Working with an Unrepresented Buyer

It happens more than people expect.

The offer comes in, it is the one you want, and the buyer has no broker and no intention of hiring one.

That is not automatically a problem.

It is a different transaction, and the agency line needs to stay very clear.

The first thing to be clear about

I represent you.

Not them.

That does not change because they are sitting across from me without anyone of their own.

Washington law still requires a broker to exercise reasonable skill and care, deal honestly and in good faith, timely deliver written offers and notices, disclose known material facts that are not apparent or readily ascertainable, properly account for money and provide the required agency information.

Those duties are owed to all parties.

What the unrepresented buyer does not receive from the seller's broker are the additional duties owed by a buyer's agent, including loyalty and advocacy for the buyer.

That difference matters.

This is not dual agency

These two get confused constantly.

They are not the same thing.

Dual agency requires the broker to represent both buyer and seller.

An unrepresented buyer has not hired the listing broker as their agent, so the listing broker remains the seller's agent.

It only becomes limited dual agency if the listing broker also agrees to represent the buyer and both principals provide the required written consent.

My preference in that situation is normally to have one side represented by another broker instead.

I went through the reasons in Limited Dual Agency, and Why I Usually Avoid It.

What actually lands on my desk

With two brokers, each side has somebody responsible for their client's part of the transaction.

With an unrepresented buyer, more of the transaction coordination lands on the listing side simply because there is no buyer broker doing it.

That can include:

• Coordinating access for the buyer's inspector and appraiser
• Communicating directly with the buyer and their lender about transaction logistics
• Coordinating negotiated repair access
• Working with title and escrow through closing
• Tracking contract deadlines that affect my seller

What I am not doing is becoming the buyer's adviser or preparing their side of the transaction as though I represented them.

They remain responsible for their own decisions and can hire their own broker, attorney, inspector, lender or other professional when they need advice.

That boundary protects everybody.

Making sure they can actually buy it

This is the part that protects the seller, and it is the part I will be stubborn about.

I want solid financing documentation.

People use "pre-qualification" and "pre-approval" differently from lender to lender, so the label alone is not enough.

A meaningful pre-approval normally involves more review of the buyer's credit, income, assets and debts than a basic preliminary conversation, but it is still not a guarantee the loan will close.

Underwriting, appraisal, property condition and final verification still matter.

So I look at what the lender has actually reviewed and, when appropriate, communicate with the lender within the boundaries of the transaction.

If there is a large down payment or the offer is cash, I want reasonable proof of funds.

The point is not to pry into the buyer's life.

The point is to help my seller judge whether the offer has the resources behind it to close.

“This is the part that protects the seller, and it is the part I will be stubborn about.”

The communication problem

With two brokers there is a buffer.

Everything generally goes broker to broker and both clients have somebody explaining the transaction from their side.

Without a buyer's broker, I am talking directly to the buyer.

That creates a risk that the buyer starts to treat me as their agent simply because I am the real estate broker answering the phone.

So I make the relationship clear.

Washington law requires the real-estate-agency pamphlet to be provided to an unrepresented party before that party signs an offer, or as soon as reasonably practical, and it requires written agency disclosure before the parties reach mutual agreement.

I would make the distinction clear anyway.

A buyer who understands who I work for is much less likely to feel differently about it halfway through escrow.

Does it save you money?

Maybe.

It depends on the listing agreement, the offer and your net.

Your listing agreement addresses compensation for the listing firm, including the situation where a buyer is unrepresented.

I broke down the compensation structure in How Real Estate Compensation Works.

What I would not do is treat an unrepresented offer as automatically better just because no buyer broker is involved.

Price matters.

Terms matter.

Financing matters.

Inspection risk matters.

Probability of closing matters.

The offer that costs the least on one line of the settlement statement is not automatically the offer that leaves the seller in the best position.

“An unrepresented buyer is not automatically a red flag and not automatically a bargain.”

How it went on my own listing

I have been on this side of it.

A split-entry in Mountlake Terrace that I listed sold in February to a buyer who did not have their own broker.

It closed.

It also meant more direct coordination came across my desk rather than being divided between two brokers, and it is one of the transactions people have asked me about the most.

Which is most of the reason this article exists.

The bottom line

An unrepresented buyer is not automatically a red flag and not automatically a bargain.

The listing broker still represents the seller.

The buyer still receives the protections Washington law gives every party, but they do not receive buyer-agent loyalty or advocacy from the seller's broker.

The clean version is to say that out loud, put it in writing and keep the line there all the way through closing.

If you are weighing an offer like this and want to understand what it means for your sale, send it over.

Sources: RCW 18.86.030, RCW 18.86.040 and Washington's Real Estate Brokerage Relationships Act. This is general information about Washington real estate agency, not legal advice.