Home Buying in Houston>Question Details

Rick, Home Buyer in Houston, TX

When are you obligated to use a realtor?

Asked by Rick, Houston, TX Mon Sep 8, 2008

Usually when I call to view a house they send a realtor other than the listing agent. On those rare occasions when the listing agent shows the house, they tell me Texas law requires them to let me know I am entitled to my own realtor as their obligation is to the seller. Recently I viewed a house I wanted to make an offer on a house after being shown it by the listing agent, when I asked her how I went about getting my own representation, she said I was legally required to use her as an intermediary, but it was okay because neither I nor the seller would do anything that would make us unhappy. I have never bought a home before and don't know what I need to do not to end up unhappy, but I suspect a big step would not be letting the seller's agent counsel me. Needless to say I am not buying this house, but is there some loop hole in the Texas law that sometimes requires you to use the listing agent or is she just what I am afraid she is --- completely dishonest.

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This question is quite old now. I am not sure why the sudden flurry of activity on it from out of state commenters.

Everyone is entitled to their own opinion about the services that Realtors render in a real estate transaction. However, for a first-time buyer not having any experience to say that they don't need help or advice is like telling a person with appendicitis that they can do it on their own.

As I said back in September, Texas law does not require you to use a Realtor, and by the same Texas law all Realtors represent the seller unless you sign a representation agreement with a Realtor. That Realtor is your agent and must act on your behalf to advise you and help you get the deal done in your interest (your way).

Occam said it best. "Never attribute to malice that which can be adequately explained by stupidity." It is possible the Realtor was lying and knew it, but more likely that she was just ignorant.

As to these comments about reducing commissions Gail said it most succinctly. The seller already agreed to pay whatever rate he committed to, whether the buyer was represented or not. The buyer has no power to change the "dumbness" of anybody, if there were any dumbness. Dumb would be to go into a boxing ring with a professional with years of experience and not expect to have your dumb___ kicked. A Realtor is a professional. I wouldn't be so Eager to jump into a boxing ring without help.
1 vote Thank Flag Link Sat Feb 21, 2009
The reason the broker usually sends another Realtor is two-fold: large brokerages often separate listing agents from buyer's agents to prevent a conflict of interest, and Realtors who are good at listing houses need to focus on that, not helping buyers.
The Information About Brokerage Services form from TREC describes the 3 possible roles for a Realtor.
If you do not sign a Buyer's Representation Agreement making a Realtor your Buyer's Agent, then the Realtor you use will automatically represent the seller and must try to get the best deal for the seller.
If you sign a BRA and have a Buyer's Agent, then that Realtor must represent you alone and try to help you and advise, and not help the seller without your knowledge and consent. But, there is an exception:
If your Buyer's Agent shows you a house that they are the Listing Agent for, then the relationship becomes an Intermediary. As someone pointed out below, this situation may not be the best either for buyer or seller, since no advice can be given, especially on pricing, to either. This unusual situation does happen, and when it does, the broker often assigns or appoints a Realtor to work with you compartmented off from the listing agent.
Although it is possible the listing agent does not understand the law, it is unlikely she would have said you must use her, because you're not obligated to use her or any particular Realtor. Hopefully, it was a misunderstanding and not dishonesty.
Note that both Realtors are paid out of seller's funds. So, even when you do sign a BRA, your Realtor will be paid by the seller of the property when you close, not directly by you. Other arrangements can be negotiated, but this is customary.
Only people who have signed an agreement to use a particular Realtor could be required to use a listing agent, but even then an appointment of another Realtor to help you may be called for.
1 vote Thank Flag Link Mon Sep 8, 2008
You are never required to use the listing agent. You are entitled to use whomever you want and as a buyer, it should be a buyer's agent. I agree that the intermediary procedure is not beneficiail to the buyer or to the seller. Because once an agent acts as an intermediary he/she cannot give advice to the seller or to buyer. Most of the time this doesn't work because as a listing agent you already know what the seller's bottom line is and what they can negotiate on etc. That agent cannot share that info with you.

Even if they appoint another agent from the same brokerage firm, that agent is still a sub-agent to the seller and required to look out for the best interest of the owner.

Web Reference: http://www.sumnerrealty.com
1 vote Thank Flag Link Mon Sep 8, 2008
Sold, Rick,
We are not in Fla. If the house is listed there is nothing that says that the Broker is going to pay you 3% for viewing the home on your own.
In Texas we may do rebates if we wish, we do not have to. We can not pay a non lic. person. A party to the contract may participate, MAY not MUST.
As I keep saying, we have different laws in Texas and still again different guidelines in the different Associations - MLS to you.
0 votes Thank Flag Link Mon Mar 23, 2009
you are right the first time......I am not sure it is law..but ethically speaking the listing agent should ask if you already have representation. But if you dont you are free to use anyone you want...and are definitely not required to use listing agent as YOUR realtor
0 votes Thank Flag Link Mon Mar 23, 2009
All you have to do is ask the other side to drop form 6% to the 3% they had actualkly intended to pay. They will be happy to do it. No one is dumb enough to demand a 6% fee.
The commission agreement has already been agreed to by the seller and their agency. Whether they're making 6%, 5% or any other amount, they're under no obligation to change that rate, simply because you arrive without representation.

You can certainly ask them to drop their rate, but they are under no obligation to do so, and are contractually obligated to pay the full commission they've already agreed to, with the listing agency.
0 votes Thank Flag Link Fri Feb 20, 2009
Alan May, Real Estate Pro in Evanston, IL
Gail you are correct they better know what they are doing if they are going to represent themselves even though, contrary to eager buyer, there is nothing to be gained. A buyer can not save 3% of the commission by representing themselves. The agreement to pay a commission has nothing to do with the buyer. It is a contract between the seller and the listing broker. There is likely more to be lost.
Web Reference: http://www.KlamathHome.com
0 votes Thank Flag Link Fri Feb 20, 2009
But the commission rate is in the listing agreement between the listing agent/broker and seller, and if the buyer does not get an agent, the listing broker gets the whole commission. And the buyer better know the transaction process, if he's doing it by himself!
0 votes Thank Flag Link Fri Feb 20, 2009
It seems that Jerry has the most correct answer here. As a buyer you don't have to use a realtor but the seller has already agreed with the listing agent to pay the commission. As a buyer, wether you use a realtor or not the seller will pay the commission and you are not a party to that agreement so you can not negotiate that down. The risk you take once the listing agent tells you that you have the right to have your own agent and you continue to view the home is that this agent is telling you that they will have to tell their seller client anything that you say that might benifit the seller. In this case you are much better off stopping the showing and looking for your own agent. It is the listing sellers perogative to have their agent only represent them just as it is and should be yours to have your own representation.
I will also say that if any agent has indicated that "by Texas Law" you have to do something they are in danger of practicing law without a lisence unless they have a lisence to practice law.
Web Reference: http://www.KlamathHome.com
0 votes Thank Flag Link Fri Feb 20, 2009
If you are the buyer, the seller is going to pay your agent's commission unless you negotiate otherwise. There is really no reason for you to not use a buyer's agent.

The only time I'm aware of when one needs to use a realtor is when bidding on-line on a HUD foreclosure.
0 votes Thank Flag Link Tue Sep 9, 2008
You've got lots of good answers here. I think the simple solution is if you don't want to use the listing agent as also your agent is to sign on with a buyer's rep and let them show you any of the houses you are considering. I think they will be able to get you a better deal and they'll be able to make the appointments for the homes and accompany you to the homes. Rightly or wrongly you probably burn some bridges if you call an agent listing or company to show you a house and then want to bring in someone else to represent you. I agree that you don't always want the listing agent to also represent you, but if you want someone else to do it, then also get them to spend their time showing you the houses.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Sep 9, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
As Jerry said you are never required to use a 'Realtor, it is just wise. If sigh a representation agreement , yes you may owe a commission, but you still do not have to use the Realtor and if the Realtor has misrepresented him/herself or not represented you properly you do not owe the commission.
You or an attorney may represent you. NO other party other than a licensed Real Estate agent may. There is a difference between a Real Estate agent and a Realtor by the way and the listing Broker if a member of the MLS is not obligated to pay a co operating commission to any other party than another Realtor in the same MLS.
In Texas we are to give you a form the has at the top, Information about Brokerage Services, and explains the difference between a Buyers Rep, a Sellers Rep and an Intermediary. To be an intermediary the Realtor must receive in writing permission from both parties in writing to do do. It does not state that the Realtor must demand.
I do not beleive you should punish the sellers of this house because the listing agent is dumb. If you like the home. Decide who you want to represent you and ask another agent to represent you. If you are not going to sign a buyers representation with another agent call the listing Broker explain the situation and ask that the listing agent or agent you spoke to be removed in your transaction and ask to view the home. The listing really belongs to the Broker.
If no one has given you an Information About Brokerage Service, email me and I will send you one. They are to have you sign one and keep it , but I usually leave a copy as well, you may not have a copy.
0 votes Thank Flag Link Tue Sep 9, 2008
I'm sorry , but I don't agree with most of these answers.

You are not required to use a Realtor or licensee when selling or buying, even if the home is listed with a Realtor or licensee the buyer is still not required to use a Realtor. You are not required to use a Realtor even if you signed a buyers agency, However depending on the cicumstances you may be required to pay a commission.

You stated that you have never bought a home before, So working with a licensed Realtor is a smart move.

My recommedation would be to not contact any more listing agents and start working with a Selling (buyers) agent. He or she can help in your search and save you lots of time and money. If the property is listed with an agent than more than likely the seller has already agreed to pay the listing and selling agents, so this is not an added expense to you. This agent can show you any and all homes you want to see and you will build a relationship of trust and honesty.

Be sure to interview the Realtor and ask for references or ask a friend that has purchased homes to refer you to a good agent.

When the Listing agent represents both the buyer and seller it is considered a Disclosed Limited Agency and this must be disclosed to you in writing. The Realtor or Agent should disclose their agency relationship with you in writing at first contact or as soon as possible.

There is no loophole in Texas and if the agent is telling you that you must use her, than I would avoid her.
0 votes Thank Flag Link Mon Sep 8, 2008
Hi Rick,

I am glad to hear that you are taking the steps to becoming a home owner. I would love to help you my the step. I would like to inform you that it is your best to found a agent that works for you and only you and will show you step by step they way the buying process goes. I can help you manage your Buying to a close. Please feel free to call with any questions you my have. Good Luck!!!!
0 votes Thank Flag Link Mon Sep 8, 2008
Simply stated, you need to use a Realtor any time you buy or sell a house in order to be represented fairly. Since you are a buyer at this time, the seller is represented by an agent, so you deserve representation as well. Anytime a listing agent gives you the line that they can represent you, please tell this person that you deserve your own representation as the buyer. You can bring your agent from outside their brokerage yourself, or you can rely on their brokerage to assign someone to represent your side. You have your own set of needs and goals for this transaction and you deserve to have someone on your side. As the buyer, you almost never have to pay for the service! I'd be happy to help you!
Web Reference: http://www.GailNash.com
0 votes Thank Flag Link Mon Sep 8, 2008
As already stated by many other Realtors here, you are only obligated to use a particular Realtor if you have signed a buyer's agreement with that agent. The agent who indicated to you that you were "legally required to use her as an intermediary" should have told you that if you CHOSE to use her, you would have to sign an intermediary agreement. This would have been correct. However, you were in no way legally required to use her simply because she showed you her listing. It is in your best interest and is highly recommended that you be represented by an agent who is knowledgeable of the market you are looking in. Someone who can provide accurate comps which will guide your offer as well as all information needed that will take you through a smooth closing. If you have not already found and agent, feel free to check out my website. If you think I may fit the market area of your interest, I'd be happy to represent you.
Web Reference: http://www.joanlong.com
0 votes Thank Flag Link Mon Sep 8, 2008
You are never obligated to use a Realtor unless you enter into a Buyer's Agency Agreement with a Realtor of your choice. In your case, you certainly were not obligated to use the Listing Agent. Afterall, she was representing the seller. Which is the case with any Realtor if you do not execute a Buyer's Agency Agreement stating that you the buyer is being represented. Without that, Realtors represent the seller. Since this is your first time buying a home, I highly recommend that you find a Realtor with whom you feel you trust and hire him/her to represent your best interest through a signed Buyer's Agency Agreement. This is almost always a free service to the buyer.
0 votes Thank Flag Link Mon Sep 8, 2008

As previously mentioned, you are never obligated to use a real estate professional. But in today's world of regulations and legal actions, the use of an agent is highly recommended.
0 votes Thank Flag Link Mon Sep 8, 2008
You are only "obligated" to use a Realtor once you sign a Buyer's Representation Agreement. This states that you are allowing (the real estate agency of your choice) to represent you. The agent who showed you the home gave you inaccurate information. You are not legally required to use her. In fact, most buyers who call me or someone on my team to view one of our listing generally have an agent or would like another agent other than the one listing the home. Even if you were still interested in the home you viewed, you could have another realtor/broker submit an offer on your behalf. Unforefunately, you were very mislead by what seems to be a very "greedy" agent.
Web Reference: http://www.corekinteam.com
0 votes Thank Flag Link Mon Sep 8, 2008
Hi Rick,

Great question. There is nothing written anywhere that states you need to be represented by the listing agent - on the contrary, it is advised that you be represented by a different realtor and real estate company. It is a conflict of interest to represent both the seller and the buyer at the same time. She cannot get the best price for the seller or you becasue she is representing both of you. My advise is to terminate any representation you have signed with her (if you signed one) and to get representation elsewhere. If you did not sign a representation agreement with her, then simply call her and tell her you have signed a representation agreement with someone else.

If you need help I would be glad to assist you with this purchase. Feel free to contact me at your convenience.

Juan Carlos
0 votes Thank Flag Link Mon Sep 8, 2008
Locate your own realtor WHO REPRESENTS YOU not the seller. You are not obligated to use this agent, however I have represented both buyer & seller worked out for all parties rare exception to the rule. Never purchase a home even from a builder unless you have a realtor.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Mon Sep 8, 2008
You do not have to use any particular person as your agent. There is no legal precedent for using any Realtor. If you want to make an offer on the house, it is just as simple as making the offer.

I would recommend that you find your own representation, as the listing agent represents the seller's interests, not yours. A buyer's agent's fee is built into the fees the seller pays, so you shouldn't have to pay for this service. I am surprised that she would say this is a legal requirement. That is absurd!

Please contact me through my profile if you would like assistance in submitting an offer or just some unbiased information about our profession and your rights. You need someone on YOUR side.

Good Luck!
Web Reference: http://www.trec.state.tx.us
0 votes Thank Flag Link Mon Sep 8, 2008

You have the right to your own representation, and I strongly suggest that you use that right. It is true that the listing agent can represent both of you (it's called intermediary), but you are not obligated to do so. Hope that helps!

0 votes Thank Flag Link Mon Sep 8, 2008
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