because they know better.
Here is what the Law of Agency says (Texas) and why you are making a very bad decision to be an unrepresented Buyer with no signed Buyer's Representation Agreement in place in a real estate transaction: Pure and simple, the Agent for the Seller is in a fiduciary relationship with the Seller - not with you Mr. or Ms. Unrepresented Buyer. The Seller's Agent is not your friend; I don't care how sweet she was at the Open House. The Seller's Agent has a legally binding, signed document with the Seller and her interests lie with the Seller only. So while you are chit-chatting it up with the Seller's Agent and telling her where you work, and why you are moving, and why you love a particular neighborhood, school or house...you know, establishing that rapport, (gosh, she is so nice!) really what you have done is given away all your bargaining chips.
The Seller's Agent has a duty to report everything you say to her client, thus compromising your ability to negotiate a fair and reasonable price. It actually gets worse, say you have an Agent showing you around, but you do not have a signed Buyer Representation Agreement in place, guess what...that Agent is considered a "sub-agent" of the Seller, and technically speaking is bound to be loyal to the Seller until there is a signed agreement in place between you and your Agent.
Buyers need to understand that Buyer Representation was created for a reason. A Buyer's Agent has a fiduciary duty to her Buyer and will protect confidential information from the Seller and negotiate on the Buyer's behalf. In my opinion, you are making a big mistake by choosing not to have formal representation in a real estate transaction. Look at it this way, if the Seller is represented, and the Seller is paying for you to be represented, why would you choose not to be represented? Believe me when I tell you that you do not know enough to represent yourself in a real estate transaction unless you hold a real estate license - no exceptions.
Janet Cloudt is a licensed real estate agent in Austin, Texas. She is affiliated with Keller Williams Realty and is the founder of Home Sweet Home Austin, homesweethomeaustin.com homesweethomeaustin.com
Janet has earned the prestigious GRI designation and the CLHMS designation, and she is a member of the Keller Williams Luxury Homes Division. In a city where there are approximately 10,000 realtors, Janet prides herself in offering her clients old-fashioned service, high integrity and friendly service. Her website is quickly becoming a "go to" place for COMMUNITY information and she invites others to blog about the best of Austin.
No comments:
Post a Comment