offer to purchase RE without agent's help?

Question

I have done myself a tramendous work on RE search, CMA, Income/Expense reports without the help of RE buying agent. I also got the pre-approval certificate from the lender. Now, I am thinking of putting an offer that contains contigencies to the seller agent. At this point, I don't see why I should get an buying agent in the process. Instead, I want to the seller to compensate me that 3% commission at the closing.
To get the law on my side, should I get the RE lawyer to draft/ review an offer? and how much? can an offer be generic so that I can use it again on other house, if this one gets rejected?

Any thought would be appreciated.

Answer 1

You don't have to have a real estate agent to make an offer on the house. However, since you are NOT a real estate agent, you can't earn a commission, see? So your offer price on the house needs to take that 3% into account, and be 3% or so lower, with the explanation that the owner is saving the selling commission. Otherwise, you are practicing real estate without a license.

Problem, though: If your seller is represented by a real estate agent, they may have to pay 6% to the agent for their side of the transaction, even if their agent didn't bring you into the deal. Depends on how their listing agreement is written. In some states, it's 3% to list, 3% to sell, total of 6%. Some agents, if they bring the buyer and seller together, will knock it down to 5%. In other areas, the listing agent has advertised how much of the commission they will split with buyer's agents. In some cases, especially on slow-moving properties, a listing agent may offer 3.5% to 4% to a buying agent, just to get the darn thing moving. So don't count on that 3% as a done deal, ok? They may be having to pay 6% anyway, in which case, they will probably counteroffer to eliminate that.

Keep in mind that the SELLER sees no reason to give you money just because you decided to do without a buyer's agent. That was your choice. That's why sellers often do FSBO -- to "save" the fee. Of course, the buyers think they are getting a deal, because the seller doesn't have to pay all that commission -- so everyone starts thinking that 6% is "theirs". Ironically, most FSBO's usually end up getting about 16% less for their home than if they had gone through a broker.*

You sound like this is the first time you've done this, so it would be an excellent idea to get an attorney to draft your sales contract. You may even be able to hire a real estate agent to simply review the contract for you, for a set fee ($200-$500), and suggest stipulations, contingencies, etc. You aren't hiring them to represent you, just to advise you o this particular aspect of the transaction.

Each offer is a little different, because each house is different -- depending on appliances, lighting fixtures, that are included, negotiated, etc. But a standard contract in your state ought to take care of most run-of-the-mill transactions. Your biggest decision factors are going to be in determining inspections and negotiating later who pays for what. If you're a good negotiator, then that's a slam-dunk. If you aren't . . .

Just keep in mind -- real estate sellers can be VERY emotional. An experienced agent cuts through the emotional b.s. pretty quickly.

Answer 2

First off, did you get qualified for pre-approval, or were you pre-approved? They are not the same thing! You need to be pre-approved for a loan for it to be a bargaining chip in making an offer on a home. A prequal isn't worth the paper it is written on.
The seller of the home has signed a contract with the listing broker as to how much commission they will pay. This amount cannot be changed by you in any way. The seller is obligated to pay that amount to the listing broker regardless of who the buyer's agent is and how that commission is split. And yes, the previous answerer was right in that you cannot receive commission without a license.
Someone must represent you in the purchase of a home. If you walk into the office without another agent or a lawyer, the listing broker will just consider you as their customer. You might as well get someone to represent you, instead of the listing broker who will have conflicting interest in representing both of you.
Yes, you can use a real estate lawyer to handle your end, but it will cost you, and you can use a real estate agent for free. It is always recommended that you hire a lawyer to look over the real estate papers, although many people don't. If you use a real estate agent, they will have a purchase agreement form that their broker uses, and you cannot bring in your own. A lawyer will have a generic agreement that they will tailor to your needs.

Answer 3

The seller has no reason to compensate you the buyer agent fee at closing. The seller will pay the full percentage of his/her listing agreement contract whether or not you use a buyer agent. Hence the seller will already pay the full 6% to the listing agency, and now you expect the seller to cough out another 3% because you did your own work ?

Sorry to inform you it does not work that way. If you expect the listing agent to split a commission with you, prepare to have a broker's real estate license handy, since it is against the law for the listing agent to split a commission with anyone OTHER than another licensed brokerage agency.

You have done a lot of work for nothing here. Get a buyer's agent and let that person split the commission with the listing agent. You will then have a licensed agent working on your behalf, who will assist you with the various technicalities of drafting an offer.

Answer 4

You won't "get the law" on your side. Giving you a commission is simply illegal unless you are an agent. You can ask for 3% in closing credits, but the seller will still be contracted and have to pay their agent the 6% commission for the sale.

Answer 5

If you are not a licensed RE agent, you cannot receive compensation for the transaction. As the others said, that is law. I can't give any compensation to a non-licensed person. Say the office assistant (who is not licensed) does some work on a transaction and I want to give her $20 for the extra effort. Against the law.

You can take your offer to a RE attorney if you want to waste more time and effort.

Generic RE forms are available at almost any office supply store.

Answer 6

If you are not a licensed agent with your state under the supervision of a licensed broker in your state then you can not receive compensation on the sale of properties... not even for yourself. That is the law.

You can, however, request 3% (give them amount, not the %) off of the price of the property, but it can NOT be because you acted as an agent.

Answer 7

By law compensation goes ONLY to liscensed brokerage firms so to receive compensation on yours or any other realestate transaction become a licensed agent and you'll get your 3%. Good luck!