Here’s a recent, true story. A friend of mine, let’s call him Jim, had been very casually looking for a home. I had done some searches for him and even showed him a couple of homes, but he and his wife were in no hurry. The plan was that they might like to downsize, so if they bought a house they would rent it out until they were ready to move in a few years. A little over a month ago they were out for a Sunday drive and saw a perfect house – and there was an ‘open house’ being conducted. They absolutely fell in love with this house.
Jim is a mechanic and the house didn’t have a garage, but the lot was big enough to accommodate a garage, according to the listing agent. They walked out to where the lot (supposedly) ended, and promptly wrote an offer which was accepted. The listing agent did ask Jim if he was working with a Realtor®, and Jim did think about me, but he thought that he could get a commission discount by going through the listing agent – after all she was going to get the whole thing – no split with another agent. Well, as you might guess, that didn’t happen.
The process continued, and literally at the closing table, Jim and his wife found out that the lot dimensions explained to him were incorrect. In fact, the lot ended about 8 feet from the side of his house. No room for a garage. The sellers were unaware of their agent’s lot line representation to Jim and his wife. It might have been an innocent mistake by the agent, or that she was excited with having a ‘live’ buyer in this slower market and didn’t take time to make sure that the info was correct.
Jim is a good guy. He and his wife just loved the house anyway and didn’t want to mess up the plans of the sellers, so they went through with the closing and bought the house.
He called me the next day to ask if he had recourse. Of course he had a number of options to pursue, all of which would cost him in time, energy and legal fees. He decided to negotiate with a neighbor to buy enough of the adjacent lot so he could build the garage.
Jim is like the rest of us. We all need to make our money stretch. In this case, he thought he could save on the purchase price by getting the listing agent to kick in part of her commission. Of course, that never happened. But more importantly, he was working with an agent who had fiduciary responsibilities to the sellers, not to him and his wife.
If he had been working with a Realtor serving him as a Buyer’s Representative, that agent would have verified all of the details of the listing, reviewed the title work, and made sure that the seller provided a survey. If there were discrepancies, Jim would have had an ‘out’ in the contract, or at least we could have re-negotiated the purchase price. In this case he will pay more because he has to buy land from the neighbor.
I would certainly represent myself in a Real Estate transaction with the knowledge, experience and skill that I have obtained in my field, but I wouldn’t attempt to make a major mechanical repair on any of the family vehicles. Real Estate transactions can be very complicated, and while some transactions are conducted without the aid of a Real Estate professional, my belief is that they will go smoother, be less stressful, and you’ll have fewer surprises than if you try to do it on your own.
Jim did tell me that he will always be represented in future Real Estate transactions, but it was a tough - and expensive way to find that out.
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