Expert: Ray Beggs - 8/11/2007

Question
I'm a first-time home buyer in california without a real estate agent. I found a home which I liked & spoke to the listing agent & he agreed to be a dual agent. I signed an agreement with the real estate agent regarding this property. My offer for the home was rejected by the seller last month & the deal fell through. A couple of days ago, the seller called me directly (not sure how he got my number) & told me that he is not satisfied with his agent & that he wanted to sell the home directly to me (w/o our old agent involved) at a reduced price. Are there any legal complexities which will arise if I go ahead with this since the buyer is bypassing the real estate agent?

Answer
Hi BJ,

If the seller has (or had) a listing agreement with the agent, then there is a clause in there that says that if a buyer makes an offer on the property and they had looked at the property while it was listed, then the seller has to pay the agent their full commission regardless if they're involved in the transaction between the seller and the buyer. Those cases are pretty cut and dry, too. The reason that is in there is that if agents weren't protected by that clause, there would be a few unscrupulous sellers that would just tell the buyer to wait and come back after the listing expires and the agents would make no money.

As far as your liability as a buyer goes, you don't pay the agent, the seller does. (Unless you signed a buyers agreement with the agent.) Personally, I wouldn't buy a home in California without an agent for a couple of reasons. First of all, the agent will provide you with all of the necessary disclosures, inspections, title reports, etc. that will protect your purchase. The agent also has Errors and Omissions Insurance which covers the paperwork of the deal. The agent will make sure that your loan is going forward smoothly and that the appraisal, termite report and physical inspections are completed. I always equate buying or selling a home without an agent to representing yourself in court without an attorney. It's a pretty tricky process in California and I can't see one reason that a buyer wouldn't want an agent in California, especially since you don't pay them anything...the seller pays the listing AND the sales agent.

If you really like the house, I would go back to the agent and try to work it out with the seller. It sounds like to me, that the seller is getting anxious and is ready to deal.

Hope this helps and best of luck,

Ray