A case study in letting the seller's agent write the offer, and what it cost

Worth studying as a cautionary example for first time buyers. Take a two bedroom condo in a 1980s complex listed at $189k, purchased without buyer representation. The listing agent, present at the open house and helpful throughout, offers to write the offer as a dual agent and has the buyer sign a consent form on the spot, often literally inside the unit being purchased. Here is how that plays out in a typical case. The buyer offers full price, $189k, on the first day of the second weekend, after being told the seller has strong interest. Two comparable units in the same complex sold in the prior ninety days at $176k and $178k, information that was public on the county site but not surfaced before the offer was written. Inspection then finds a failing water heater and evidence of a slow leak at the shower pan, with repair quotes around $6,300. The dual agent presents it to the seller, reports the seller will not budge, and suggests the buyer absorb it since the price was fair. The buyer absorbs it. Call the total gap $11k to $12k against where the buyer should have landed, plus the water heater repair on top. The lesson generalizes cleanly: pull the last six months of closed sales in the building before writing any offer, and have someone who works only for the buyer review the number before it is signed. Signing a dual agency consent form is not the mistake by itself. Signing it without having done any independent homework first is.

raj_mehta14 PF4BPRO 10

Answer

omar_haddadPassivePRO

@joe_delgado5 is half right and half wrong. The comps failure was yours and you've already named it. But dual agency changed the shape of the inspection conversation and that's the $6,300.

Here's what I mean mechanically. When you have your own agent, the repair request goes out as a demand with a number attached and a deadline, and your agent's job is to make the seller believe you'll walk. When one agent holds both sides, she isn't allowed to advocate your price position against her seller, so what actually goes across is a summary. "Buyer found some issues, here are the quotes." The seller says no. There's nobody whose job it is to say the next thing.

And notice what she said back to you. "Absorb it since the price was fair." That's a judgment about price, delivered to the buyer, in a transaction where she also represented the seller. In most states that permit dual agency the consent form specifically bars the agent from advocating a price position for either side, so depending on how your state's statute reads that comment may have been outside what she was allowed to do. Whether it rises to anything actionable is a question for a licensed attorney in your state and probably not worth chasing over a water heater.

For next time: request repairs with three things in hand, a written contractor bid, a specific dollar credit, and a response deadline in the contract's own language. A neutral or a dual agent will still forward a document. Give them a document that does the arguing.

omar_haddadPassivePRO

6 replies

megan_doyle15PassivePRO

Signing on a tablet in the kitchen of the place you're buying is going to stay with me. I would have done the exact same thing.

megan_doyle15PassivePRO

joe_delgado5ActivePRO

You'd have overpaid with your own agent too. Full price on day eight with no comps pulled is a comps problem. Plenty of buyer's agents would have written that same offer and told you it was a good deal, because their check gets bigger when yours does.

The $6,300 is the part I'd be annoyed about. That's where a second voice would actually have shown up.

joe_delgado5ActivePRO

jessreyes12ActivePRO

Asking because I don't know. If she'd said "I represent the seller, you should get your own agent," would that have cost her money? Or does the seller's fee already cover both sides and she just picks up the second half?

jessreyes12ActivePRO

sonia_alvarez CB4APRO 17

@jessreyes12, she would otherwise have given up the buy side of the commission, so on a $189k sale at 2.5 percent that is around $4,700 to her. That is the whole reason the tablet came out in the kitchen. @raj_mehta14, the ninety day comps at $176k and $178k are the number to keep looking at. Two data points in the same complex is about as clean as residential comps get. Fifteen minutes on the assessor site before the open house and none of this happens.

sonia_alvarez CB4APRO 17

bmoreno23ActivePRO

I nearly did this last spring on a townhouse and the only reason I didn't is that the agent's phone died mid-form. Went home, looked at three closed sales, and the place was priced eight percent over all of them. @omar_haddad's point about handing them a document that argues for you is going in my notes.

bmoreno23ActivePRO

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