What I would like the unrepresented homebuyer to know

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 cringe when I think about it. And yet it happens. Probably the worst part of the whole idea is that the Buyer thinks he knows so much that he doesn’t need a REALTOR. I can assure you that most people do not know enough to represent themselves in a real estate transaction. In a way, it would be like representing yourself in court. Smart people wouldn’t choose to do this for obvious reasons. However, people can and do convince themselves that it’s a good idea because it happens on TV, or they have a friend who did it, or even better, a friend of a friend did it, it worked, and they were saved. a ton of money Yeah sure!

I think the main reason buyers choose not to be represented in a real estate transaction is because they believe they will somehow save some money. They believe that maybe the Seller will reduce the Buyer’s Agent fee if the Buyer’s Agent does not exist. This logic is wrong. You have to understand that it doesn’t happen this way. What really happens is that you don’t get representation and the seller’s agent gets the full fee instead of just half. Many sellers’ agents love it when this happens…money, money, money. The smart ones, however, will refuse to allow the Unrepresented Buyer to go unrepresented in a transaction so be cautious because they know better.

This is what the Agency Law (Texas) says and why you are making a very poor decision to be an Unrepresented Buyer and without a signed Buyer Representation Agreement in place in a real estate transaction: Pure and simple, the Seller’s Agent is in a fiduciary relationship with Seller, not with you, Mr. or Mrs. 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 signed legally binding document with the Seller and his interests lie solely with the Seller. So as you chat with the seller’s agent and tell them where you work, why you’re moving, and why you love a particular neighborhood, school, or house… you know, building that rapport (OMG, she’s so kind!) What you’ve actually done is give away all your trading chips.

The Seller’s Agent has a duty to report everything you say to your customer, thereby compromising your ability to negotiate a fair and reasonable price. In fact, it gets worse, let’s say you have an Agent showing you around, but you don’t have a signed Buyer Representation Agreement, guess what… that Agent is considered a “sub-agent” of the Seller, and technically speaking is required to be loyal to Seller until there is a signed agreement between you and your Agent.

Buyers should understand that the Buyer Representation was created for a reason. A Buyer’s Agent owes a fiduciary duty to their Buyer and will protect Seller’s confidential information and deal on Buyer’s behalf. In my opinion, you are making a huge 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 don’t know enough to represent yourself in a real estate transaction unless you have a real estate license, no exceptions.