How do I buy a house without an agent? Should I?

November 11, 2010 5:47 AM

We're ready to put an offer on a house ... and our agent just quit. Now what?

We've been looking for a house or land for over two years in Washington state. Our first agent wasn't helping -- no calls, not responsive when we asked to see houses, etc. -- so after over two years with him we ended the relationship and started working with another agent just a couple of weeks ago. She has shown us a few houses, talked to us about value and making offers, and last night informed us that she's not the right agent for us because she's uncomfortable making "aggressive" offers.

Ironically, she told me she was quitting in response to an email I sent asking her to show us a house we liked for a second time, and we were planning on submitting an offer as soon as we'd seen the house again. The commission on this house would have brought her around $30,000 so this isn't a small loss on her part.

Is it a gain on our part?

I am not comfortable asking a third agent to step in at this late date, write up a sales contract, and get that kind of commission. I'm also not really sure I can shepherd the offer through to close without some help. All over the web people give advice, pro and con, about going it alone, using an attorney, etc. But I'm not sure what, exactly, are the steps. How do I get title insurance? How do I get an earnest money check to an escrow agent? Can I use the standard contracts if I'm not a realtor?

To make things more complicated, the house we want is owned by a realtor, who is the listing agent, so we don't even have a quasi-neutral listing agent involved. At the moment, it's a pure Buyer and Seller game, but we're not on equal footing.

Help!

posted by Capri to home & garden (30 answers total)

If you don't know how to navigate the paperwork, get a new realtor.
posted by Blazecock Pileon at 5:56 AM on November 11, 2010

Definitely get a new realtor, as the paperwork is just an incredible hassle.

(What's an "aggressive" offer? Are you offering tens of thousands of dollars below asking price?)
posted by thomas j wise at 6:04 AM on November 11, 2010

Get a new realtor. Where I live, there were a few who quit when the bubble burst, but all of the offices in town are full of hungry realtors. And, there are a smaller number who are known locally for being aggressive and energetic, rather than doing it as a hobby. You see their faces in advertisements, their names on lots of signs, etc. So if you don't have a personal recommendation, you could always pick one that way.
posted by Forktine at 6:13 AM on November 11, 2010

Check out Redfin.com. They will help you with the paperwork and give you cash back out the commission they would have earned. They seem to cover much of Washington. You don't need a full realtor at this point, since you have the house picked out, just help with the negotiation. Why pay full realtor price?
posted by procrastination at 6:14 AM on November 11, 2010 [1 favorite]

Just call another realtor, it would be easy money for them if you're making a serious offer.

I've got to wonder though, how serious you look to realtors. You looked for two years with your first realtor without ever making an offer (it seems) and now your second realtor has quit what would appear to be a profitable situation because she doesn't like "aggressive" offers. The narrative formed by those two things would make me wonder if you're simply viewed as a time-waster. Two years looking in an incredibly down market is a long time if you've actually got the money and/or credit to find a luxury place. (I say "luxury" because, based on your stated sales commission for her, you're talking a place worth about $1,000,000.) And for the second realtor to quit for her stated reason . . . well, how much are you trying to cut the asking price by? Perhaps you are just not being realistic enough to be taken seriously.

You don't provide enough information for me to reach any conclusions about this, but if your situation is such that you're taking your sweet, sweet time and really making lowball offers, you need to be upfront about it.

But If your offer is likely to be acdepted and all the homework's done, there's nothing to stop you getting another agent and working out a better deal (like having your agent pay some closing costs or something.)
posted by Dee Xtrovert at 6:17 AM on November 11, 2010 [3 favorites]

As Dee Xtrovert says it seems like you are a "time-waster" and whatever way you conduct business your current agent does not think you will buy the house despite the "having to take a second look". I used to work with such agents, when I used to rent apartments in the city. Most of the people who rented/bought properties would let us know RIGHT after seeing the house/apartment that they were interested, those who would come 3/4/5 times never took the place always finding some silly excuse that was apparent from the first visit ("it is too noisy here on the first floor", well I told you that BEFORE your first visit!).

Why not negotiate directly with the person and after you have a set price, then go get an agent or someone else just to handle the paperwork?
posted by The1andonly at 6:21 AM on November 11, 2010

If you are making an aggressive offer you might have better luck dealing directly with the seller's agent. She might guide (push) the seller into accepting a low ball offer as she gets the full commission to herself.

Not that all realtors would behave that way, but I do certainly know of cases when exactly this happened.
posted by zeikka at 6:34 AM on November 11, 2010

I think you've had two incompetent real estate agents. Yes, showing you dozens of houses and dealing with a lowball offer costs a lot of their time, but this is all for the potential to make $30k. Unfortunately real estate agents are not like doctors, lawyers, or accountants in that the barriers to entry are very low so many are basically amateurs. You need to find one who isn't.

This time: you already know what house you want, and you're not under contract with any agent. Use Redfin and save a lot of money.

Next time: get a better real estate agent.
posted by miyabo at 7:05 AM on November 11, 2010

One thing you could try is negotiating with a new realtor. If they are asking for 3%, for example, ask that they work for 2%, pointing out you have found a house and there would be no shopping around. I would, to be fair, be clear that if the deal falls thorough the rate would revert back.

I would also recommend that you take a long hard look at your behavior from an agents point of view. Maybe you just have bad luck but maybe you will learn something.
posted by d4nj450n at 7:09 AM on November 11, 2010

So obviously you need to get a new realtor. I would strongly suggest either trying to find a discount realtor (who will rebate you some of her commission) online or even negotiating the fee directly with a realtor you contact, given that you don't need them to do anything more than see you through the contract. (While it's true that the realtors' fee is literally paid by the seller, obviously some of the fee passes through to the buyer in the form of higher home prices. This argument is not well-appreciated by realtors, but it's sort of silly to pay someone a 3% commission just to use their prepared forms to buy the house).

That said, either you've had two incredibly bad draws or (more likely, I suspect), you're viewed as a time-waster by realtors, and so disregard my suggestion if you're not serious about making an offer on this place that is likely to be accepted.
posted by deadweightloss at 7:16 AM on November 11, 2010

I can't use Redfin here, alas.

Can I respectfully request that bashing me for taking my time in purchasing a million-dollar house not be part of future answers? I'm just trying to find out how to move forward. Thanks.
posted by Capri at 7:16 AM on November 11, 2010

I don't think the posters here are "bashing you." The're telling you possible reasons why you're having trouble finding a realtor who can work with you. While the market is tougher right now, the type of realtors who typically work in a million-dollar market probably have other clients who are buying in that same range who maybe take less time to look and don't make lowball offers (you didn't address in your reply whether you have been making such offers). This would explain why this most recent one was willing to quit despite the potential for a high commission. Maybe she thought that based on your typical offer amount, your offer on this home would not be accepted and she would basically be doing all that work for nothing on this house, and any subsequent houses. If you want to keep making low offers on properties, maybe there is an aggressive realtor who takes this approach. Maybe you could contact the realtor who quit and ask for recommendations of someone who better matches your style.
posted by elpea at 7:47 AM on November 11, 2010 [1 favorite]

I agree, the bashing is unnecessary. The agents should be thrilled to have a customer like you, because even if you are 5 times more "needy", they still have half the work to do for the same commission than if they were selling 10 $100,000 houses. Seriously, an agent that's not "comfortable" making "aggressive" offers simply doesn't have your interests in mind. It costs them a dime to call up and say "will you take half? No? Ok, I'll inform my client."

I'm not sure if this is a Realtor thing, or a state law thing, so you'll have to verify it elsewhere. But at least in IL, Realtors are perfectly able to represent both sides of a deal, at least as far as the paperwork goes. (As long as you aren't under contract with another realtor/brokerage.) So you'd call the seller's agent, explain that you are no longer under contract with your former agent, and make your offer. Once a price is settled on, the agent handles everything, and you either get your lawyer to check over the paperwork, or check it yourself. But they are ethically (and possibly legally) bound not to screw you.

On other words, once the terms are settled, a Realtor's duty is to the transaction itself, making sure it goes through properly.

(I don't think it is "allowed", but since the seller's agent will get the whole 6% commission, they will occasionally knock a percent or two off to make the deal go through when there is not another agent.)
posted by gjc at 7:47 AM on November 11, 2010

You don't really need a real estate agent as you've said - I would go with a real estate attorney to make sure your legal bases are covered. Plus attorney's won't take % of the sale price, so you can save a bit there. Interview a few, and I'm sure you'll find one that will work with you for a reasonable fee.
posted by Brent Parker at 7:49 AM on November 11, 2010 [3 favorites]

I'm just trying to find out how to move forward.

I didn't read the other responses as bashing, but instead trying to help determine if a third realtor relationship will turn sour for the same reasons. It is pretty unusual for someone who earns by commission to walk away from the sale. I don't think it is unreasonable to posit that you may not have a good working relationship here.
posted by dgran at 7:50 AM on November 11, 2010

The seller is an agent herself. I would contact her and tell her you would like to make a bid, but your agent quit. Tell her you have no agent right now, just a lawyer and would all things being equal like to leave it that way. Give her a bid that is $30k off what you might pay otherwise explaining that there is no commission to be paid this way and you will pay your attorney out of your own pocket. Since she is an agent, you are going to need her to do the documentation. Ask her outright if she has any conflicts or is unable to do it this way.

Your agent may have quit because of whom is on the other side of this transaction. She may not want to deal with this agent for some reason.
posted by AugustWest at 7:51 AM on November 11, 2010

You've got a real estate lawyer, right? I'm not aware of real estate laws in your state, but when I purchased a house in Florida, my lawyer wrote up my offers, and the agent was just the messenger. If possible, I'd have a lawyer do all of the paperwork, and present it directly to the owner/selling agent.
posted by scarykarrey at 7:51 AM on November 11, 2010 [1 favorite]

I am not comfortable asking a third agent to step in at this late date, write up a sales contract, and get that kind of commission. I'm also not really sure I can shepherd the offer through to close without some help.

It's really not worth your time and effort to figure out how to do the realtor's job by yourself, especially considering the stressful possibility of a paperwork mishap derailing the closing. And as you noted, there's no neutral party involved at this point. Just get a new realtor to handle the closing.

You want the expertise and services that a realtor can provide. Realtors get paid via commission. That's how it works. I think it evens out in the end regarding effort vs earned commission...after all, doesn't your job pay you for both the difficult days and the easy days?
posted by desuetude at 7:51 AM on November 11, 2010

We just sold one house with an agent and bought another house without one, which allowed us to pick the brains of the buying agent. (She was good-humored about it, and we gave her some presents afterwards. We'll also be sending as many people her way as we can.) She knew that if our purchase blew up, her sale would also collapse.

Having at least one agent involved gave us information about hard requirements for the closing (e.g., we needed to pay the fire department thirty bucks for a slip of paper that said they had verified the presence of smoke detectors in the house), and also a sanity check for some things our mortgage guy wanted (they were out of state).

So if you are in a second deal, then maybe you can pursue this strategy yourself.
posted by wenestvedt at 7:55 AM on November 11, 2010

Since she is an agent, you are going to need her to do the documentation

The "you" means the seller/agent
posted by AugustWest at 7:56 AM on November 11, 2010

Look you obviously need either an agent or a lawyer. The commission isn't your problem. The seller pays it, if you don't think a new agent deserves the entire cut - negotiate something with them where they kick you back part of the commission (this is how Redfin works).

Some seller's agents can and will work both sides of the table for offers, however that is up to the seller. If you're looking to lowball an offer then it's likely the conflict would be too great.
posted by bitdamaged at 8:34 AM on November 11, 2010

I know a few decent agents in my area (Island County) and I know some who just seem to flake out when asked a question. I think it is really hit or miss with real estate agents. I would not worry about introducing yourself to a new one, but you really should go with a recommendation from a friend, or from someone who can testify to the agent's competence. :) My mother-in-law has had weird things happen with agents, too.

If you have a friend or relative who is or knows a good agent or lawyer who does not live in your city (but still in Washington state), they might be willing to make the offer on your behalf if it is not something they need to do in person (our agent did this by faxing the offer, since she lives 2 hours away). Then you would not feel bad about a pile of money going to someone who has not done anything but use their computer to fill in some forms when they have not spent the last however long looking for a house for you. (Is that even what you meant by not wanting the commission to go to someone you don't know?). The money goes, in a way, to someone who has a tie to you or someone you know.

I have no idea why someone would say they did not want to make an "aggressive" offer. That is the weirdest thing I've ever heard. I'll have to ask my husband to explain that term to me, because what you describe (going to see a house a second time and then making an offer) is exactly what we did to buy our house and I never heard anyone refer to it that way. And we offered way below asking price.

I cannot recommend going it alone based on my personal experiences of selling, buying, selling, and buying again. If you want to do it, though, I strongly recommend you go and get the best-reviewed book on buying real estate without help that you can find. At least then you might have your answers about title insurance, escrow, etc. laid out for you.
posted by AllieTessKipp at 9:02 AM on November 11, 2010

Another possible perspective of the realtor: you don't say whether your offer is below ask and/or recent rates in the area. The agent has a short-term incentive to sell, yes, but she may not want to be helping you drive down property values in the area, which would have a long-term impact on her commission.

When we were buying a place a couple years ago, we worked with an agent who showed us a bunch of places we didn't like, then finally one we did- the hitch was that it was in a financially riskier neighborhood, but the owners had jacked up the price because they figured their reno job would sell the place. We thought the place was grossly overvalued, and told our agent that. She tried to convince us otherwise by selectively showing us comps; we responded with more data from StreetEasy that favored our position. We put in a longshot bid that was well below their ask, but in line with what we thought the place was worth. The bid was, as we expected, rejected, and our relationship with the agent pretty much disappeared after that. I'm sure she figured we were, like you, not worth her trouble.

(FWIW, plenty of people here in NYC buy without agents, but a lawyer is required by law)
posted by mkultra at 9:12 AM on November 11, 2010

Because I'm in the middle of negotiating a real estate deal, I really don't want to put too much information out there. But I can assure you that I'm not thinking of putting in a low-ball offer, and in fact my second realtor suggested we could get the house for 80-85% of asking price, but my husband and I determined that we'd offer closer to 90%. We haven't told her this, though, because she quit before we came to any kind of conclusion on the price. Given that the market is still declining and this house has been on the market for over six months at this price, and over a year overall, I can't see that it's an aggressive offer.

Anyway, I think she was the wrong realtor, and I know the first guy was too, and now I'm wary of finding a third and giving that person a $30,000 payment for pushing the paperwork through. I realize I need someone to do that for me, but after these lousy experiences, I'd like someone to do it for less, and I was looking specifically (and only) for an answer to that question. I appreciate the advice people have given about Redfin (which doesn't service my area, but is a great service) and finding an attorney. I just don't understand what steps, exactly, I'd need to take if I hired an attorney. That's what I was looking for, and I suppose my question wasn't clear enough. My apologies for that.
posted by Capri at 9:37 AM on November 11, 2010

Here's what I went through when I hired my real estate attorney (in FL, so YMMV):

1. Met with attorney after doing some research on Martindale.com
2. Established that attorney would do work for a flat fee (not commission-based whatsoever)
3. Found house with help of real estate agent, who came up with a fair offer price, considering comps and house history
4. Consulted with attorney, who also gave judgment on offer price considering comps
5. Attorney drafted offer, including contingencies
6. Real estate agent submitted offer
7. Sellers accepted offer
8. Attorney's office took care of all title work, hosted the closing, worked with mortgage broker to get all paperwork in order, took care of setting up escrow, etc.
9. Closed on house
10. PROFIT
posted by scarykarrey at 9:48 AM on November 11, 2010 [2 favorites]

Ok, I used an attorney from the other side, the selling side. I sold a house by owner. The other side had an agent who I agreed to compensate in a way that made her happy, but less than what would have happened if it was agent to agent.

The one agent used the standard forms and worked us through the process step by step with my lawyer checking whatever docs she gave us each time. The agent (in your case the seller who is an agent and will be motivated to complete the transaction and will know what needs to be completed in terms of local laws and regulations) made sure when we got to the closing that everything had been addressed and then the attorneys took over.

If you have an experienced RE attorney she should be able to walk you through everything. As for not wanting to give an agent $30,000 for nothing, I sympathize, but it may be the only way. Maybe your lawyer can recommend someone who will help pay some of the closing costs and other expenses. Do you have a friend or relative who is a broker licensed in the state who can do it? At least then they can get the money.
posted by AugustWest at 12:04 PM on November 11, 2010

Call the broker in charge of your agent's company. He or she will be able to help you.
posted by St. Alia of the Bunnies at 1:28 PM on November 11, 2010

OR you can ask the seller's agent to rep you but I don't recommend that.
posted by St. Alia of the Bunnies at 1:28 PM on November 11, 2010

Thanks for all the answers. We've decided to call the second agent's broker and see if we can get an agent willing to guide us through this process for half the commission, and to refund us the other half after closing. If this transaction doesn't close, and we use the new agent to find something else, we'll go back to the standard rate.

I still don't think the problem was with us, as the problems with the two agents were so different (appearing vexed about showing us six houses in two years, vs. not being comfortable with the offer submitted). The last time we bought we also went through two agents because I just did not like the first agent (she was all makeup and perfume and long nails, and I don't even own makeup), but her broker gave me another one, and we looooooved him (Mr. Casual). He was everything we wanted, and the whole transaction was like butta. When we sold, through yet another agent, she too was perrrrfect (brisk, efficient, no-nonsense, and whip smart), and I really wish desperately that she could represent us here several states away. So the introspection is of limited value. Really, I was just trying to find out how to buy this house!!! Now that I have finally found it, I don't want the thing to get gummed up because of bad agents.

So, on to the next agent, and I'll try to not be so bummed about this one getting as big a commission on a nearly-done-deal as s/he would get for two median-priced houses after taking six months to find them. It's my personal contribution to the local economy I guess.
posted by Capri at 1:41 PM on November 11, 2010

Sorry to add this late, but I would highly highly recommend having a lawyer to look at things. I really liked the real estate agent we used, and would use him again, but the entire house buying process would have gone vastly better for us if we'd had a lawyer to check things out much earlier. I'd personally not bother with an agent if I had already picked the house and was in contact with the seller, but that's me and I don't see how it could hurt any.

We've since had to find a real estate lawyer, which I did by googling and then checking over websites and calling around to find a good fit. We have an actual problem, so it took a few calls to find someone, but to just oversee the paperwork I think it would be even easier.
posted by sepviva at 3:05 PM on November 12, 2010