Can I Buy a Home Without a Broker?

Q: I'm from California. Without using the services of a broker or realtor, I've located a property I want to buy. I found the property by searching MLS sites online. I drove by the property unaccompanied, then found out who the seller's listing agent was. I contacted the seller's agent and had him show me the property. I haven't spoken with any other realtors. My basic question is, do I really need to now go find another realtor to be my agent in the process of making an offer, or can I just get a lawyer, which it seems I'll have to do anyway, and have him draw up the offer and represent me through the closing process? Thanks.

A: The subject of procuring cause could create some issues for someone hired as agent for this buyer. Would it stick? It's hard to say. "Procuring cause" is the legal term for a primary part of the issue. In California, it applies to both open listings and exclusive agency" listings. If an agent showed you the home per your request, it doesn't matter whether he or she is the listing agent or not. The person who showed you the home is the one that initiated the process. Simply telling you about the property, or giving you a list of properties that happened to include the one in question, does not construe procuring cause. Meeting you and showing it to you is considered to be the start of the transaction. Except under certain conditions, that agent is entitled to the portion of the commission that is normally paid to the agent for the buyer. The fact that you are the one who found the property doesn't matter.

Your 3 Choices

Dual Representation

You can let the agent who showed you the property represent you as the buyer. The upside is that the seller pays the commission, and the procuring cause becomes irrelevant. The downside is that dual representation can create a conflict of interest. It is fairly common; moreover, it usually leads to a successful deal.

Legal Representation

You can also hire a real estate lawyer. The upside is that you will be represented to a point by an independent entity. The downside is that unless you can negotiate a deal where the seller pays for your lawyer, you pay for your representation. You will need to know exactly what the lawyer is going to do for you beyond writing contracts. Some do not negotiate on your behalf.

Do It Yourself

Doing it yourself is fine if you are comfortable with the process and know your price, or if you have someone available to help you through the transaction. Smart negotiation might get the other agent to lower his commission and credit that amount toward the purchase. The downside is that it's risky for a neophyte. Lawyers may or may not assist you as much as you would like or need. Understanding the disclosure process and pitfalls can be difficult.

Assuming that you are unfamiliar with the process, my suggestion would be that you talk to the agent about the type of offer that he would want to present. Ask hard questions to see if he is going to negotiate on your behalf, or just try to roll you into signing something. If you don't feel comfortable with the agent's answers, then go talk to a real estate lawyer to get an independent opinion. It may be a significant overall advantage dollar-wise for you to pay a reasonable fee to a good lawyer/negotiator who works to get the best deal for you, as opposed to a dual-agent. Good luck!

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