Like many buyers, Diane and her husband believed they could negotiate a better deal on a house if they weren't represented. Then they crossed the threshold.

Here's what they wrote to Realty Times:

"My husband and I decided we did not want to hire a buyers agent. The main reason was because we thought we might negotiate a better deal on a home. The other reason was that we preferred to search the MLS listing and homes online and drive around and look at them by ourselves.

"We found a home on the MLS listing and called the listing agent to setup an appointment to see it. The agent who showed us the house (let's call him Matt) works for the selling agent (part of her team), but he said that it was better for him to show us the house because he could answer questions that the selling agent couldn't, but he also clearly stated he could not advise us as he was not our buyer's agent.

He asked us if we wanted buyer representation (by him), but we said no ... and we were up-front that we wanted to remain free so that we could negotiate a deal (6 percent commission involved).

We emailed an offer to the agent that showed us the house (who appeared to be working as an intermediary between the selling agent and ourselves). The sellers counter-offered and then we countered back and they accepted the price via a phone conversation with Matt.

At this point we asked Matt what the sellers agent was going to do for us. Basically the answer was nothing. So we thought to ourselves, "What's the point of going unrepresented. So we hired a buyer's agent and submitted a purchase agreement with the same stipulations as we had previously negotiated via email. Our new buyer's agent was willing to split his 3 percent commission with us and we also disclosed this in the purchase agreement .

Matt and his team threw a fit. Understandably I guess because they thought they were going to get the full 6 percent. He was angry we didn't choose him to be our buyers agent, but honestly we did not feel he would could possibly be impartial given that he is basically the selling agents partner.

Anyway, they rejected our purchase agreement because they say that my buyers agent is not entitled to the 3 percent commission money since he was not the first to show me the home -- Matt was. But isn't that what a listing agent is supposed to do? We just don't get this. Have you heard of this before? Have you ever heard of anyone going in unrepresented and then changing their minds before the purchase agreement contract was actually drawn up?

We live in Georgia. I'm curious if you know the name of the law that would govern this situation or where I can read more about it online. I could understand if Matt had solicited me somehow but we found the house online and wanted to see it. How else could we have remained free agents and seen the house? Now we are not sure if we are still free agents or if Matt is somehow our agent even though we never signed anything with him. If you have time I'd be interested in hearing your thoughts."

Thanks, Diane

Realty Times replies:

We don't give legal advice, so all we can do is tell you how real estate works.

The short answer is that you have just hit upon one of the most confusing situations in real estate, and that's why agency disclosures are required by most states.

I don't know whether or not Matt disclosed how agency works in his state or not, but he should have to avoid this situation whether he was required to or not. He should have told you how things work, and that even though he is partners with the seller's agent, he is representing the seller until you have an agreement.

The long answer is much more complicated, and has to be based on not knowing all the facts, so if we hit one or two wrong notes, we offer our apologies in advance.

From your letter, it appears that Matt acted appropriately because he properly disclosed his relationship with the seller and the seller's agent. It also appears that you were equally straight with him, but unfortunately, you misled Matt by keeping him involved when you used his services to submit your offers to the seller.

It's apparent from your letter that you and your hubby are highly suspicious of agents and see them as an impediment or high cost to making a deal. You also don't seem to have much respect for them or confidence in what they can do for you. Otherwise, why didn't you hire your own agent before you started looking at houses? You said it yourself -- you wanted to remain free agents, which means you wanted leverage more than representation.

You wanted to buy an agent's listing, use an agent to negotiate your offer, and then get a rebate on agent services you didn't contract for.

No wonder this deal went over a cliff.

Matt may be partners with the seller's agent but that doesn't mean he automatically gets paid. He has his own business to conduct. He doesn't have an agreement with the seller, his partner does, so to get paid, he has to bring a buyer to the table, which he did -- you. And now you want to cut him out of the deal so you can get part of the buyer's side commission.

Nice try, but that's not how it works, and here's why. The listing agent negotiates with the seller to market the house and included in those negotiations is a commission paid on the back end when the house sells. The listing agent agrees to incur the marketing costs, including MLS listings, online listings, and open houses. The house is put into the MLS with an offer of compensation by the listing agent to other "cooperating" agents, which would include Matt. So to make it absolutely clear, it is the listing agent that shares the commission with other agents.

The reason Matt and his team "threw a fit" is because of two things: they already did all the work associated with bringing a buyer to the seller, which is what they are contracted to do. Second, you tried to interfere with a contract -- the one between the seller and their agent. You thought because you were unrepresented by a buyer's agent and didn't have a contract of your own that you had the right to negotiate the listing agent's commission and how it is distributed.

You don't have that right! You also responded to the listing agent's marketing. You seem to think you deserve some sort of discount because you found the house online and attended an open house when that is what listing agents routinely do to attract buyers. Online advertising isn't free. That's why listing agents are willing to pay other agents to bring buyers but only in the case of not finding a buyer themselves.

Are you surprised by that? Of course the listing agent wants the full commission -- they are spending their marketing dollars, their time, and their energy to bring a buyer to the seller. If you don't buy, there is not only no sale, there is an opportunity cost involved that is incalculable because they can't get that wasted time and money back ever again.

You had a written offer and were negotiating on the phone to finalize the deal. Did you think Matt was helping you out of the goodness of his heart? He thought you were making a deal.

It's clear you weren't really looking for representation, or you wouldn't have done your own negotiations. You didn't get the answer on the commissionectomy you wanted from Matt, so you went out and found another agent. Of course your agent was willing to cut commissions -- they didn't do any work except to submit an offer you had already worked out with good ol' Matt!

So you can fully understand, let's put the same deal in another container and see if it holds water.

You go to Neiman-Marcus to buy a dress, take it back the next day and tell the salesperson you'll keep the dress if she'll discount the dress and then cut her commission. Do you see yourself getting away with that?

So, to answer your question, Matt is not your agent, but that doesn't mean he didn't bring any value to the transaction. He did -- to the seller. He made it clear to you that he wasn't your agent, and you made it just as clear you didn't want him. You had an opportunity before you submitted your first offer to go with another agent. You didn't. You wanted the house, so you made the deal you wanted using his services, but then you thought you could outsmart the professionals, went back for more of a discount, and it backfired on you.

So there you are with no house, no deal, and three upset agents, and possibly a seller who no longer wants to mess around with you. Was it worth it to represent yourself?

Only you can decide if you really want this house, and if you are willing to eat a little crow to get it. That means coming clean with Matt since he submitted the first written offer for you. If you signed a buyer's agreement with the other agent, then let the other agent negotiate with Matt and the listing agent. There may be a way to work things out so everyone is happy.

If not, your offer is dead anyway.

Live and learn, and move forward. Hire a Realtor of your choice and start shopping for another house that you can truly afford without getting underhanded. Let them do the work and earn their keep. Frankly, I would be highly suspicious of an agent who would be willing to participate in what you tried to do to Matt and the seller's agent. You can even hire Matt to represent you on other houses if you wish.

In fact, having a good relationship with an agent can be very beneficial. A good salesperson will work harder for a good customer. Imagine yourself at Neiman's again. You want that dress but don't want to pay full price. Wouldn't it be nice if the salesperson held your size for you when it goes on sale? Or calls you when other dresses come in that you might like? It's about relationships - and that comes from respect and appreciation. Wouldn't it be nice to have a real estate agent looking out for your best interests?

It's well worth the cost of the commission.

To see Georgia licensing laws, go to ARELLO.org.

Published: August 24, 2005

Use of this article without permission is a violation of federal copyright laws.

Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.