Your Questions Answered
At Ashlar, I firmly b that an educated home buyer or seller is best equipped to make their own decisions. That’s why I take time out of my day each and every day to answer someone’s real estate question. And, when I think the answer can be useful to you as well, I share it here. So without further ado:
This is really shooting yourself in the foot honestly. A common misconception is that by doing this, you will “save the buyer’s agent commission” which is not the case.
The Florida Listing Agreement most transaction uses specifies two things when it comes to commission:
- The total commission as a percentage of the purchase price
- The commission is offered to the buyer’s agent.
Of #2, there are three types of buyers agent representation:
- a) Transaction Brokers
- b) Single Agents
- c) Unrepresented The total commission as a percentage of the purchase pricetion broker.
So by not having a buyer’s agent, the full commission then defaults to the listing agent… not the property owner.
There are some specific cases depending upon what is in the Unrepresented commission box, but by and large, if the buyer is unrepresented then the full commission specified in 1 will go to the listing brokerage unless modified by some additional terms on the Listing Agreement.
But as the buyer, you do not have the power to change the listing agreement, as that is only between the brokerage and property owner and signed before the listing goes live.
In addition to that, it’s just a bad call to not have someone looking over things. There are two parts of the closing process: What’s on the contract, and what is customary.
What’s on the contract is easy enough. Is there in black and white? But only someone that is active in the industry day in and day out closing 10 or more deals a year will have the familiarity with what is customary.
And by customary I mean things such as who pays what, what is or is not a major issue, what’s negotiable, what’s a deal-breaker, and what sort of fixes and workarounds there are for problems that crop up.
Without representation, you’re trusting the listing agent and owner to be on the up and up. Ethically and legally they are required to, however, the real world isn’t Candyland.
Honestly, I believe buyers need their representation so much that when I have a buyer looking to put in a contract unrepresented, I explain to them the pros and cons of representation even though I’m literally talking thousands of dollars out of my own pocket.
Once a buyer knows the pros and cons, if they still decide to move forward with me as a transaction broker then great. But sometimes people decide to get their own agent because, well, it’s a really, really good idea.