All Forum Posts by: Shane H.

I haven't been an agent that long but I've had unrepresented buyers buy a few of my other listings too. Not one of them got a better deal for themselves by not having their own agent (some may have thought that they did, but they didn't). Just some examples of how I've seen unrepresented buyers screw up royally: 

1. Getting stuck with closing costs that the seller normally pays (common).

2. Checking most recent tax year for tax prorations, instead of most recent mill levy (big difference since taxes went up 30-35% last year, $10k screw up I saw in real life by a buyer last year)

3. Missing deadlines (I had an unrepped buyer miss their inspection deadline then ask for a bunch of inspection item concessions after it had passed. Sorry, too late! If you has a buyer's agent you wouldn't have missed that critical deadline.) An agent I know had an unrepped buyer on one of their listings who didn't set up their wire in time for closing, went into default on the contract, and they had a backup buyer who scooped in and bought the property instead. First buyer lost the property and their EM. Buyers agent would have let them know they need to set up the wire well in advance to avoid this.   

3. Not putting the right contingencies in their offer to protect themselves.

4. Not adding the right additional provisions (for example that the seller can't sign a new lease with the tenant prior to closing, I saw this happen and buyer was stuck with a tenant who the seller was friends with, paying way below market rent for 3 years lol). 

5. Saw this one too: buyer's wife bought a new luxury car the day before closing and the car salesman convinced her to finance it, disqualifying them for their loan and making them unable to close, final loan contingency had passed so the EM was split between listing agent and seller. 

6. Wiring money to a scammer overseas instead of the actual owner of the property (this one is getting more and more common, the "seller" steals the identity of the actual seller, and takes the buyers money then disappears). I just protected a buyer from this one recently when they brought me in on their deal with no agents involved as a consultant for a second set of eyes on everything just before closing. The identity theft was pretty elaborate and had gotten all the way through title. Some red flags alerted me because I have seen this scam a ton recently. They would have wired the money to a fake seller. This actually happens a lot! 

A good buyer's agent would have prevented all of the above (good being the operative word). The biggest mistake I see unrepped buyers make though is just not being able to get their offer accepted to begin with because they don't even know where to begin. They usually just send something via email or verbally over the phone that is not even a real offer, no proof of funds or pre-approval letter or anything and just expect the listing agent to do their work for them. Meanwhile someone else with a real offer and a buyer's agent who knows what they're actually doing get's the property locked up. 

I'm glad this approach works for you but you are the exception because 99.9% of buyers haven't done enough deals to do this successfully in my experience. Dual agency is illegal here also, so if a buyer wants to offer on one of my listings, my only fiduciary duty is to my seller and the buyer is getting the short end of the stick because I've done this many times and they have not (must treat the buyer with honesty as a customer, but don't have to point out their mistakes to them). Unrepped buyers are also much less likely to actually close, and the risk of litigation is higher IME. 

@James Wise

I’ve bought 27 houses using the seller’s agent. I’ll continue.

If an investor doesn't know enough about real estate to navigate through a purchase, that investor probably isn't ready to buy a property as an investment. We should all be using Option B or C. 

Unfortunately the first time/inexperienced retail buyers who actually need a buyer's agent, are the ones who most likely won't be able to afford one. 

I think the whole thing is irrelevant. Prices aren’t going to go down. Are you seriously going to list a house for 145,500 instead of 150k because of this? Lol I expect an increase in overall cost. The only way it’s going to drive prices down is if buyers agents (like all of them not just one here or there) encourage buyers to make offers accordingly. I don’t see it… the fact of the matter is that buyers have always paid both sides of the fees. That hasn’t changed. This situation is the equivalent of a store listing sales tax in the price one day and not the next. Except in real estate the price is already so murky it won’t be as noticeable. 

I think the whole thing is irrelevant. Prices aren’t going to go down. Are you seriously going to list a house for 145,500 instead of 150k because of this? Lol I expect an increase in overall cost. The only way it’s going to drive prices down is if buyers agents (like all of them not just one here or there) encourage buyers to make offers accordingly. I don’t see it… the fact of the matter is that buyers have always paid both sides of the fees. That hasn’t changed. This situation is the equivalent of a store listing sales tax in the price one day and not the next. Except in real estate the price is already so murky it won’t be as noticeable.