In the post-NAR world, more buyers are choosing to buy a home without an agent. Diving into the California real estate market without a buyer's agent might seem like a cost-saving measure, but beware--court cases and past litigation suggest that it is fraught with dangers that could lead to financial disaster. Given the changes brought about by the 2024 NAR Settlement, this post aims to explain what it means to be an unrepresented buyer in California, what you can and cannot do, and how to make the most of the resources available to you without creating an agency relationship. For those daring souls venturing solo into the realm of home buying, it is essential to understand the unique challenges that lie ahead.
What is an Unrepresented Buyer in California?
An unrepresented buyer in California, also known as a “direct buyer” or “solo buyer,” is someone who chooses to purchase a home without the expertise and protection of a buyer’s agent. This means that instead of having a professional advocate negotiating on your behalf, you’re taking on the responsibilities typically handled by a buyer’s agent. While the lure of saving on buyer agency commissions might attract you, the risks and complexities of this choice should be thoroughly understood and researched. What seems like a bargain upfront may just be a mirage that will ultimately cost you a lot of money and emotional stress.
Communication
Unrepresented buyers should communicate with the listing agent regularly to avoid misunderstandings. The listing agent is the seller's ally and cannot negotiate on behalf of the buyer. Remember that the listing agent's primary relationship and fiduciary duty is to the seller, not you.
Access to information
The law ensures that unrepresented buyers have access to essential information to make an informed decision. This includes disclosure forms and advisories.
Paperwork
Unrepresented buyers are responsible for writing their own offers, obtaining financing, and all other paperwork. They may need to use public versions of forms, or have an attorney author them. The buyer will have to take full responsiblity for a process filled with third parties like title and escrow, inspectors, banks, and plenty of legal jargon, complex negotiations, and room for rookie mistakes. It may be a wise investment to have an attorney guide you through the paperwork.
Tours
Unrepresented buyers can get a tour by calling the seller's agent or owner, but they will receive a disclaimer that the agent only represents the seller.
Forms, Disclosures, Advisories, and Information for the Unrepresented Buyer
As an unrepresented buyer in California, you can communicate directly with the listing agent. To avoid becoming part of a dual-agency scenario—where the listing agent represents both the buyer and the seller—be clear about your role in the transaction. Remember that the listing agent is the seller’s confidant and ally, not yours.
It’s important to clearly communicate to the listing agent on a regular basis that you are an unrepresented buyer to avoid any misunderstandings. The listing agent cannot negotiate on your behalf or advise on the meaning of information provided. The listing agent can provide available property information which might include public records, disclosures, and inspection reports commissioned by the seller.
Even as an unrepresented buyer in California, the law ensures you have access to essential information to make an informed decision. These documents may include:
Disclosure Forms such as the TDS (Transfer Disclosure Statement), SFSD (San Francisco Seller Disclosure) and others. These form provides crucial information about the property’s condition as known by the seller.
Advisories may include documents such as the Statewide Buyer and Seller Advisory (SBSA) or Market Conditions Advisory (MCA). These documents generally cover potential issues in a property purchase, including environmental hazards, legal considerations, current market conditions and how they might affect your purchase.
Transactional Documentation: Agency Disclosure, Non-Agency Disclosure, Purchase Agreements, Addendums. California has multiple documents from a variety of vendors that can be used for the purchase of real estate. These include the contract you’ll submit with your offer which outlines terms and conditions for the sale.Interaction with the Listing Agent to Avoid Dual Agency
Conclusion
While you may save on commissions and enjoy direct control over your home-buying process, being an unrepresented buyer requires a high level of research, diligence, and confidence. While the thought of saving on commissions can seem appealing, the risks and challenges often outweigh the benefits. Without the expertise, protection, and negotiation skills of a real estate buyer’s agent, you’re setting yourself up for a potential financial disaster.
And with all that said, unrepresented buyers are entitled to access essential forms, disclosures, and advisories – and real estate transactions are often complex and riddled with potential pitfalls. By choosing to buy a home without a buyer’s agent, you may jeopardize your financial safety, expose yourself to higher risks, and miss out on crucial insights and opportunities. Safeguard your home purchase and ensure a smooth, successful transaction by enlisting the expertise of a professional real estate buyer’s agent. If you are buyer who is not represented by an agent, but still looking for the expertise and guidance of a real estate professional, please reach out to us to discuss your needs.
Comments