# No buyer's representation, how does this save me money?



## farmerbrian (Aug 29, 2009)

I want to purchase property without using buyers representation. I have a ton to learn but I'm willing and able to do all the legwork. 

What I'm not so sure about it how this will actually save me money. My understanding (and please expand/correct if needed) is a seller's agent gets a commission for selling a property. If a buyer's agent is involved in the transaction the two agents split the commission in some way. 

So if I choose to not use a buyer's agent how does that half of the commission end up in my pocket and not the selling agent's?


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## Scott SW Ohio (Sep 20, 2003)

I think you are correct - you won't save money.

I used to think that dealing directly with the listing agent would motivate that agent to lobby the seller to accept my offer. After all, agents get more commission if they represent buyer and seller. But having tried that, I don't think it works. Now I usually use a buyer's agent that I trust.


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## jill.costello (Aug 18, 2004)

What it does is give you a BARGAINING TOOL; you are basically saying, "hey, selling agent! Convince your buyer to sell to ME at a lower price because YOU are getting the full 6% commission by doing business with ME instead of having to split it with my agent!!" Sometimes, the Seller's Agent will tell the seller, "Hey, if you accept their offer, I will REDUCE my commission to 4%!!!" That seller's agent is still getting 1% more than they would've had you brought your agent to the table.


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## farmerbrian (Aug 29, 2009)

Jill, is something I should just come right out and say to the selling agent or is it assumed since im calling them directly there is no buyers agent.


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## legacy (Oct 16, 2005)

Oh Boy. There's a lot wrong here. At least in Tennessee.

First of all, when you contact an agent to look for a piece of property, you need to undrstand that ALL AGENTS ARE REPESENTING THE SELLER unless they have been specifically hired as a BUYERS AGENT, and that needs to be in a contract.

Any time there are two agents involved, they are going to split the commission, which is paid by whom? The seller, of course! That's because both agents are representing the seller! Most people don't understand that. 

The only time an agent is not representing a seller is when the agent is expressly hired, by contract, as a "buyers agent," at which point the buyer of the property (technically) is paying a commission to _their_ agent, who supposedly is watching out for their interests, not the seller's.

This is why the real estate profession and the real estate market is so screwed up and so crooked.

Jill says:

""Hey, selling agent! Convince your buyer to sell to ME at a lower price because YOU are getting the full 6% commission by doing business with ME instead of having to split it with my agent!!"

Unfortunately, the way Jen says, is often the way it works, but what that means is that an agent (in the above case, the selling agent) is putting their interests above yours.

If your are a selling agent, you are supposed to be working on the seller's behalf and you should be working as hard as you can for the seller in getting the highest price for the property that you can, period.


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## legacy (Oct 16, 2005)

_I used to think that dealing directly with the listing agent would motivate that agent to lobby the seller to accept my offer. After all, agents get more commission if they *represent buyer and seller*. But having tried that, I don't think it works._

They can't represent both unless by contract. The agent IS ALWAYS REPRESENTING THE SELLER because that is who is paying them!

If you are a real estate agent, and you are looking to get sued, just try being a buyer's agent and a seller's agent at the same time. Very hard to represent both interests.

Scott, the reason that you can't expect a listing agent to be motivated "to lobby the seller to accept my offer" is because they shouldn't be lobbying for you in the first place. They are representing the seller. Essentially, you are expecting the agent to screw over their client.


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## sewserious (Apr 2, 2010)

By law, at least in the states where I have bought real estate, the seller's agent must disclose everything a buyer has told them to the seller. In other words, if you are working with the listing agent and tell said agent that you are willing to pay listing price if the buyer ends up demanding it, they HAVE to tell the seller that. Guess what you just did to yourself? After all, that agent repreents the seller.

On the other hand, a buyer's agent is looking out for you. They can advise you as to the best way to negotiate the sale, make sure inspections take place, and can legally represent you with other parties such as an inspector, etc. I bought a piece of property in one state while living in another. There is no way on earth I would have done that without have a buyer's agent on my side. That agent knew all the rules and regs for the state in which I was buying, gave me a list of several lawyers to pick from for closing, helped me find an inspector (needed one who would do swimming pools too, most don't), went back and forth with the seller's agent for us on some problems we found on inspection, etc. No way would I buy a piece of property (having bought two) without a buyer's agent and having used one both times.

The agents saved me money by using them, not the other way around.


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## farmerbrian (Aug 29, 2009)

> The agents saved me money by using them, not the other way around.


I know there is a lot of truth here, BUT....I have growing aversion to paying people for something I can reasonably do my self. The main way a see a buyers agent saving money is from their local expertise in pricing and negotiating. 

When we bought our first and only house we contracted with a buyers agent. He gave us quite a rundown on all he would do for us and then ended with "This wont cost you a dime, all we ask is your loyalty" That never sat right with me. If this guy was doing all this work for us ( and he was a great agent and did a substantial amount of legwork for us) how was it not costing me any money? 

The house we ended up buying was a for sale by owner. I found the ad for it online after the agent showed it to us, and it said something like "dont bring an agent and I will lower my price" . So there was my answer of how I am paying for the buying agents services. 

Properties with traditional selling agents involved confuses the situation for me though. If I the buyer dont bring yet another the person to hte closing table who wants money, how does a good portion of that money end up in my pocket? I believe all of you who say it simply doesnt and you're just better off using a buyers agent but I just wanted to feel this out some more and see if its really worth going through all this without my own agent.


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## farmerbrian (Aug 29, 2009)

> ""Hey, selling agent! Convince your buyer to sell to ME at a lower price because YOU are getting the full 6% commission by doing business with ME instead of having to split it with my agent!!"
> 
> Unfortunately, the way Jill says, is often the way it works, but what that means is that an agent (in the above case, the selling agent) is putting their interests above yours.


Oh BTW I have no illusions about a selling agent looking out for me the buyer at all. This was exactly the mindset in a selling agent that I wanted to confirm. 

No one has a stronger fiduciary duty to me than me.


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## sewserious (Apr 2, 2010)

farmerbrian said:


> I know there is a lot of truth here, BUT....I have growing aversion to paying people for something I can reasonably do my self. The main way a see a buyers agent saving money is from their local expertise in pricing and negotiating.
> 
> When we bought our first and only house we contracted with a buyers agent. He gave us quite a rundown on all he would do for us and then ended with "This wont cost you a dime, all we ask is your loyalty" That never sat right with me. If this guy was doing all this work for us ( and he was a great agent and did a substantial amount of legwork for us) how was it not costing me any money?
> 
> ...



The selling agent and the buyer's agent split the commission that is PAID by the seller. There is so much legal paperwork these days with buying a house that if you are not very, very careful, you can be had very, very easily! That can happen with a good real estate agent working for you too, but the chances are less likely. They know how the negotiating game is played and can help you determine what the true price of a house should be. They do a lot of homework/leg work that you don't have to do and are experts in the field. They know which paperwork has to be filled out by the seller and by you. They know when it has to be filed. Would you not hire an engineer to help you build a bridge?


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## jill.costello (Aug 18, 2004)

Y'all, I realise that what I said isn't the way it is SUPPOSED to work, BUT: If YOU, the buyer, are of average intelligence and have your eyes open, and know how to keep your mouth SHUT, then going into a real estate deal where the seller has an agent and you do not is not as "risky" as it sounds.

Just KNOW that anything you say to the seller's agent is going to go straight back to the seller (you can use this to your advantage). FYI, the seller's agent is NO dummy! The instant he realises you are not bringing an agent to the table with you, he will KNOW that all 6% is his. Now it's just a matter of how badly the sellers want to be rid of the property. They themselves may turn to their agent and make the "deal": "hey, my agent, would you pleeeeease drop your commision 1% so we can lower the price by 1% for this fine buyer?".

Yes, in a perfect world, the seller's agent would have a halo and angel's wings and more integrity than Mother Theresa, but since that is not the case, well....you get my drift.

I purchased my farm in Texas with no buyers agent; I looked around online, found a few properties I liked, contacted 4 different seller agents and said "I want to look at that little farm you have listed". They ALWAYS asked if I had a realtor. When I said "No", they saw $$$ and took me right out to see those farms! I made a POINT of chatting them up about how I was PRE-APPROVED, in no hurry to buy, and that's ALL I SAID.
So, after all my tours of the little farms, I knew which one I desperately wanted. So I made a really, really low offer on it, with all kinds of contingencies like "curtains must stay", "all brush piles must be burned", "fencing fixed", etc, etc, etc. I did this KNOWING that the seller's agent would be in their ears, saying, "I think she's a real contender; her financing is already approved, let's try to work with her.....".
Well, MOST sellers don't want the hassle of fixing things prior to closing, because if for some reason they DON'T close, they've done all that work for nothing, so in lieu of fixing stuff, they lower the price. Soooooo, I pretend that I won't go above a certain amount, they pretend they won't go below a certain amount, and THAT's when you say something innocent like, "If ONLY they'd come down another 2-3%, I would erase all the contingencies!"

Funny how things work out.......


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## edcopp (Oct 9, 2004)

farmerbrian said:


> I want to purchase property without using buyers representation. I have a ton to learn but I'm willing and able to do all the legwork.
> 
> What I'm not so sure about it how this will actually save me money. My understanding (and please expand/correct if needed) is a seller's agent gets a commission for selling a property. If a buyer's agent is involved in the transaction the two agents split the commission in some way.
> 
> So if I choose to not use a buyer's agent how does that half of the commission end up in my pocket and not the selling agent's?


Legally the half of the commission can not end up in your pocket. You may however be able to get the price reduced . A real estate commission can only be paid to a licensed real estate broker.


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## Deb862 (Jun 22, 2005)

I agree wholeheartedly with Jill on this one. We have been looking for a property for about 1-1/2 years now and are doing it on our own. Of course, this means that I do all the work that a buyer's agent SHOULD do for us. In actuality, we have tried to work with an agent before and numerous times have found I can handle things MUCH quicker and more efficiently myself (they don't call back for days, take forever to find info out, etc.) I asked one to get us some info and a tax map on a property and didn't hear from them for 2 days. They said the other agent never got back to them. I called the listing agent and had the info in 5 minutes!

I make sure I monitor the area MLS's like a hawk (probably more often than most agents LOL!) like 4-5 times a day and I'm often the first person to call on properties. Just by doing this for a long enough time, you will know just about as much info as any buyer's agent would on the area market and what properties are worth in your area. I also agree with Jill that whenever I directly have contacted a listing agent (which has probably been like hundreds of times) they ALWAYS are extremely responsive and eager to assist me. I know they are working for the seller but seriously, in reality they are working for THEMSELVES. As I stated above, many times when I had an agent contact the listing agent it took literally forever to get the information because teh listing agent DID NOT want to provide the information to the other agent because they knew they would then have to share the pie. 

Like Jill stated, if you are savy and do your research, etc., in my experience you will have a better time of things going it on your own. If on the other hand you do not have the time to invest in being your own "agent" then I would hire one that you trust.

Best of luck to you on your search!


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## jlrbhjmnc (May 2, 2010)

My experience agrees with Deb862. We are learning a new area where we will eventually buy. We get a LOT more information and education by grabbing a little time whenever we can to drive a particular section of our target area, look around and walk a property or two (don't forget the insect repellent!). We have gotten very comfortable with the county's online system and mapping software. We, too keep up with new listings, calling and emailing agents as things come on the market. We look at the MLS as well as those free real estate magazines, the local paper, word of mouth, etc. (Had a call back from an agent on a new listing this morning; that fellow was working hard for his seller...). I think farmerbrian's approach is smart, but we have to be aware of when we need a better-informed opinion or professional counsel. 

Now we have used a buyer's agent in the past, to good effect. We learned a lot about negotiating from one of them, but we really got our money's worth when she was our selling agent, lol. When we didn't know what we were doing on a buy, she taught us a lot, but looking back if we'd had more experience and information, we'd have paid less. When we sold, she kicked butt. Live and learn.


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## farmerbrian (Aug 29, 2009)

> I think farmerbrian's approach is smart, but we have to be aware of when we need a better-informed opinion or professional counsel.


You hit right there. 

I went to town hall yesterday to start doing some deed research and get all the maps I could on property I am interested in. One deed led to another to another to another, and by the fourth volume i pulled out of hte vault i just had that feeling of heavy doubt if this is something I want to work through on my own. 

The cost/risk/benefit ratios just dont quite add up for me to purchase my first piece of rural raw land with no professional guidance. 

A few months ago i met an old retired farmer turned Realtor. He runs a small operation and doesnt even use the MLS. I found him through a local RE flyer. He really impressed me with his local knowledge about everything from agriculture to gravel mining to land history. I gave him a ring last night and he said he would be more than happy to represent us as a buyer's agent. 

If the comfort level was there I would still prefer to do this on my own but I already feel a weight off of my shoulders knowing I have some outside knowledge to lean on. I still plan on learning as much as I can about the process and maybe the circumstances will be different next time. 

Thanks for everyone's advice.


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## Reauxman (Sep 14, 2002)

Wow. Reminds me of the time(a few months ago) that someone walked into the office with a written contract(on an office depot purchased contract, not even the required purchase agreement in the state) and asked that it be given to the LA on a property she had listed. In the comment section the "buyer"(used loosely) had stipulated that the commission be reduced to 3% and the remaineder be taken from the offer price, as a discount.

She was shown the door, with her "contract" in hand(we did get a copy of it to hang on the office board just to remind us why we are around!)


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## jill.costello (Aug 18, 2004)

Reauxman said:


> Wow. Reminds me of the time(a few months ago) that someone walked into the office with a written contract(on an office depot purchased contract, not even the required purchase agreement in the state) and asked that it be given to the LA on a property she had listed. In the comment section the "buyer"(used loosely) had stipulated that the commission be reduced to 3% and the remaineder be taken from the offer price, as a discount.
> 
> She was shown the door, with her "contract" in hand(we did get a copy of it to hang on the office board just to remind us why we are around!)


Too bad. She WAS a person with money. She could've been re-educated to your satisfaction and her own, perhaps.


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## ChristieAcres (Apr 11, 2009)

I am a licensed RE Agent in WA, have represented Sellers, Buyers, and done "Dual Representation." With a lot of what I read, I am in the low % of honest and also hard working ones.

When a property is listed, there is a Listing Agreement that is between the Seller and the Broker, with the Agent representing the Seller. The Commission % is on this contract. The Agent must have permission from the Broker AND also permission from the Seller, to change this Commission. I discount my Commission fees up front, with permission from my Broker. This Commission pays for the Seller Broker's Agent and also the Listing Broker's Agent. The Check at a Closing is remitted to the Listing Broker, who then sends a check to the Selling Broker. The Contract between Broker and Agent determine what each Agent receives.

So, when you go look to buy property, especially that which is listed? Your Buyer's Agent is already being paid for, has to carry a lot of liability, and should be knowledgeable. This Agent has a Fiduciary responsibility to the Buyer, NOT the Seller. This Agent is also not allowed to speak with the Seller, unless there is permission in writing (by both Listing Agent/Seller). So, what you should get is a hardworking Agent to get you the lowest price for your property that can be negotiated. As an Agent, who has seen some real nightmares occur? I will never buy a property without a Buyer's Agent representing me!

Some Listing Agents will offer Dual Representation. When I do this, I disclose to the Buyer that I will present their Offer, and write it up exactly as they wish. Here in WA, you can't have Offers contingent upon Commission reductions. Also, when I am asked to represent a Buyer, when I am the Listing Agent? I am legally not allowed to disclose anything to the Seller that the Buyer doesn't want me to. My job is to get the highest price for the Seller and the lowest price for the Buyer. How do I do this? By disclosing the asking price to the Buyer, by presenting their Offer (no matter how low), by allowing the Seller consideration without my advice on the price. When I have been asked what I think of an offer? My response is that it is the best my Buyer could present. I never advise a Seller takes an Offer that I have written up, but present the Offer. I am told by the Seller if he wants to accept the Offer or Counter it. I then follow his direction. I have been an Agent for five years and have never been sued. I am very careful when I offer Dual Representation! 

I hope all goes great for you farmerbrian!


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## wyld thang (Nov 16, 2005)

FB, we bought our place without a buyers agent. Mostly because my husband is an alpha type and was fed up with the "help" from the few buyers' agents we tried to use(which didn't want to show us properties we wanted to see anyways). WE got a special deal though--the place we got was cosmetically yucky(reeked of dogs, the only updates were some windows and a water softening system), was on the small side for a family home(1 bedroom 1500 a-frame cabin--people hate a-frames), the land was full of mature, crammed trees--nice timber on the hoof however. The seller was a wonderful curmudgeony old lady being forced into a nursing home by her son. She was VERY reluctant to sell and had the annoying angle(for her agent) of wanting to sell the property to someone who'd love it. 

Since the lady needed the money to fund the nursing home, and she liked us, we were able to work out a fair price(I mean, we tried to help her out too by not ridiculously lowballing), as well as she was able to help us out to buy the place since we were in the weird category for funding because we are self employed(we had the money, but self employed does not "look good" on paper). She agreed to pay the closing costs. I can't rememeber if her agent took the whole commission, but he sure didnt deserve it--he just wanted to wash his hands of the whole thing because it was a difficult property(I think he took the listing as a favor to the son). In fact at first he refused to show us the property, and we had to threaten him with reporting to the BB or some realestate governing board, then he rolled.

We did have a thorrough inspection by someone we hired. We had the lady fix a few things(like some rot on a wall, a rotten joist for the deck). Some money was put into escrow to remodel the electical pole hook up(there is an over head wire which was nto up to present code, but nothing was worn or bad)--we never got around to getting it fixed and the escrow money came to us(so I guess that's how we got the buyer commission). Other inspection issues were cosmetic or things we could fix ourselves with no big expense(like a corroded fitting). 

So, just saying we worked a lot with the seller--getting to know her, trying to be helpful to her. I also felt guilty becuase we were enabling her getting into the nursing home(which she died not long after). She was a wonderful interesting lady. She had written a book about her pioneer grandparents in Washington. It's not everyday you find an 80 year old lady living back in the woods by herself. Ha, another reason she gave in was because her dogs liked us  SHe said she trusted her dogs' judgement of character.

I know that whole situation is unique, but just saying if you talk with the seller, get to know their situation, make a "connection", maybe you can work out a deal to both your benefit. On the other hand there's a LOT of lazy tightwads out there who dont' give a flying leap they just want the money and no haggle.

Good luck!!!


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## Navotifarm (Dec 16, 2009)

As a person who is now approaching the age of wyldthang's seller, with a deep interest in having my land pass to an owner who will love and respect it as I do, I would much prefer to deal directly with prospective buyers than real estate agents. I actually took the realtor's course to learn what prospective agents are taught. We spent hours on the intricacies of condominiums but zero time on ecological concerns, land use, open air easements or any of the main things of concern to me as a responsible, caring land-owner. 
Real estate agents care about MONEY and how to get the most of it for the least time and effort invested. They work on commission. They can sell several tract homes in a subdivision with by-laws and guidelines. For a whole lot more money than they can for one rural property with a lot of quirks and individuality. 
When I was looking for my land, I never found one single agent with even a flicker of interest in bothering with me. In thinking about selling now, I find agents willing to take the listing so they can toss it into mls advertising where some other agents will do all the work but they get their fragmentary commission as listing agent. 
It is a good idea for you to hunt out all properties by any means you can devise that meet your needs and contact the seller directly. It is one thing to say the seller pays the agents' commission but hello, that $ comes out of the purchase price!
Sometimes there are real "flaws" with a property an agent would not want to touch with a ten foot pole such as unavailable electric power. Well, if the buyer wants solar power, that would be a plus, right?
As a starter in your search you might check obituaries and will books looking for property going into estate and then approach the heirs (or their lawyer if it's a recent death). Many properties change hands without real estate agents. For considerations other than or in addition to money. Hooray for the dogs who liked wyld thang!!! Smart critters! I sold a parcel to a guy my dog took a dislike to. My dog was right! I should have listened better! The guy was a drunk and tried to swindle me out of everything I had. Maybe if I had had an agent things would have gone better for me? Hard to say of course! No matter what, the more you learn the stronger your position will be. Maybe if you get your real estate license you can become a buyer broker. Represent your own interests and get commission or facsimile thereof, also!


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## ChristieAcres (Apr 11, 2009)

When a Listing Contract is written, there is a set Commission Rate. At the Closing the full amount of that Commission Rate is paid out of Seller's Net Proceeds. It doesn't matter how much money is put into the Escrow Account for repairs, an Escrow Agent CANNOT illegally comingle funds. I've represented Buyers who had ongoing, agreed upon repairs completed months after the Closing, and months after I had been paid my full Commission Fee. In this transaction, I represented both the Sellers and the Buyer. A note on this one- the Sellers had an Estate to sell, real estate included, and the property was financed with a "Reverse Mortgage." After the mother had died, the Mtg Co wanted the Estate to sell the home and settle what was owed. It was a very difficult transaction, but I was pleased to assist all parties and everyone was happy!

It is illegal in WA State, and many others, to give a "kick-back" to the Buyer out of Real Estate Commissions. 

You won't find 100% honest good people in any profession. I have found less in mine, but am certainly not ashamed of what I do. When I was a Loan Officer, for five years, I ran a tight honest ship. When laws tightened up, it didn't affect the way I worked, as I was already operating with discount fees, offering Par Rates. I hung up my Loan License in December, 2009, due to what I saw as a complete melt down of Honest Mtg Brokers (in the midst of so many dishonest ones), and the Banks gaining far more power. Not a business I wanted to remain in. 

As far as representing Wyldthang's Seller, the actual older lady? That was a sad story indeed. No one should be forced to sell his or her home! Unless the Listing Agent voluntarily reduced the Commission Rate on the Listing Agreement, he got 100% of the Commission. After hearing that story, that is a shame. If you buy a property that is listed by a Brokerage, I recommend you find yourself the best Agent you can! The fee is being paid out of the Seller's Net Proceeds. The only exception to this, is if you are in a state where it is legal to violate listing agreements OR who allow kickbacks to be paid to Buyers without representation. If you represent yourself and buy a For Sale By Owner property, I'd recommend you retain a Real Estate Attorney, get a Title report, review carefully, retain an Escrow Agent, and have the purchase Recorded! I actually have family who bought a FSBO, made their payments faithfully, and saw their home yanked out from under them. It wasn't recorded! The Seller mortgaged their home to pay his wife's medical bills, then defaulted, and it was foreclosed upon. 

I have represented a couple, recently, who were in the midst of a divorce. They received the most for their property, of any locally, in the price range it was listed in (it was worth it). This was an example of professonial negotiation and a lot of patience (took six months). I represented only the Sellers. We helped them haul off the derelect cars, took junk to the dump, and I was supportive and became friends with both the husband and the wife in the process.


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## GoldenCityMuse (Apr 15, 2009)

This has been a very interesting discussion. I am working on my house & property in NM to sell it, just hauled 1000# scrap metal to the recycler. Still have a lot of cleaning to do later.


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## bearlyscene (Jun 22, 2010)

This is in response to REAUXMAN. In most states you probably violated your agreement with your seller. In a listing contract (maybe you might want to read one) states you will present all offers. Not to mention you lost a potential buyer ...great salesmanship. In actuality a buyer does not have to use "the state approved" purchase and sale agreement that is real estate 101. If you have yet to recieve a contract written on something else besides your local MLS boards purchase and sale agreement or listing agreement you must not have been in the business long. In some states (Massachussetts for example) you can't even write the contract a lawyer has to. FSBO's have been doing it awhile without you. A signed agreement on the back of a cocktail napkin is just as enforceable as your fill in the blank "contract" that you get up to 6 percent for (some states more). Had I been the seller I would have fired your firm for not presenting the offer for negotiation. It's funny how some of us have a self inflated sense of importance. Great job in an economy where property is going into foreclosure you ran off a potential buyer. Is that "representing" the best interest of your seller or your firm, just because they asked for a reduced commission.


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