Home Buying in Greensboro>Question Details

Datamanager, Home Buyer in Greensboro, NC

To whom am I obligated if neither my buyer agent OR the seller agent showed me the home or found it for me?

Asked by Datamanager, Greensboro, NC Wed May 9, 2012

I knew of a home for sale that was NOT listed with a realtor. I looked at it for and with my MOM on two occassions. It is now listed and she also has a buyer's agent. Neither agent had anything to do with our knowledge of this home, but she made a offer through her agent. To whom are we obligated?

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Datamanager,

If your mother made an offer through an agent then she most likely signed an Exclusive Buyer's Agency agreement with the buyer's agent that she made an offer through. If you had not wanted the services of an agent then an agreement should have been reached with the seller before an agent was procured by the seller.

Hope this helps,
1 vote Thank Flag Link Wed May 9, 2012
As a Buyer, you don't pay any fees to any agents and are not 'obligated' to any unless you signed an exclusive agreement to have one represent you with your purchase.

However, if you are fortunate enough to have one working for you, they will help you negotiate an appropriate amount of funds from the seller in order to pay your closing costs.....unless you are just paying cash and are not concerned about protecting your rights or interests or money.

Otherwise, it's always best to interview a few and select one which whom you are comfortable working.
1 vote Thank Flag Link Wed May 9, 2012
When i list a home, the Seller agrees to pay at least 6%. I get the full 6% unless a buyer buys this home and that buyer has a Buyer Agent, which as a List Agent, we are totally ok with splitting our commission bc:

The home goes under contract

The process will be more smooth since both sides have their own representation.
0 votes Thank Flag Link Thu May 10, 2012
You would have to find out what the compensation scheme is from the agents involved.
0 votes Thank Flag Link Thu May 10, 2012
Datamanager, not knowing what the Listing Agent's agreement is with the Seller, I can only give you what would normally happen. The Listing Agent charges the Seller a commission for marketing the home and splits that commission with the agent that brings the buyer and ends in a successful closing transaction. That is the way it would normally work and the one commission paid by the Seller pays both agents.

Your lender should be able to give you a Good Faith Estimate of all the costs involved in acquiring a loan and closing costs associated with it. If you are paying cash, the closing costs will be less, but you will still have inspection costs, title search and insurance and attorney fees. Usually, I tell my buyers that closing costs are somewhere around 3% to 4% of the purchase price.
0 votes Thank Flag Link Thu May 10, 2012
Thank you all for your time and efforts in helping me understand these circumstances. This is a follow-up question. If the seller's agent is charging a percentage of commission, and my mother's agent is also charging a commission, does this mean the seller (and ultimately my MOM) is going to pay double commission or does the buyer's agent get paid from the seller agent's commission? AND, is there a formula to estimate closing costs? ALL of this is asked in an effort to understand offering price.
0 votes Thank Flag Link Thu May 10, 2012
If she made an offer through her agent, even though he did not show it to her, then she is obligated to him. If she had made it directly to the owner, then she would not be obligated to him. If the owner has an obligation to anyone, that is the owner's concern, not yours.
0 votes Thank Flag Link Thu May 10, 2012
I'm a little unclear about your question. If I understand correctly, you and your mom visited a For Sale by Owner home and your mom made the offer. If this is correct, the answer is complicated. If your mother has a valid Buyer Agency Agreement with a licensed agent, then the buyer agent is due commission whether or not she has shown you the home. If the offer was presented after the seller listed with the listing agent, then the listing agent is due commission also. Commission should be paid by the seller, so this should not be an issue unless the Buyer Agency Agreement stipulated that your mother owed commission once a home was found.
0 votes Thank Flag Link Thu May 10, 2012
I'm not sure I understand the question, but think you're saying that a home you saw that was originally for sale by owner ended up getting listed. That agent represents the Seller. Then I think you're saying that your mom made an offer through a seperate buyers agent. If this is the case the buyers agent represents your mom.

If you're not clear who is obligated to your mother, look at the contract. The fact that neither agent had anything to do with your knowing of the home is totally irrelevant. You would be better off with a buyers agent, then without, though if the buyers agent is also the listing agent then you've allowed Dual Agency which while perfectly legal here in NC; presents in my opnion a conflict of interest.
0 votes Thank Flag Link Thu May 10, 2012
When you say "she" has a buyer's agent, I think you are referring to your mom. If she signed an agreement with someone to be her "buyer's agent", that agreement indicates that the buyer's agent company will be paid a certain amount of money (decided on at the time of signing) on a completed transaction. Finding the home, is just a very small part of the whole house buying transaction. That is when the work really begins and your agent is going to be helping find comparables so that you know what price you should offer, negotiate with the seller to get you the best price, arrange for inspections, closing agent, and pretty much document this whole transaction from beginning to end. I would not want to navigate a home purchase these days without an experienced agent given all the laws and regulations that are in place, such as due diligence, etc. But to answer your question about obligation, if the buyer signed an agreement with an agent for their services, there is an obligation, no matter who finds the home. I hope this answers your question.
0 votes Thank Flag Link Thu May 10, 2012
If you did not have a buyer brokerage agreement, then the agent that wrote the offer would be entitled to a commission and be obligated to serve your mother in an agency capacity. In this case, your mother isn't "obligated," but if she wanted to bring in another agent, she would be responsible for compensating them - and, the fact is, probably no agent wants to get in the middle of a transaction in progress.
0 votes Thank Flag Link Thu May 10, 2012
Like basically everyone else said, you/your mom is
0 votes Thank Flag Link Wed May 9, 2012
If I understand your situation correctly, your mother has made an offer on a home using her buyer agent to negotiate through and bring the offer to contract. Once that agent is in the loop, the agent is entitled to be compensated, provided the sale comes to fruition.

If the seller has agreed to compensate a buyer agent, then the commission offered is subtracted from the commission spelled out in the Buyer Agency Agreement between the agent's firm and your mother. That commission may or may not cover the entire agreement between these two indivisuals. If it does, great. But if not, the agent/firm may require the buyer to make up the shortage. If it is very close, some firm's will waive the difference. But if it is considerable... well let's just say this is a conversation that should have been discussed up front.

I would recommend that you have your agent at every inspection, ask for their guidance in negotiating repairs, make sure they are walking you through every step in the process from here forward. Believe me, the hard part just may be yet to come!

Best of luck!!
0 votes Thank Flag Link Wed May 9, 2012
First of all you need an agent to represent you. If she wrote an offer through her agent, she is buying the house with that particular agent representing her even though you saw it on your own. If your question regarding "obligations" is regarding fees, the buyer doesn't pay any commissions. The seller pays the commission to both agents. There isn't any type of discount because you viewed the home on your own.
0 votes Thank Flag Link Wed May 9, 2012
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