Home Buying in Bellevue>Question Details

Eric, Home Buyer in Festus, MO

question about pursuing a cancelled listing

Asked by Eric, Festus, MO Mon Dec 30, 2013

during the summer I went to look at a house while it was listed with an agent. I never made an offer or anything like that. This is somebody whom I know through a mutual friend and I was told that it will likely be re-listed in the summer. A conversation took place through a mutual friend and there is now the potential for me to purchase this house from the seller without an agent.... is there any potential blowback for the seller, or for me for that fact in now making an offer directly to the seller?? The way I understand it, the seller is not happy with the old agent anyway and even if they do re-list, it wont be with the same broker... thoughts on this? Thanks.

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Hi Eric, those are some very good questions. First I would offer this advice that you should def be represented by a good agent who has been in the business longer then a shorter time and is in the biz full time. Also, if you did or did not sign an agency agreement will also come into play so that is a question I would ask.
No real blow back for you unless you try and do it without a buyers agent. I can tell you a story about a client who did this, bought without being represented and it ended up costing them over $70,000 in attorney fees and the funny thing was, the seller was an attorney.
There is just too much that can go wrong and there are lots of forms that are there to cover you but they are there to also cover the seller. I can provide a great mortgage broker for your loan, inspector who has been in the biz over 45 years, make sure the value is there, give the seller reasons to offer less then asking, and just over all guide the entire transaction to a smooth close with as few bumps as possible.
It's free for you to use an agent. The seller pays the commission. Give me a call and I can go over more of the situation as I feel there is more to this story.
Thanx and have a blessed day and an awesome 2014.
Mark
0 votes Thank Flag Link Mon Dec 30, 2013
As you can see from the various responses, we are not quite sure what to tell you because there is a lot of missing information. I.e, did you see the house with an agent in the first place, is this home in Bellevue, etc. It is probably ok, but there are so many reasons to use an agent anyways, that I would suggest you hire one to help you. There are so many snags that can come up, you will need a good inspector, you need an agent to determine objectively what the value of the home is, etc. Feel free to contact me if you want to consult, pay me on a fee basis for the work that I do, or get approved for a loan.

Good luck to you in any case,
Jirius Isaac

Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
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0 votes Thank Flag Link Mon Dec 30, 2013
Hi Eric,
There should be no "blowback" on you, provided you didn't sign any agency agreement at the time you saw the house. If you did, the agreement would indicate the time period that you were to be obligated.
The seller will need to consult their listing agreement to ensure their safety. As Kary indicated, standard forms in Washington carry a time period after the listing is canceled which protects listing agents from buyers & sellers intentionally going around them, after benefiting from their services.
Now, I want to add one consideration. Over the past year we've had a shortage of inventory. Well presented homes that were well priced didn't last long on the market. The fact that the home you're asking about didn't sell makes me wonder why, if and just reducing the price 6% will make it a worthwhile purchase or not. The local agent you are considering helping you should be a good resource for this, but don't just assume that you're getting a "deal" because you don't have agent commissions involved. If the home was substantially over priced, you still may be paying too much.
0 votes Thank Flag Link Mon Dec 30, 2013
Dan, I would agree that most buyers don't think that way. Conversely if a property is 20% undervalued in the list price, few buyers will offer more than 10% over list. That situation is about the only one where I'll recommend the use of an escalation clause.
Flag Tue Dec 31, 2013
Hi Kary,
I find that most buyer's don't think that way. The actual value may have been 10%, 12% or 15% below the list price for various reasons due to location, condition or issues like limited access for showings. Know way for us to know, but I hope the OP can get the right research to make a good decision.
One other factor is that the market may have improved sufficiently to make up for much if not all of any pricing issues. Will the seller hold out for the improve value (original list. less commissions, plus market improvements) or accept the actual value as based on currently listed and sold similar homes.
Flag Mon Dec 30, 2013
Beyond value, it also might not be that desirable of a property. If the OP didn't make an offer previously, perhaps there was a reason for that which they don't remember. Clearly they could have made an offer before for 6% less than the list price.
Flag Mon Dec 30, 2013
You can likely purchase this home without an agent and be "ok" but it's difficult to tell if the listing broker "procured you" - meaning you were made aware that the home was for sale and/or viewed the home based on their marketing efforts. If so, in WA they may be entitled a commission if it's within 6 months or whatever was dictated on the listing agreement. If there was recourse, it would come back to the seller directly, but also indirectly to you because if the seller has to pay the listing broker now and therefore can't offer you the same deal.

Also remember that listings are actually owned by the brokerages, not the listing brokers. If the home is worth enough and there is evidence to show that you knew the home was for sale because of the brokers efforts and the seller was still in the timeframe alotted by the listing agreement, the brokerage could chose to pursue the commission, not the listing broker.

The bottom line is: to be on the smart and safe side, you need an attorney to tell you that you are in the clear. Your wife's friend is likely a good broker and can guide you well on the situation but you really need an attorney. And if they are a responsible broker, they will also tell you the same thing.

I know that saving on a commission is enticing but I truly believe you should have an agent represent you here. Without an agent representing you, it could be a home run but chances are there's going to be a nightmare in there. I am just being practical and basing it on years of experience. There are so many complexities involved in today's real estate transactions that we, as brokers, spend at least 30 hours protecting clients against risk - and that's with our years or expertise! I can't imagine trying to do it with no experience and a full time job. Last year I listed a lawyer's home. I asked him why he listed the home because he could have EASILY navigated the contract himself. His response was, "This is not the situation to be expiramenting in. I understand a contract but you know what could go wrong during a transaction and I need protecting from that. I don't want my sale to fall apart."

Good luck and go get 'em!
0 votes Thank Flag Link Mon Dec 30, 2013
Eric, is this a house in Washington state (where you asked the question) or Missouri, where you apparently live?

In Washington state most listings have a "tail" period where the listing agent is still entitled to a commission under certain circumstances. The NWMLS which covers Bellevue Washington has such a clause and that clause would likely cover the situation you describe for at least some period (six months from either the original termination date or the cancellation date--not clear).

I would suggest that you contact a real estate attorney in whatever state this property is located, and one in the same general area. I know the listing agreements generally used in Vancouver Washington are different than the listing agreements used in Bellevue Washington, so location does make a difference.
0 votes Thank Flag Link Mon Dec 30, 2013
You can purchase the property by working directly with the seller. Title companies generally have all the paperwork available for For Sale By Owner transactions. I recommend speaking with an attorney, and the seller will want to review their expired listing contract.
0 votes Thank Flag Link Mon Dec 30, 2013
Thanks for the replies - my wife has a friend who is an agent that can help here, I guess I am primarily making sure that the previous agent wouldn't have any re-course against either of us since the house was originally shown under this old agent.... then the house was cancelled and I come in and buy it directly from the seller. I know the seller is motivated to sell without paying a 6% commission and will pass a lot of that savings on to me... I'm good with making sure the contract and title work is done right - just want to make sure there isn't the risk of a lawsuit from the old agent
0 votes Thank Flag Link Mon Dec 30, 2013
A Home can be purchased without a listing agent. Many Sellers will still consider working with a Buyer's Agent. This would be in your best interest so that you will have representation. There are many documents involved in a Real Estate transaction. A broker would be able to help you understand the transaction, and the addendums that you may need to add in certain locations.
0 votes Thank Flag Link Mon Dec 30, 2013
I would suggest at the very least you have an attorney review the contract to buy. Since the sellers aren't paying an agent, maybe they could hire an attorney to handle the transaction for both parties.
0 votes Thank Flag Link Mon Dec 30, 2013
You can purchase this home directly from the seller if it isn't listed. The only advice I would give you is to call a local title company to have them help you with the title work and the paperwork. Best of luck!
0 votes Thank Flag Link Mon Dec 30, 2013
Assuming this is Washington state, a title company is not going to help you with the purchase and sale paperwork. That clearly goes beyond their LPO licensing. Even having a party sign an addendum extending a closing date that was prepared by an agent goes beyond their licensing.
Flag Tue Dec 31, 2013
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