In the turbulent Princeton real estate market there are new things happening - some (like real estate prices) could be confusing, and some - are a bit puzzling. I am talking about a phenomenon of an unrepresented buyer. This type of buyer does their research on the Internet and contacts, for the properties they want to see, respective listing agents. They do not want to be represented by the listing agent (as a dual agent) or by any buyer’s agent. They want the part of the commission that would have otherwise been paid to the buyer’s agent, to be “credited” to the seller. The net effect of which, in the buyer's mind, is that they can offer less, and thus they would save a lot of money.
Assuming that the listing broker agrees to such an arrangement, what are the implications for these buyers? Is this a strategy for saving big or big losing?
This strategy could possibly work, provided these buyers have legal representation (and their legal rights are protected). The question is when could it work? The short answer: when a lot more human intelligence becomes publicly available. Here is a bit of a longer list of requirements.
The opinion on the price of the home is available from a public source. There is no such source now. Zillow, Trulia, Realtor.com, do not provide information on what makes one home more or less valuable then the other, or why a particular house on the same street sold for much more, or much less.
1. The opinion on the amount of the offer that will produce the positive outcome for the buyer is available from a public source.
2. The understanding of the inspection results for each property and the implications for the buyer are available from the public source.
3. The negotiation tactics for each property are available from a public source.
4. The ability to deal with the unexpected issues that can arise at any point in the transaction, including closing is available from a public source.
I am concerned that you as a buyer without representation, are not an equal match to the seller, with representation. Without needed intelligence available on the Internet, or from other public source, the buyers would have to do the best they know how. I am concerned it may not be "good enough", and that the potential “savings” could easily translate into big losses - financial, emotional, or both.
There are people who choose to represent themselves in court, some who are even facing imprisonment. I am not sure how many win. I know many lose. In this country it’s illegal to practice law without a license. It’s perfectly legal, though, to put oneself in jeopardy, doing it on their behalf.
The same holds true for real estate; thankfully for the buyers - their liberty is not at stake.
One of the goals of the Princeton Real Estate Blog is to make a lot of the information, previously not available to home buyers and sellers, accessible at their own time and convenience. Here are some articles that could be of interest.
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Copyright 2007 Faina Sechzer All rights reserved. This information cannot be copied, reproduced, transmitted, distributed, displayed or published.