Will this approach to homebuying work?

Question

the more i think about it.. the more i wonder if the proper approach to buying a house is to find houses on my own and schedule walkthroughs for each house by contacting the listing agent for that house. if i like the house and want to put an offer on it, then i sign a buyers agency agreement with the listing agent that will terminate in the event the transaction fails.. the listing agent is then forced to act as a dual agent in the transaction, meaning that he/she cant represent the interests of seller over buyer or vice versa. since i rightfully question whether any exclusive buyers agent truly puts my best interest over their own in a real estate transaction, i believe the quality of representation i would receive from a "dual agent" over an exclusive buyers agent is essentially the same.

the advantage to this approach is that i am not bound to any long-term buyers agency agreements with one individual and that in any transaction, i am always able to compromise the quality of the listing agent's representation to the seller by forcing the listing agent into dual agency.

does that make sense?

the advantage to this approach is that i am not bound to any long-term buyers agency agreements with one individual and that in any transaction, i am always able to compromise the quality of the listing agent's representation to the seller by forcing the listing agent into dual agency.

does that make sense?

Mitch Kronowit · Answer

We tried this on the last home we purchased. I found the listing myself online and contacted the listing agent directly. Who showed up at the house for the showing? Her partner! When we decided to make an offer, we went to their office and discovered their brokerage didn't allow dual-agencies. So we ended up with her partner as our "buyers" agent. The agreement only applied to THAT one property for a finite period of time, so we weren't "locking" ourselves up with someone we didn't know and didn't like.

J Scott · Answer

Sorry Bill, but I think you're incorrect.

People buy and sell houses every single day without agency or legal representation (how do you think FSBO works?).

There is absolutely no law against it, and there is no governing body that is going to force a person to have an agent or representation in order to purchase real estate.

In fact, my standard state contract refers specifically to "unrepresented parties."  No need for that if it were illegal to represent yourself.

And the best evidence I have is that I've done it!!!

Jake Kucheck · Answer

Mitch,

To make that even dumber, I'm fairly certain that the "end run" that they did against their internal brokerage policy doesn't even technically eliminate dual agency.  Unless some attorney wants to prove me wrong, I'm fairly certain that dual agency exists when buyer and seller are represented by any two agents working for the same brokerage house.  So that agent and her partner were operating under dual agency anyway, whether they knew it or not.

But back to the OP's question- it really doesn't matter how you see a property or make an offer on a property, it matters how well you can execute a deal and whether or not the seller is motivated.  So... start doing more and start thinking less.

J Scott · Answer

This is unlikely to work the way you expect.  Most likely, the listing agent won't agree to dual agency, for one of several reasons:

1. The seller refuses to allow the agent to represent both of you;

2. The agent's broker doesn't allow dual agency;

3. The agent is uncomfortable with dual agency.

More than likely, the listing agent will either suggest that you find your own buyer's agent, represent yourself, or the agent will recommend another agent from his/her office to represent you (for a reduced commission since the deal is half done).

So, you need to decide whether representing yourself or having a random agent representing you is better than just finding a good buyer's agent.

In my opinion, it's not.

Rob Gillespie · Answer

Hi John,
Not a bad plan, The best way to get a deal, is to find a motivated seller! The great thing about agents is that most of them are broke and will work hard to close any deal they think they will get paid on! :mrgreen: good thinkin!!

Meredith Bright · Answer

We did that when we bought our house. It was a short sale and there multiple offers. We weren't able to find out what the other offers were, but I believe we got subtle guidance from the listing agent that helped us make a winning offer.

Steve Babiak · Answer

Actually, in the world of REO properties (where I do this sort of thing as you describe here), the listing agent will probably tell you that they represent the seller first and foremost, and that for you they are simply presenting an offer.

Think about it for a moment.  The REO listing agent depends on volume (quantity) of transactions, because the listing side on REO does not pay out the big commission percentages.  So, to keep getting lots of REO listings, that listing agent has to be very loyal to the seller.

So, I would not expect that a "dual agency" as you described would imply loyalty to the buyer.  Caveat emptor - let the buyer beware!

Bill Gulley · Answer

Hi, you can not represent yourself. You could sign a waiver of representation, but that is still not representing yourself. It's either a dual agency or it's not, and for not, you need another agency or an attorney. OP, good plan. That's what I do, except I really don'tadvise new investors doing that. Good luck!

Brian P. · Answer

Jake was 100% right in California it is a dual agency.

And the good news is in an undisclosed dual agency the agents commission need not be paid.

There is some money coming, ask for it! If they don't agree tell them the DRE and the courts will side with you and to check with their lawyer.

I'm sure the seller will like the news too.

Mitch Kronowit · Answer

Thanks Jake. That sounds right. Perhaps it was what J said, the seller required the listing and buyers agent to be different people. And to further complicate matters, I am 99% certain our two agents were in a personal relationship as well. IOW, they weren't only partners at work.

In any case, I always treated the situation as a dual-agency anyways, no matter how they tried to spin it. As far as I was concerned, it was one agent in two bodies... two UGLY bodies.

Will this approach to homebuying work?

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