Unrepresented Buyer Wants to Make an Offer on Agent's Listing
Updated: Nov 21, 2022
It's important to note the following:
A. Even if there is a deadline on offers, sometimes, but not always, buyers and sellers will be willing to agree to something prior to the deadline if the offer from the buyers is particularly enticing, especially in cases with a long deadline. Expeditious showings after properties hit the market & expeditious offers are very important.
B. Be sure to include a preapproval &/or proof of funds with your offer.
There are a variety of options for how you could go about an offer:
1. The typical approach, which around 86% of buyers opt for, is to make an offer with an agent. There are different approaches to that:
Designated Agency: Listing Agent Represents Seller & An Agent from the Same Firm Represents Buyer (Adam's #1 Recommendation if You're Looking to Buy His Listing & Use an Agent While Not Currently Working with One)
Even within this category, there is more than one option:
1. (Adam's #1 Recommendation if You're Looking to Buy His Listing & Use an Agent While Not Currently Working with One) If you're not already working with an agent at the listing agent's firm, & don't have an existing exclusive buyer brokerage agreement with another agent going, you can reach out to the listing agent for a referral to another agent. By reaching out directly to the listing agent, you can have a higher likelihood of the listing agent connecting you with an agent that they are comfortable with and that they have worked with in the past. When I am representing the seller, and refer buyers to an agent, it's typically my father, Greg Garrett, who may have helped more buyers/sellers to close on real estate transactions in my primary coverage area than anyone living. Who was #1 in many cities/counties in my area for years. My father may not always be available though, and it's best to reach out to me in this scenario for the best option.
Be sure to let Adam know if going this route about if you'd like Adam to represent you if this property doesn't work out or if you're an investor who would be looking to buy again right after closing and would want to work with Adam at that time. That way he can let the agent that he refers your way know in order to set expectations. Here's more information on what Adam offers buyers.
2. If you're already working with an agent at the listing agent's firm other than the listing agent, you'll be involved in an offer where if you get under contract, a designated agency would be involved.
3. If you're not already working with an agent at the listing agent's firm, & don't have an existing exclusive buyer brokerage agreement with another agent going, you can reach out directly to another agent at the listing agent's firm.
Dual Agency: Listing Agent Represents Buyer & Seller
Have the listing agent attempt to represent them while also representing the seller. This practice, dual agency, is so fraught with problems that it's illegal in some states (not VA) and prohibited at Garrett Realty Partners.
Using an Agent Outside of the Listing Agent's Firm
If going this route, there is more than one option:
A. Seek a referral from the listing agent
Some buyers may have misgivings about working with an agent at the listing agent's firm, but would still like somewhat of an edge on the competition by at least getting a referral from the listing agent to another firm. Listing agents who have been around know plenty of agents, and it's possible that they've worked together before even if they are no longer at the same firm.
B. Pick your own agent
Some buyers may have misgivings about working with an agent referred to them by the listing agent. If that's you, feel free to pick your own agent that's outside of the agent's firm. There's nothing locking you into getting a referral from the listing agent. That said, before doing so, see the section on "How A Referral From the Listing Agent Can Help".
How A Referral From the Listing Agent Can Help
Most of the time that homes are purchased in SE VA, it's not with 2 agents at the same firm. When you're unrepresented, you have the flexibility to go that route though if you should choose to do so.
The problem with an unrepresented buyer reaching out to an agent other than the listing agent to find an agent is that by not reaching out directly to the listing agent, the listing agent won't have as good of a relationship with you & the buyer's agent than if you did. There are many non-numerical factors related to an offer's success, and something like that can matter, especially in a multiple-offer scenario where the 2 offers are very similar. While reaching out to an agent at the same firm is better than nothing, at an agency like mine where >100 agents are present, some agents are a lot better than others, & I have much better relationships with some agents vs others.
When Not to Seek a Referral from the Listing Agent
If you're already working with another buyer's agent, with an exclusive buyer brokerage agreement with that agent, you should not seek a referral from the listing agent. You shouldn't try to get out of your buyer brokerage agreement just to get a potential edge on the competition for an offer.
2. Unrepresented Buyer (No Agent Representation)
Your Chances of Making a Mistake
If you go this route, you have the highest risk of making a mistake, especially if you haven't purchased many homes before. The listing agent should be honest, but it would be against their duties to the seller to point out any negatives about the home that you didn't ask about.
Increased Risk for the Seller
Unrepresented buyers tend to be more volatile than ones that are represented by agents, unless the agent is known to be unusually volatile. Sellers should know that. I inform my sellers of that. Higher-risk buyers are worse than buyers with the exact same offer who are not high risk. There's a lot more to an offer than all the numbers involved, and risk can contribute highly to the success of an offer because it impacts those potential numbers for the seller.
Reduce Commissions for Sellers
While not always the case with listing agents, with some agents, including myself, you may be able to have the listing agent reduce their commission to account for no commission for the buyer's agent. Often it's not a completely free ride though, & it never is with me. The listing agent will need to spend the extra time for duties to help facilitate an offer and other elements of a transaction with a buyer.
How to Better Your Chances if Buying Unrepresented
If going this route, and you've purchased a number of homes, and especially if you've passed the real estate exam or even just taken the class, be sure to inform the listing agent of that. Give positive details if known (i.e. I passed the real estate exam last month, even though I'm not an agent; I've purchased 10 homes before and sold 5 in the past 10 years). If you have related experience, such as if you're a contractor or lender, be sure to let the listing agent know.
Offer Template
Reach out to the listing agent for a prepopulated offer form that already includes information specific to the transaction in the event that you want to make an offer without representation. That's not difficult for them to do. From there, you can decide what you want to put into it.
Here is a list of the most important items that the seller is considering (note the importance column). Here is an example of a competing offer scenario.