What obligation do I have to my real estate broker if I found a place on my own and the seller is a friend who doesn't want to use a broker?

Asked by Betty B, Brookline, MA Fri Feb 17, 2012

I recently signed a disclosure stating that my real estate broker would be working for my interests. She informed me that this was not an agreement, but a disclosure. A friend of a friend is interested in selling his apartment and I am interested in purchasing it. Since I found this place on my own, do I have any obligation to my broker? The seller does not want to use a broker as he doesn't want to have to pay the commission.

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Mack McCoy, Agent, Seattle, WA
Fri Feb 17, 2012
And you don't want to pay the commission.

Well, Betty, you can probably get away with it, as long as the agreement doesn't obligate you to pay a commission and the broker wasn't the procuring cause. If you have any doubts, then you might consult with an attorney.

As a real estate broker myself, I wonder how instrumental this broker was in getting you to the point where you could recognize this apartment as a good deal and your potential home. As an analogy - if you were a singer and you met a record producer who agreed to produce some tracks for you, and you went into the studio without them and knocked out some hits, they wouldn't feel like you owed them anything. But if you'd worked on tracks together for months, and then one night got the vocals right, that producer might feel as if they were instrumental in coaching you to the point where you could nail the track.

So, you're probably not legally obligated, and the ethical thing is in your court.

All the best,
3 votes
great analogy
Flag Thu Feb 12, 2015
Thank you for making these points. I agree completely.
Flag Fri Mar 21, 2014
Flag Sun Mar 2, 2014
Mack, love your answer!
Flag Sun Feb 24, 2013
great analogy....
Flag Tue May 29, 2012
Dorene Slavi…, Agent, Torrance, CA
Thu Feb 12, 2015
Your friend may 'Not want to pay a commission" but you might pay if your rights are not represented and it ruins your friendship with your neighbor. Why do without? If you do not use a Realtor, you are best to hire a Real Estate Attorney to oversee the process.
1 vote
Territory.c…, Agent, MA,
Tue Feb 21, 2012
The disclosure is NOT a binding real estate contract. If you want to buy the property direct you should be good to go.

We are happy to do a CMA for you on the property. This way you will know exactly what it's worth before you start negotiating directly with the seller. It is important that you don't over pay.

Contact us: help@territory.com

Good luck!
1 vote
Kawain Payne, Agent, Seal Beach, CA
Fri Feb 17, 2012
Hello Betty,

As a buyer you should have a broker represent you in a sales contract

I understand a seller not wanting to pay a commission, but that is not in your best interest. There are simply too many issues that can arise.

Kawain Payne, Realtor
1 vote
Robert D Hug…, Agent, Devon, PA
Fri Feb 17, 2012
Betty, good answers below. You would be very foolish not to be properly represented by an agent and or attorney. This is the very situation that causes friends not to be friends any longer. If you in fact did not sign a business relationship agreement to work with that Broker, you most likely are free to do as you please. However, most Real Estate agents and Brokers work strictly on commission. And if the person did show other properties, or sent other properties to you, why not use their services?

In this type of case consider negotiating their commission, and if your friend will not pay a commission to a buyers representative, consider paying it yourself, and subtract that amount from your friends asking price. Betty if you hire an attorney they will charge you regardless, unless you know them personally. Sometimes we have to switch shoes with the other person, and see what it would be like not to be compensated for your efforts.

Best advice I can give is do not purchase any real estate without proper representation.

Best of luck to you,

1 vote
Andrea Bedard, Agent, Silver Spring, MD
Fri Feb 17, 2012
Betty, it sounds like what you signed was "Understanding Whom Real Estate Agents Represent" which is indeed "just" a disclosure and not a Buyer-Broker-Agency Agreement. In that respect you do not have any obligations to your agent. However, it would be a nice gesture to at least inform her about the situation.

That being said, are you absolutely certain that "not wanting to pay a commission" is the only reason "the friend of a friend" does not want to use a broker? There are lots of property disclosures involved the FSBO seller is not exempt from. If you don't have anyone guiding you how will you know that you received all disclosures you are entitled to, for example? How will you compare prices to arrive at a reasonable & comfortable offering price etc.? Yes, you can find information online but your buyer's agent can help you makes sense of all the numbers: price per square footage, average seller subsidy just to name a couple.

It is one thing if the seller wants to sell as a FSBO but it is an entirely different story if you are also denied your right to have a buyer's agent representing you! I strongly suggest that you try to retain your agent and find some compromise. You are about to make a very big decision, signing binding, legal documents - it would be in your best interest to have somebody guiding you, representing you, negotiating on your behalf and taking care of all the "little" things that need to get done before you can go to closing. All the best!
1 vote
Donnatella02…, Home Buyer, Falmouth, MA
Sun Mar 2, 2014
What if you contact a real estate agent, he and his associate show you houses, you make an offer which is rejected, but you keep looking. Then you make a second offer 2 wks later on the same house but agent doesn't submit a formal proposal and calls the seller's agent and makes a verbal offer which is rejected. Am I bound to that real estate agent (have not signed any kind of contract)?
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Fri Dec 7, 2012
As long as you did not sign a buyers agent agreement you are fine.

The next question is do you want to be represented in the transaction? You can and maybe should be represented by a buyers agent. I many time have clients who buy private sales, that want to be represented by a buyers agent, where I am still compensated by the transaction.

The biggest question is how comfortable are you going it alone?

A Buyers Agent can:
- Provide opinion of value
- Negotiate on your behalf
- Bring the experience of 100's of transactions to the table
- Represent your best interests
- Save you time and aggravation
- Protect your interest

There are many, many competent Buyers Agents with years of experience that can bring tons of value to the transaction. If you are not comfortable on your own, do not be bullied into not being represented. Real Estate transaction can be complicated if you do not know what you are doing.
0 votes
Hi Kevin,
Would you care to elaborate on these items ?
1. "Negotiate on your behalf" - how and why would a buyer's agent want to reduce the price of a house, when he's paid by a percentage of the selling price? Why would someone work hard to reduce their own commissions ? I guess in real estate, unlike all other forms of business, buyer's agents are just moral angels. This is just utter nonsense and a ploy orchestrated by the mafia that MLS has become.
2. "Represent your best interests" - see #1 above.

Even I will admit that a seasoned real estate agent can (sometimes) observe things and provide recommendations - but unless the buyer is really brain dead, this service is not worth 3% of the selling price.
Flag Wed Feb 25, 2015
Irina Karan, Agent, Aventura, FL
Tue Aug 7, 2012
Agree with Liza.
This also depends on how far in the process you are.
Plus, sometimes buyers pay their brokers for the work done with their own funds.
You need someone to represent you in this transaction no matter how easy it looks.

Hope this helps,

Beachfront Realty, Inc.
0 votes
Greg Dorsey, Agent, Boston, MA
Fri Apr 27, 2012
The obligation really depends on the language of the "agreement" you have with the buyer agent. So often the agreement explicitly addresses this. If not your obligation is to the agent based only on what procuring cause they had in this sale. Maybe they gave you knowledge that helped you understand the sale and neighborhoods. Maybe not.
0 votes
Kevin McDerm…, Agent, reading, MA
Tue Mar 27, 2012
Hi Betty,

All the points made about the value of using a buyer agent are quite true. Who priced the property and is it accurate? Are there factors that are not obvious that would affect its value? Who will help you put an offer together and help you through the process? And on and on...

If I were you I'd ask your agent if he/she will help you for a reduced fee, paid by the seller. Assuming you haven't seen lots of property with the agent already, he/she may be glad to help you for a lower fee since you have already found the home.

Good luck!
0 votes
Zelda Kohn, Agent, Pleasanton, CA
Sat Mar 24, 2012

regardless of the "obligation", it is not a good idea to purchase a property without a knowledgeable professional representing you. You'd be taking a gamble on what is, probably, one of the largest investments you are considering to make now or even in your lifetime. From many years of my experience I found such transactions rarely work out. The home purchase transaction is not a trivial matter for people who do not buy and sell homes all the time.
0 votes
Sarah Goulart…, Agent, Plymouth, MA
Mon Feb 20, 2012
You have gotten good answers already. All you have signed is a disclosure, not a contract.

But, as others have said, you need to have someone working on your side who knows the ins and outs of purchasing and can protect you.

Good luck in your purchase!
0 votes
Christine Mo…, Agent, Wilbraham, MA
Sat Feb 18, 2012
Sounds like you only signed the manditory disclosure for Massachusetts. There is no obligation there it is not a contract. If she never showed you the property and there is no buyer agency agreement you can do what you want, just don't get robbed by your friend of a friend.
0 votes
Don Tepper, Agent, Burke, VA
Fri Feb 17, 2012
I'm not a lawyer, so this isn't legal advice. But if all you signed was a disclosure--and that IS possible--then there's no binding obligation.

However, recognize that there are documents to be completed, documents that probably should be reviewed by professionals, etc. If an agent were involved, he/she would do much or all of that. (Not a formal legal review, which is desirable but which lots of homeowners don't do.) Since your friend doesn't want to pay a commission, then you'll be footing the bill for all of that. Just something to consider.
0 votes
Stas Matias, Agent, Punta Gorda, FL
Fri Feb 17, 2012
It all depends if you signed a broker agreement with your agent. If you have then that agent is entitled to his share of the commission.
0 votes
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