As a buyer of property in California, the commission that your real



estate agent receives is paid by the seller of the property.

Therefore, for all of the work he or she performs in ensuring that the

proper forms are all used and completed correctly (and in California

there are a huge number of forms used in real estate transactions) and

for all of his or her advice and assistance, you pay nothing.

There is thus no reason to attempt to purchase property without an

agent. And if you think you know what forms need to be used,

think again. The forms used by most agents are constantly

changing and only agents who keep up with these changes know what forms

have been added in recent months.

There is also no reason to allow the seller's agent act as your agent

as well. For an agent to act as the agent to both the buyer and

the seller often puts him in an un winnable situation. If there is

something wrong with the property, he must disclose it But how

hard will he look for things that can spoil the sale if he is losing

both sides of a commission and if he has loyalties to both the buyer

and the seller of the property? A good agent will disclose

everything. But why would you want to put one agent in that

situation when you can obtain your own independent agent to advise you,

and still not have to pay him a dime since he receives his commission

out of escrow from the seller's proceeds? The answer is, get your

own agent.

As the seller of property in California you will likely pay on average,

a 6% commission, split in half between your agent and the buyer's agent

on a home, and a 10% commission, on average, split between your agent

and the buyer's agent on land. Here is where the real temptation

to a seller lies.

In the effort to save up to half of the commission (since you will

still likely have to pay the buyer's agent half of the normal

commission), the frugal seller will try to avoid every cost he or she

can. They will not use an escrow agent. They won't get a

title report. They will even try to avoid buying title

insurance. And if they manage to talk the buyer into buying the

property without an agent as well in return for a discount in the

price, you have the situation of the blind leading the blind.

As a (as well as a realtor), it is no wonder that this is

the type of client who calls or comes in for a consultation to our law

firm complaining that they sold their property but were never paid, or

that they bought property and took out a huge loan and never received

clear title, or that their loan isn't the type of loan that they

thought they were getting.

The situations even get worse. Not only do such buyers or

sellers not get what they thought they would get out of the

transaction, they normally get a bonus. They get sued as well by

the other party. And if any of the normal purchase and sale forms

are used for the transaction, the form likely provides that the person

who prevails in the lawsuit is entitled to his or her attorney's fees

and costs. In a complicated real estate transaction where none of

the normal formalities were followed, those attorney's fees and costs

can easily run into the tens of thousands of dollars.

The choice is simple. If you want to save money in a real estate

transaction, and sleep well at night, use a Realtor. If you want

to run the risk of losing your property and paying an attorney to

defend you in a lawsuit, go it alone.