Sure, you can go it alone. Absolutely.
You’re out cruising the hood and you spot a sweet 4BR brick ranch with a Geller Williams sign in the yard.
It is July 2024 and the rules have changed. Lot of home buyers are now paying their own realtors. Or relying on the seller’s agent to handle the paperwork for both sides. (That’s your plan.)
Zillow says the place is listed at $599,900. Do you really need a buyers’ agent charging you 2 or 3 percent? Fly without one and you can save 18 grand!
Is the house worth 600K? Who knows. That’s the appraiser’s job.
You call Geller and start talking tough. “I want to see that place on Apple Street. Get your butt over there in one hour.”
You sign an online form called an agency agreement, whatever that is. It says Geller will treat you as a “customer” with no fiduciary duties.
Heck you didn’t want fiduciary duties anyway. You wanted a house.
Soon you’re in paper booties, sliding across gleaming hardwood floors with your new friend Geller. He is putty in your hands.
You sign a contract to buy. Seventeen pages of legalistic claptrap. You drop off a check for $8,000 at the title company. Earnest money. Whatever.
Dates and deadlines. Five days to inspect? Geller says it’s plenty.
Now about that six-hundred grand. You’ll need a loan. But great news! The seller has assumable VA financing with a 2.5 percent interest rate.
Fantastic! Picture those payments. They’ll be half of anything you could get today.
But wait. His remaining loan balance is only $195,000. That’s the full extent of any potential loan assumption. The contract price is 600, so where will the other 405 come from?
You head into Wells Fargo, to the home loan department. Damn paperwork never ends. You fill out an application. Loan officer heads out to lunch and says he’ll let you know.
Days have passed. Do we really need a professional inspection? Geller says no. Just to be safe, you call Jim—he’s bought houses. Even had a carpet cleaning company before he got into crypto. Jim is your next door neighbor.
He says the place looks fine. What about those water stains on the ceiling? Could be a roof leak, he says. Jim doesn’t have a ladder.
The appraisal is set for Tuesday. It’s a formality, according to Geller. Banks won’t lend without an appraisal. Guy comes out, pokes around. Measures some rooms,
Two days later, Geller calls. “I have good news and bad news,” he says.
“Bad news first,” you say.
“The house didn’t appraise.”
“It damn sure did,” you respond. “I was there peaking though the window.”
“I mean it didn’t appraise high enough. Came in at 575.”
“What’s the good news?”
“We’re still under contract. You didn’t have a contingency,”
No appraisal contingency? Then why did we appraise?
Banks won’t lend without an appraisal. The logic is unassailable, but Geller is becoming a prick.
Bottom line, you’ll need to find more cash to close the deal. That or walk away without your earnest money.
“Lose my eight grand?” you say. “No way.”
You call Jim. Bitcoin has had a run and he agrees to front you 25K.
Closing is a week away. You keep cruising past the house. Other homes in the area have snazzy ground-level pumps with pipes running up to the roof.
“Radon mitigation” says Geller. Those homes have been fitted with systems to suck radon gas out from the basement. Radon is carcinogenic and it’s common in older homes, according to the EPA.
“Why didn’t you say something about this before?” you ask.
Geller shrugs. “Busy.”
At closing he is seated at the table, poring over financials with the seller.
You review your own settlement statement. Your costs include a closing fee, appraisal fee, and a big fat loan origination fee. Plus fees for loan processing, county-level recording, and a tax stamp. The rep says it’s all kosher.
It’s your last chance to complain to Geller about his crappy contract and the failure to mention poison gas in the basement.
“Why didn’t you warn me? Don’t you have some kind of…”
“Fiduciary duty?” he interjects. “No sir, not to you.”
“But I’m your client.”
“Customer. To me, you are merely a customer.”
The way he says it sounds like, to me you are like a discarded lawn ornament.
With no agent expenses you have saved thousands of dollars. But somehow it seems like a lower purchase price might been had. Could better loan terms have been negotiated? And what sort of inspection issues might have been found and fixed?
You close the purchase and head out for lunch, alone, with what little cash remains in your wallet, to McDonalds, where you hope they still know something about customer service.
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