Listing agent perspective on Unrepresented Buyer sale

It’s been about 30 days since the buyer rule has happened, I thought I would give an update. I am a Realtor, and I primarily work as a listing agent, it’s probably 80% of all transactions. I stay very busy to the point where I don’t advertise myself, It’s all word-of-mouth. I close about 110 properties a year, roughly $20 million. I live in an affordable area so I encounter a lot of first-time buyers.

The listing agreement is signed first. I’ve decided I will not act as a dual agent on any transaction from here on out. I want to be able to represent the seller to the best of my ability, as they are still the one who is paying all of my commission, and sought me out first. I charge two different rates, what I charge to list, and what I charge to list and have an unrepresented buyer and perform the ministerial duties needed.

The first transaction with an unrepresented buyer is getting ready to close. I’m seeing there are so many ways this thing can go sideways. At the start, I had my transaction coordinator go ahead and send out the email that outlines all of the dates and deadlines, and then since they’re unrepresented, they took it from there. I CC’d the title company and lender (we are not an attorney state) and made sure they had buyers info for the transaction.

The actual contract negotiation was extremely one-sided, because the buyer told me they had to move fast and they really liked the property. The preapproval they sent was for 100k more than the purchase price, so we countered back full price no closing cost, and they took it.

The buyer missed the earnest money deposit deadline by 3 days. Don’t drop that in the mail! Seller could have kicked the contract but decided to give time instead. Buyer ordered a home inspection, completely ignoring the septic, well, gas, termite, radon. Cool, very easy negotiation for my seller.

They called me panicked about insurance. That deadline is passed so they are now getting whatever insurance they can. Financing deadline is passed, so earnest money is now nonrefundable. On the counter offer I told the seller let’s double it and tighten it up.

Didn’t order a survey.

Didn’t add the HOA rider.

Missed or didn’t care the roof has 2-5 years of life left so didn’t ask for that.

All of these things add up to be far more than the 2.5-3% a buyers agent charges around here. Seller was counting on paying that, pretty happy they saved 1.5%. While it was not a ton of additional work on my side, it IS a lot of liability. On the next one, what happens if buyer missed the earnest money deadline, and the seller decides to kick the contract out, then the buyer gets upset that I didn’t remind them a second time to deposit the check in person? Or when they send me the inspection report and I see several large items that they didn’t ask for, it’s not my responsibility to guide them. I can already see a disgruntled buyer starting a lawsuit for me doing my job, which is to represent the seller interests only.

I have two more that are currently under contract where I’m representing the seller and buyer is unrepresented, I will be curious to see if buyer unforced errors like this continue.

From my perspective - which is one where I actually make MORE money if the buyer is unrepresented - please, please hire a competent agent to represent you. There is no reason a first time buyer should attempt this in an effort to “save” money.

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unrepresented buyer as a first time home buyer is a recipe for disaster. You’ll find out that unrepresented buyers who have gone through this process, will be more advantageous to the seller (removal of another party needing to be compensated).

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I suppose the ultimate for seller advantage is someone who is on their second home purchase, but the first home purchase was like 1 year prior. I learned a ton in my first 5 years of ownership, seeing what maintenance items came up and how expensive some of those things can become if you want them done properly.

Someone familiar with the process but without much experience maintaining a home may not have the same level of concern about some deficiencies or aging items.

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If they really liked the property and had to move fast maybe they didn’t care about the roof or all the other inspections they had to do.

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Everyone on RealityEnclave who is advocating to go unrepresented, use an attorney and use the listing agent, save 3% to “unlock a door” I’m laying out the actual reality of making that choice. The seller IS saving a bit of money on commissions, a lot more on the buyer not knowing anything. $0 of that savings is getting passed to the buyer. It might sound like I’m boasting, but I’m just doing my job.

A buyers agent does way more than unlock the door, that is what the buyers are not understanding. They are losing fiduciary representation on what is probably the biggest transaction of their life to date.

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Everyone thinks they are smart enough and a good enough negotiator to do it. Some may definitely be, but a lot of people are not as good as they think.

I suspect that sellers are going to make the same amount of money they made or more and a lot of buyers are going to get screwed. I don’t see this somehow lowering the price of a house for people.

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This house happened to appraise just fine with no predications. But I can just imagine a situation where the appraiser says the value is 15k under, or they want the deck to be stained. The lender gets the appraisal so hopefully they clue the buyer in that there’s issues. But again, unless the buyer knows that that will keep them from funding the loan and takes appropriate steps to have it remedied, there’s nothing on my end I can do. I cannot give them advice or represent them. I am letting a seller know that there’s a much greater chance this deal will fall apart because of the lack of knowledge and procedures so it is an additional risk they’re taking even if they’re saving some commission.

Walk-through will be happening soon, and I’m literally unlocking the door and then having them sign the notice that says they’re satisfied with everything. I can’t give advice.

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Exactly. The best offer is not the highest offer but the one most likely to make it to the closing table as close to the agreed upon price as possible

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