Often, home buyers ask themselves, “Why do I need a Buyer Agent?” Here in Charlotte NC,
my answer is, “Because you need someone to represent your interests, and if you don’t have that, it will show itself at the worst possible time-like when you are talking money.” Many don’t know that I speak from first hand experience. This happened to me when I was not quite 30, my agent was a little younger, and is a great illustration of why Buyers ALWAYS need a Buyer Agent.
Back in the late-80’s, long before I was in real estate and knew anything about buyers agency or sub-agency, my family was looking for a house. I was in business for myself, had a home office, but needed more room, a separate building was the first choice. I’d been getting listings, and doing what all buyers do, driving by them and marking them off my list. After a few weeks of unsatisfying searches, I decided we needed to look at this one house dismissed earlier in the week, even though it had a less than impressive front and seemed over-priced, the listing said it had some features we were interested in. (Long before photos or the Internet!)
That Saturday our agent took us to see it. We went immediately to the home’s rear (what was of most interest had to be there) where we found what the listing called a “barn” but actually was quite different: it had about 2500 square feet, 1000 sf finished with 6 telephone lines underground, fully plumbed etc. It had its own driveway, separate entrance, and to top it off a wonderful inground gunnite pool 100′ from the office (barn) front door. It was truly a diamond in the rough. It sat on 1.75 acres and as we walked to look at the main house, I said to my wife, that since a) we had just looked at $100K of improvements, b)I was in business (remodelling/design) for myself, and this back area met my needs exactly,and c) even if the house was a wreck, I’d fix it, so without seeing the main house I bravely told her we should make an offer. Surprisingly, she still wanted to see the main house. 🙂
So we did. It had new carpet, a surprisingly open floor plan, new paint and remodeled baths… it wasn’t bad at all, in fact the interior was much more than we expected from the over-grown front we had seen upon entering.
While we were there, two other couples were viewing the property- and they, like us, were staying a long time.
As we were leaving but before reaching the car, I said to my agent quietly, “I want that house… lets not screw around, write up a full price offer and get it off the market tonight.” I knew it was one of a kind- knew it fit our needs better than anything we would find, it seemed just what we had wanted. He was happy.
After writing the full price non-contingent offer, our agent submitted it and found the Listing Agent was out of town until Monday, so he couldn’t present our offer before Monday, so there wasn’t going to be any “getting it off the market tonight.” On Monday, he spoke to the Agent and she said she would be presenting “All the offers- all three, to the seller” later in the day. My Agent called me, told me the news and added he thought if we really wanted the house, our offer might be in trouble and we might need to do more. “How much more?” I asked an he said he didn’t know. I hung up and told him I’d call him back.
In those days, offers were registered with the broker office– so the other two offers knew of our offer, but of course we hadn’t known about them. I paced in my office a few minutes, then called him back and gave him the go ahead to raise our offer $10K. He called me back about 7 pm and told me we got the house, that all 3 offers were over asking, and that one was $2000 over and the other was $8,000 over asking.
The events above are what I was told happened, and believe happened, but let me present an alternative scenario, based on what I now know about Agency and real estate.
Alternative Agency Scenario- All Agents represent sellers
Remember, this was in the late-80’s, we were all young, and this was a few years before buyer agency started to become common. Imagine an older more experienced Listing Agent inviting my 20-something Agent over to the Sellers (who were in their 50’s) house… introductions are made all around, and then the Listing Agent turn quickly to my agent and says something like this: “Now David (my agent) remember who you are working for, you represent this man and woman, Mr. and Mrs. Seller… and then the sharp angle question, “Will your couple pay more for this house?” and a silence follows– and if my agent so much as pauses, they know the answer… Following the law, he is obligated to share that I might, and also that “this house meets their needs exactly, they love it, and yes I think they would pay more for it…he (me) said “Don’t screw around, get it off the market tonight.”
That is what I meant when I said above, “Each buyer needs their own representation, and if they don’t have it, it will show itself at the WORST POSSIBLE TIME.”
That is the conundrum of real estate agency laws without buyer agency. That is why more than 30 states now have Buyer
Agency laws. This is what we face in North Carolina in the absence of a Buyers Agency agreement, the default setting in North Carolina is: All Agents represent the Seller. In the absence of a Buyers Agency agreement, I am legally obligated to represent the Seller, and if you have shared personal confidential information too bad for you. Luckily, this will NEVER happen with me as your Buyer Agent. Let me explain.
Now lets replay the above Alternative Scenario, but this time I am represented by a Buyer Agent, here in North Carolina. When the Seller’s Listing Agent asks, “Would your Buyer pay more?” My only response would be, “Would you like to make a counter- offer?”
Buyer Agency removes the obligation to represent the seller, now we only are required to tell the truth, and now the expectation is that I represent the Buyers and negotiations can continue on a fair field. And that is as it should be, and how it is if you hire me, to help you buy a North or South Carolina home.
I learned lots of lessons over the years from this one personal real estate transaction… We stayed only a few short years, sold the house myself (FSBO) at a terrific profit (I’ll share how in a future post) and moved on. And David, if you read this, know I still believe you did the right thing by us so many years ago!
I will continue Buyers Do’s and Don’ts in part II next week. Search for Charlotte Real Estate?
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