Some sellers, willing to perform part of the brokerage work themselves, list their Property with discount brokers, who offer a seller limited services for a reduced commission. You need to understand this relationship because if you run into one, you as a buyer will also be expected to do part of the work by yourself. Most often, the broker saves time by making appointments but sending you to view houses on your own. You may be offered less help with mortgage financing. Because discount brokers usually belong to a multiple listing system, however, you can probably view their listed homes through other brokers, who can provide you with more service if that is what you want.
Now that you’ve mastered the duties of buyers’ and sellers’ agents, it’s time to find out whether your state also provides for transaction brokers, dual agents, facilitators, and whatever.
A facilitator, or transaction broker, usually represents neither party to the sale. Instead of fiduciary duties, the broker or sales lerson simply offers expertise and negotiates between the par ties. The law, in states that provides for this status, usually requires simply honest and straightforward dealing, but may set up vary ing other duties as well. You would want to ask if confidences are kept and just what the agentís duties would be.
In some states, a dual agent is allowed to represent both par ties, with no duty of confidentiality or notice. The role is a delicate one, for itís impossible to provide first loyalty to both buyer and seller.
Sellers who handle their own property are known as FSBOs (fizz-bo, For Sale By Owner). You are more likely to meet them today than you would have been a decade ago. Perhaps one house in ten was sold directly by the owner in 1990; the figure is approaching 20 percent today. Some do it for the satisfaction of tackling an unaccustomed job, but they’re not doing it just to pass on the saved commission to you. They usually plan to sell at fair market value and pocket the commission as extra profit in return for their efforts.
You will have extra work when you buy directly from an owner. Unless you retain your own broker, you’ll have to negotiate face to face, seek extra attorney input into the written contract, explore financing options on your own, and ride herd on your own mortgage application process. It may be extra important to have your own building inspector look the property over before you commit to buying.
There are two situations in which you might want to deal directly with a FSBO:
1. The property is unique, and you feel strongly attracted to it.
2. The place has been underpriced by a FSBO who chose to do without the services of an appraiser as well. In that sit uation, be prepared to act promptly; some investors lie in wait for unwary FSBOs and jump as soon as underpriced property hits the market.
It is generally a waste of energy to start your house hunting with FSBOs. Until you have a good grasp of prices in the area and the entire homebuying process, it’s difficult to deal with home owners who often have an exaggerated idea of a home’s value and who don’t know how to proceed. Wait until you, at least, know what you’re doing.