There are those that believe that they don't need a real estate agent. Usually it is a seller that decides they they don't need a real estate agent. They want to avoid paying real estate commissions, at least on the listing agent side. In Connecticut, when we represent a buyer in FSBO transaction, we cannot assist the seller. Point blank.
I did put in an offer on behalf of a buyer with a FSBO seller. The seller wanted my advice, yet I couldn't give it. It was like someone tying my hands behind my back and asking me to talk.
The seller was a busy physician, she couldn't respond in a timely fashion to my calls, she was flustered that I couldn't help her at all, she would have questions that I couldn't assist her with. "I'm a doctor, what do I know about selling a house"? I wanted to say... then why ARE you trying to sell it on your own? I didn't... we were in the middle of negotiations... The deal fell apart early on and quite honestly, in this particular case, I was relieved.
But what about an unrepresented buyer?
How does this happen? A buyer will go to a listing agent and want to see the property. In Connecticut we can show any listings that belong to our broker without a Buyer Broker Agreement. After seeing the home the buyer decides to put in an offer. And they decide they don't need any representation by a real estate agent.
What does this mean to the transaction?
In the words of Judith Johannsen, Assistant Counsel for the Connecticut Association of Realtors®, Inc.
"Here are two basic rules to remember when buying a home. First, a buyer with representation will have an educated ally who can help him understand how to form and negotiate an offer and how to navigate the financing and inspection processes. Second, the unrepresented buyer is on his own." (you can read the full text of her explanation here, it is very good)
I have had occasion to work with an unrepresented buyer on the sale of a property. And it was a case where representation was badly needed, but there was nothing I could do about it. I knew the buyer wanted the home, it was in the best interest of my seller for the purchase to go through, BUT THE BUYER WAS ON HIS OWN! And it was complicated, there were... impediments to the sale. At every juncture, questions would arise on the part of the buyer. Questions I could have answered, advice could have been given, but.... THE BUYER WAS ON HIS OWN.
A buyer in a real estate transaction in Connecticut who elects to have representation will have to enter into a contract, the Buyer Broker Agreement. In very simple terms, the contract says I will do my best to find you the house that fits your parameters, and assist you with the purchase of the home. You agree only to work with me. You also understand that the seller will pay my commissions. But in the event the seller refuses to, or cannot pay my commission, my broker will look to you to pay the commission due. And that is the part most buyers find hard to swallow. I can only say, I don't work for free. We do our best to know ahead of time if the seller won't have the funds to pay the commission, it would not be a common occurrence that it would suddenly be a surprise at the closing table. But it is in the Buyer Broker Agreement.
And without the Buyer Broker Agreement, I cannot represent you! I break license law, the seller doesn't have to pay me any commission, and I could get in trouble with the CT Real Estate Commission. My license is my livelihood, I am not risking it for anyone!
So if that bothers you and you decide to go it alone, just remember, YOU ARE ON YOUR OWN. I work for the seller, and the seller alone. I cannot assist you in any way, shape or form. As a matter of fact, it is my job as the listing agent to GET THE BEST PRICE POSSIBLE FOR MY CLIENTS, and it very well may be at your expense.
If you are refusing to enter into a Buyer Broker Agreement with me because you don't want to participate in what we call Dual Agency, I can accept and understand that. For your own good, please stop all communications and get yourself representation at another real estate firm! I want you to be represented, really I do. The sale will go much smoother for all concerned.
Otherwise, best of luck... yer on yer own!
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