Real Estate

Buying a home WITHOUT an agent

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  • Mar 14th, 2016 2:25 am
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[OP]
Jr. Member
Feb 15, 2016
130 posts
5 upvotes

Buying a home WITHOUT an agent

after having a terrible experience, with s real estate agent, I have decided to buy a home with out a Buyer agent and just deal with the Seller agent.
Could you please advise what are the pros and cons of this decision?
23 replies
Deal Addict
May 4, 2014
4395 posts
5179 upvotes
Toronto, ON
That's not buying without an agent. The selling agent most likely won't be willing to deal with you.

It will just end up being the selling agent will also act as your buying agent and cash in on both commissions. But note that they are obliged to treat their seller as their client and everything will be in the best interest for the seller. You will only be treated as their customer.
Deal Addict
Aug 30, 2011
3454 posts
1210 upvotes
Ottawa
^ what er34er34 said.

Post this in the Real Estate forum, or search that forum for this topic. It has been discussed ad nauseum.
Deal Addict
Feb 5, 2009
2809 posts
928 upvotes
Newmarket
er34er34 wrote: That's not buying without an agent. The selling agent most likely won't be willing to deal with you.

It will just end up being the selling agent will also act as your buying agent and cash in on both commissions. But note that they are obliged to treat their seller as their client and everything will be in the best interest for the seller. You will only be treated as their customer.
I wish this was the truth, unfortunately not so. Everything will be done in the best interest of the agent not the seller. Some agents may not do double representation, however majority will be more than happy to pocket double commission, and in fact many prefer the buyer without agent just for that reason, for that reason the buyer may actually have a better chance of getting the property. Speaking from my own experience as non represented buyer on two occassions.
Deal Guru
User avatar
Mar 9, 2007
13031 posts
7976 upvotes
Think of the Childre…
Cons: Agent's has kids to feed too! If everyone were to buy houses/condos without an agent, think of their children!!

WOULD SOMEBODY THINK OF THE CHILDREN!!!
Jr. Member
Nov 4, 2008
178 posts
18 upvotes
vaughan
we bought without an agent.
it was a winter market and our offer was lower than asking.
she tried to push us, no luck, then she offered 10k reduction to the seller (from her double end commission) and it worked win/win
[OP]
Jr. Member
Feb 15, 2016
130 posts
5 upvotes
Pushing us to buy a house
Refused to negotiate a lower price
So much nuisance!
dynasty2000 wrote: what was the issue with the agent?
Deal Addict
Jun 29, 2007
4675 posts
1352 upvotes
Homerhomer wrote: I wish this was the truth, unfortunately not so. Everything will be done in the best interest of the agent not the seller. Some agents may not do double representation, however majority will be more than happy to pocket double commission, and in fact many prefer the buyer without agent just for that reason, for that reason the buyer may actually have a better chance of getting the property. Speaking from my own experience as non represented buyer on two occassions.
Totally agree.
Deal Addict
Mar 27, 2004
4279 posts
1870 upvotes
Toronto
Listen, you have to understand the listing agreement has a total % that the seller is paying and that there is a portion that goes to the COOP agent. If you go in without an agent, you are just letting the Listing Agent represent you as well. The Listing agent will take the entire amount that the Seller was willing to pay already. This idea that you can save money under this scenario that the OP is saying is completely wishful thinking. Just find a better buyer agent.
Full-time Realtor
Sr. Member
Feb 26, 2016
934 posts
211 upvotes
Vaughan
I bought my house without a real estate agent. The seller posted on ComFree and we contacted them. We offered them 10K less than asking but they were firm at their asking price. I think if we played hardball, we could have got it at 10K less since we didn't have an agent and they were selling without one too. They were essentially saving huge in real estate commissions and most buyers come in with real estate agents since the seller pays for the agent fees on both sides anyway. In the end, my wife really wanted the house. We were expecting and we needed to move, so we decided to give them asking which was within market value.

Personally, I think agents are getting paid way too much. Taking a 2.5% cut when houses are selling northward of 500K is ridiculous. At 500K, the seller has to pay commissions of 25K in total to both sides. And these days, you can't get anything for 500K. In your case, assuming that you're "just" buying, it's not something you have to worry about since you'll just pay the negotiated price and the seller takes care of the agent fees.

Here are some things you need to be aware of if you are not using an agent:

1) Be confident that you know how to negotiate and make sure you know market value; I signed up for daily e-mails at http://torealestatesold.com (it used to be free but I think they charge a nominal fee now). After signing up, they sent me daily sales in all areas of the GTA with the listing and selling price. I could easily gauge what market value was. Relying on MLS wasn't enough since sometimes a house would ask well below asking and then sell way over or the other way around. This website gave me a much more accurate look at market price. I think it's a scam that only real estate agents get access to this information in the past. I feel that consumers are just put at a disadvantage and for that reason, most buyers really don't have a clue of the true market value.

2) If the selling agent knows how to do business, he won't be greedy. He'll hit the seller with less commissions overall and therefore, there should be be more wiggle room in the price because the seller can technically sell for less but still net at the same amount. Unfortunately, a lot of agents are greedy and want to dab at both the agent fees. This is unfortunate for the seller but you won't be aware of their deal (at least during negotiations) anyway. It's just good to be mindful of this since you could leverage of this during negotiations.

3) Even if the selling agent acts for the buyer and seller, there's obviously a conflict of interest and in my opinion, they are truly still representing the seller and not you. Therefore, make sure you are fully aware of everything that is written in the offer letter and everything that could possibly be omitted. Personally, the agent could draft it but I wouldn't have full faith in it. At the end, it's your real estate lawyer that covers your butt. Make sure you know everything that's outlined on the contract and make sure your lawyer takes a look at it before you submit your offer letter. Make sure you are fully aware of all the clauses and make sure everything the seller says is included in the deal is outlined in the offer letter. Therefore, make sure you find a real estate lawyer before you go through this process!

4) Make sure you know all the clauses that are available to protect yourself. This goes back to the offer letter... Financing Clause, Home Inspection, etc.

Overall my experience without agents was great. I dealt with the seller directly and we weren't playing broken telephone. I would definitely buy and/or sell without an agent again.
Member
Mar 3, 2016
387 posts
234 upvotes
abcde12345 wrote: after having a terrible experience, with s real estate agent, I have decided to buy a home with out a Buyer agent and just deal with the Seller agent.
Could you please advise what are the pros and cons of this decision?
I think it's always good to have a buyer's agent on the side in case there is a seller's agent on the other side who is just looking to pocket all the commissions when there is no buyer's agent. At least get one of those cash back buyer's agents; there are quite many who take 1% and give you back the other 1.5%. Of course, it won't be a full service as they say themselves.

I bought without an agent mainly because the seller didn't have an agent. Had the seller had an agent, I would have gotten one too. Basically, make a deal with one telling them you will contact them once you find a house and they will just do the offer, paperwork and maybe some negotiation. They don't need to drive you to houses and do any search for you so they will most likely agree for a cash back, and they better do since they won't be doing the searching. For these agents, something is better than nothing. They will want you to sign the buyer's agreement. Say no and tell them you will sign this only for the house they will do the paperwork and offer. Make sure the cashback agreement is also in the agreement. You better have that in writing. However, you will need a good real estate lawyer with or without an agent, so get a good one who can draft offers in case you go for a house without an agent. I had one who took $200 to do the offers and review counteroffers. They have better knowledge to explain the conditions of the agreement, probably better than agents. Of course, you will also have to pay them their fees when they'll do the closing later on (around $1,500). Prepare to do lots of reading online to know about houses on the market, the buying process and negotiation tactics. Don't expect to sit down and do nothing.

Ideally, if you can find a seller without an agent, that would be the best situation. So sign up for instant alert on those FSBO websites (Comfree, Propertyguys, forsalebyowner, etc..). Better yet, go knock on doors of houses you think might be good for you. Trust me, if there are agents involved, it's the buyer who ultimately is paying for these commissions since the seller will just include the 5-6% commission in the price and will factor this in the negotiation. Worst, most buyers are borrowing money (mortgage) and paying interest to pay those commissions without realizing it. So it is in YOUR best interest to find a seller without an agent. However, if you can't and the house than you want has one, get an agent who will only work for that house only. Be firm on this although they will use all kinds of sale tactics to let them search all houses for you so that they get full commission, which you will ultimately pay.

One final piece of advice: Don't fall in love with a house. It's just a house, all building materials that can be used to build another house somewhere else, which you will ultimately leave here when you die. So in case you can't get a house you like, know that you will find another one like that somewhere else, Canada is big enough for this. Do expect the last minute tactics by sellers, telling you there are other offers on the table now so as to get you to offer higher. It may be true but most likely it's not. Maybe they have just asked a cousin or uncle to submit a higher offer which won't go through in case you don't go higher. It's not a phantom offer but it's not really a legitimate offer either. Be firm and stay put. Often that seller or their agent is just lying although this is illegal as per recent legislation changes. In a bidding war, the buyer is the ultimately loser, at least financially. However, sometimes there is no war to fight, although the seller might make you to believe there is one.
Deal Addict
Dec 28, 2007
4418 posts
2855 upvotes
Homerhomer wrote: I wish this was the truth, unfortunately not so. Everything will be done in the best interest of the agent not the seller. Some agents may not do double representation, however majority will be more than happy to pocket double commission, and in fact many prefer the buyer without agent just for that reason, for that reason the buyer may actually have a better chance of getting the property. Speaking from my own experience as non represented buyer on two occassions.
I have the same experience. +1
Deal Fanatic
Jul 3, 2011
5733 posts
2904 upvotes
Thornhill
Homerhomer wrote: I wish this was the truth, unfortunately not so. Everything will be done in the best interest of the agent not the seller.
Here's the thing with that - if it's done in the best interests of the agent and not the seller, it's certainly not done in the best interests of the buyer either which means using the listing Realtor to have a better chance at getting the house isn't a win for the buyer. The only thing they get is the house and the consequences of their choosing to engage someone who's only looking out for themself is going to be more than any perceived savings.

I can never stress this enough, always get representation separate from the other party in the form of a Realtor or lawyer.
Deal Addict
Feb 5, 2009
2809 posts
928 upvotes
Newmarket
licenced wrote:
I can never stress this enough, always get representation separate from the other party in the form of a Realtor or lawyer.
I can understand your point of view, and fully agree, in theory that's how it should be and is with lawyers, sadly real estate industry has worked tiresly over the decades to tarnish it's image, succeeded, and sufficient number of members continue to act in unethical and selfish manner, enough to cast doubts on the whole industry and the honest agents who truly act in the best interest of the poeple they represent . The board had years to change the double representation rule but has done nothing about and is happy to allow the agents to act in a conflict of interest situations.
Furthermore buying and selling is really no rocket science, I really don't see what's there to represent,

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