The Buyer Who Planned to Outsmart the Buyer Agency System

By
Real Estate Agent with William Raveis Real Estate RES.0772823

About six months ago I received a phone call from a couple who were relocating from California to Connecticut and wanted to buy a home in my market area. They said they never sign up with buyer agents and only work with the listing agent so that they can get a better deal. I explained to them that it doesn't work that way here, but they insisted that this was how they planned to get a bargain. Being the curious person that I am, I stayed in touch with them and followed their progress. To their credit they've been remarkably open with me and shared their experiences, which have bruised their wallets and their egos.

They decided to make an offer on the first home, a Cape on a lovely street in my market area (not my listing) and paid about $1,000 for an inspection, only to find out that the home had structural damage from termites. I probably couldn't have determined the structural damage from the termites, but I think I could have negotiated on the inspection items better than they did by bringing in experts to price out the repairs and provide the sellers with written estimates.

Next they spent another $1,000 on a home that I already have two inspection reports in my files on. I know that house inside and out. I could have told them that the problem is not with the condition of the home, but with the lender appraisal due to a current lack of sales in that particular price range and saved them the cost of doing the inspection.

Now they are looking at renting, having decided that buying a home just isn't in the cards for them. Ironically, I just put a home on the market for sale that meets their needs perfectly and told them about it, but they don't want to go through the process one more time!

These buyers only outsmarted themselves. I hope when they consider buying again, they use the services of a good buyer agent. It will likely save them more than any of the commission money that they think the listing agent will give up.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Donald Reich 04/18/2012 07:49 AM
  2. Evelyn McCorkle 04/20/2012 07:25 AM
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Rainmaker
988,483
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.com 305-931-6931

Thank you, Gail. We have saying in Russian :" Greedy pays twice" !

I always tell buyers, it is not the best deal - when one agent represents buyer and seller.

 

April 18, 2012 09:04 AM #55
Rainmaker
229,956
Brad Rachielles
CENTURY 21 Prestige Properties, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

This only shows that there are some people who just don't know the workings of real estate..... or for that matter, business in general. Agents are compensated for providing service even after the home is found. If buyers think that these business people are going to handle their side of the transaction for free.... Ha! They also don't understand that while a dual agency situation will still get them fairness, honesty and likely competence in the representation, there is no strong advocacy for their side. (My state, CA., is a faduciary state). There doesn't seem to be any way to be a strong party advocate when the agent is representing both sides.

April 18, 2012 09:06 AM #56
Rainmaker
941,180
Adrian Willanger
206 909-7536 TheHomeFunnel.com - Seattle, WA
Profit from my two decades of experience

Tough lesson for the buyers to learn while trying to save a few dollars with their buying strategy. I wouldn't be surprised if you are the first person they contact when they decide to get back into the market. 

April 18, 2012 09:27 AM #57
Rainer
157,536
Anthony Daniels
Coldwell Banker - San Francisco, CA
SF Bay Area REO Specialist

 

No shortage of weasels in this world, whether buyers, sellers or agents.

April 18, 2012 09:33 AM #58
Rainmaker
1,252,519
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

Most buyers don't understand the concept of agency.  They fail to understand that, in most states, buyer/seller no longer have "representation" when the same agent is used.  Unforunate, but I agree with the Russian saying #56

April 18, 2012 09:39 AM #59
Ambassador
1,505,755
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Gail, I must have a conversation similar to that at least once a month. Calling the name on the sign is great for the seller but does nothing but cost the buyer money, yet they continue. Congratulations on the feature

April 18, 2012 11:28 AM #60
Rainmaker
570,044
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Gail,  Is it something in the water ?  Did they learn this " insider " trick from late night television ?  Did they not get enough zinc as children ?   I just don't get it !

April 18, 2012 11:30 AM #61
Rainmaker
115,838
Kevin Guttman Colorado Home Loans
Fairway Mortgage Corp. - Colorado Springs, CO
Top Mortgage Originator

Gail,

It doesn't sound like they got much of a 'bargain' to me!

Way to hang in there!

Kevin

April 18, 2012 12:13 PM #62
Rainmaker
263,455
Nick & Trudy Vandekar
Long & Foster Real Estate Inc - Devon, PA
Realtors - Selling the Main Line, PA Lic AB067198

Well written example of why buyers should use an agent to represent them and put their interests first.

April 18, 2012 12:25 PM #63
Ambassador
1,550,626
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

Gail - Unfortunately, this happens sometimes, and I'm sure it happens to Realtors occasionaly in other fields.

April 18, 2012 01:45 PM #64
Ambassador
1,803,449
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Gail I run into people who know it all on the lending side all the time.  They always end up finding out just how little they do not know about how mortgages work these day, and wishing they had listen from the beginning.

April 18, 2012 02:58 PM #65
Rainmaker
806,102
Gail Robinson
William Raveis Real Estate - Southport, CT
REALTOR, GRI, e-PRO, Fairfield County, CT

It's the Spring market and I have to write up two offers tonight for my buyers, so I can't respond individually.  Interestingly, the buyers contacted me today and have set up an appointment to see my listing. I'm getting a lot of interest in this listing and expect to get more than one offer, so it will be interesting to see what happens. 

I tried so hard to reason with them in the beginning and to get them to see the value of using me as a buyer's agent as I know this area like the back of my hand - having lived here 30 years and the area only being one square mile of land.  I couldn't have saved them from the first home heartbreak, but I certainly could have saved them from the second one.  I also managed to help one of my buyer clients get a great deal on a 4 bedroom foreclosure with water views during the time these folks were tied up with the second purchase. 

I didn't know our inspections are more expensive than other areas of the country.  The average inspection here on a 3,000 SF home comes to $950 with building, pest, water, and radon testing.  Is that a lot more than your area?  Someone should do a post on that!

As a listing agent, I have to say that I'm always more comfortable when there is a buyer's agent on the other side of the transaction than when I'm in a Single Agent, Dual Agency position.  The transaction goes smoother and is more likely to result in a sale.  In the former situation I have to be as neutral as Switzerland and that's not always helpful.

April 18, 2012 05:25 PM #66
Ambassador
843,031
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

"Neutral as Switzerland" - Love it, Gail!    Very cool!

Great post, and congratulations on the feature!   I have had this same scenario so many more times this year than before - is it in the air this year?   Crazy folks, thinking they get more with a listing agent! 

April 18, 2012 08:02 PM #67
Rainmaker
212,354
Judy Orr
Classic Realty Group - Orland Park, IL
SW & Near West Chicago suburbs

I'm wondering what started this thought in buyer's heads as I'm seeing it more and more.  Was it something on TV?  Are they reading this somewhere?  It is  widespread and I don't understand how buyerts think they're going to be saving so much money by working with the listing agent.  If a listing agent gives a monetary bonus for selling their own listing it is usually to the seller, and it's normally not the thousands of dollars I guess some of buyers think it is.

April 18, 2012 10:42 PM #69
Ambassador
707,789
Debb Janes
The Carl Group, LLC - Camas, WA
REALTORĀ®, EcoBroker Camas, Washington

Gail, isn't that just ridiculous? I have a guy who calls me periodically, (investor) to see if I have a particular type of property listed...he says he enjoys working with me and always hopes I have the property he's looking for...he is of the same mindset. He's positive he gets a better deal "not" using another agent in a transaction. I've sent him information, tried to discuss it, etc. He laughs and says it's my bias. Perhaps, if he has this type of experience, he'll change his mind.

Glad you got a star for this one. ( Been thinking about you and hope you're doing well).

April 19, 2012 07:01 AM #70
Rainer
15,438
Brian Park
Danville, CA

My question to that buyer is what makes you so sure the listing agent will cut a deal if he knows he has a good home at a good price, he can just wait for a buyer that doesn't want to pick his pocket. How much do you think they are going to give you?

They should be happy your the one they found. I would just give them a call and say I have a problem, I can't decide whether to put your name in the we want to wait until prices and interest rates go up file, or the we are not going to buy a good home at a good price until we find an agent that will let us pick his pocket and sell out his sellers file. Which one should I put your name in? The last one I had of these I just looked at their license plate and said you have the wrong license plate, check with the DMV and see if GREEDY or STUPID is still available. I'm just too old and cranky for these idiots anymore.

April 19, 2012 12:13 PM #71
Rainmaker
177,110
Erv Fleishman
Realty Associates - Boca Raton, FL
Luxury Prop Specialist Realty Associates

People bring preconceptions to the table every day.

Move on and fuhgetaboutit. 

April 20, 2012 06:03 AM #72
Rainmaker
806,102
Gail Robinson
William Raveis Real Estate - Southport, CT
REALTOR, GRI, e-PRO, Fairfield County, CT

The buyers called me and want to see my listing.  It will be interesting to see if they try to angle for part of my commission should they decide to make an offer.  As Brian #72 says above, why should I cut my commission on a home that is in demand.  It's getting showings every day, so I think we'll get an offer on it soon.

April 20, 2012 12:13 PM #73
Rainmaker
883,052
Jane Peters
Power Brokers Int'l - Los Angeles, CA
Connecting you to the L.A. real estate scene

This is a great example of why you save nothing by using the listing agent.  A buyer needs their own agent to take care of their needs and their needs alone.  

April 21, 2012 12:30 PM #74
Rainmaker
598,380
Barbara Altieri
RealtyQuest, Fairfield and New Haven County CT Homes for Sale and Real Estate - Shelton, CT
REALTOR - Fairfield County CT Real Estate

Gail -- It's amazing how misinformed buyers are. The listing agent has a contracted commission with the seller. Guess buyers don't know that as this type of thinking is so rampant.  Then on the other hand a buyer's agent will cost them nothing and will probably save them a LOT in return....especially one like yourself who KNOWS the market.  Good story but very sad for those buyers.

April 21, 2012 02:21 PM #75
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Rainmaker
806,102

Gail Robinson

REALTOR, GRI, e-PRO, Fairfield County, CT
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