Brokerless Real Estate Transactions
Brokerless real estate transactions (BRETs) are becoming more common in the residential real estate market, as well as, the commercial markets. What generally started as a means by which sellers could save on real estate commissions, has grown to include buyers streamlining the buying process and splitting the commission savings with the seller. In addition, buyers and sellers often find one another before the first open house, thus reducing the number of days on market.
So, why has the BRET market grown so fast? Sites like Trulia and Zillow are important factors. Sellers are able to list their homes for free on those websites without having to list their house with a real estate agent. Similarly, Buyers often first visit Trulia and Zillow to create a list of homes they would like to purchase before hiring a real estate broker. If the home is not represented by a real estate agent, then the buyer will simply call the seller herself.
Another major factor is the ability for buyers and sellers to find one another through social media. Sellers often post their home for sale on Facebook and other social media platforms. Whether the buyer has a direct connection to the seller is often moot because friends share, like, and retweet, and eventually a buyer will say, Hey! Im looking for a house in that subdivision!
Of course, a buyer and seller finding one another is only one part of the purchase and sale process. Contract management is just as important. Traditionally, buyers and sellers have relied upon real estate brokers to assist in the contract process, but brokers often still want a large commission even though the buyer and seller have found one another. Today, many buyers and sellers call upon real estate attorneys that offer turnkey solutions for a simple and relatively inexpensive flat fee as compared to real estate agents.
In a BRET, the real estate attorney will draft the real estate contract, assist in the negotiations, draft amendments to the contract, as needed, help choose a title company and manage that process, and draft a deed, if required. Additionally, and this is the real important part, the real estate attorney will be generally available to answer legal questions that often arise during any real estate transaction.
Times have changed. Sellers and buyers can easily find one another in a hot real estate market. And real estate attorneys are available to assist them with the transaction. BRETs are here to stay.
Robert Newton is an attorney based in Frisco, Texas, that practices real estate law, estate planning, and business law. This post is meant for informational purposes only and does not constitute legal advice.