I saw a post on Reddit asking this question but I never expect good answers there.
The main answer (so far) seems to be to avoid racial discrimination. Ok…maybe but I’m dubious.
Anecdotally, every time I have purchased a property, I never, ever met the previous owners. Not even close. The process was scrupulous at making sure we never met.
Why?
If the buyer doesn’t like the seller, or the seller doesn’t like the buyer, the sale might not happen. Then the real estate agents wouldn’t get their commissions.
A whole lot of really trivial things might kill the deal at the last minute. So the agents try to minimize the probability of a last-minute glitch.
We met the seller in the attorney’s office at closing, 16 years ago.
Meeting before the deal is done is going to wreck the dynamics of the agent to purchaser relationship. Even without any reason for bias or tension it cuts across the lines of communication and reduces the agent’s ability to negotiate. It makes it hard for the agent to operate in the seller’s best interests.
It also opens the door to a private deal that cuts the agent out of the loop. Contracts with agents usually have clauses to ensure the agent gets their cut no matter what, but they are time limited and not impossible to circumvent.
I met the previous owner of my house later professionally and we have since co-authored papers, which just goes to show how small the world is.
I really wish I got to speak with the previous owners to learn about the unusual/special bits about the property. Things no one would discern on a 60 minute walkthrough.
I met the owners of many of the places I was looking at before purchase, and I looked at a lot of places. The owner of the place I eventually bought introduced me around the neighborhood before the sale was final. I know other cases of sales in which buyers and sellers met before purchase.
I think some realtors don’t want sellers there when the realtors are showing a house because they’re afraid the sellers will say or do something that’ll muck up the sale.
I’m pretty sure the sellers’ contracts with the realtors said that if the house sold by other means while the realtor had the listing, the realtor still got their cut. So the realtors didn’t need to worry about that.
Simple. The full deal goes thorugh the realtors. that way, if there is any dispute over what was said about the property, it falls on the realtors.
“Did you tell them you knew…”
-there was asbestos.
-the basement floods.
-the foundation has cracks.
-it was a Pot grow-op house.
-yes, you can have the appliances with the house.
A professional realtor will have a list of these sorts of details that are mandatory disclosure. they will cover these with the seller, and where the law requires or the other party asks, will tell the buyer’s agent.
When the buyer and seller meet, there’s the risk the seller may - on purpose or accidentally - misrepresent the situation of the property. These sort of misunderstandings can result in serious lawsuits. Simpler if all communication goes through professional realtors who have a long-term interest and the knowledge to do things right, legal, and above board.
Of course, as mentioned it avoids things like racial discrimination, and any side deals that may hurt the realtors’ commissions…
And if the seller does not disclose some items (i.e. the pot house history) to his own agent, the agent will have a record of that which will come out in any lawsuit. It will not degenerate into an I-said-you-said lawsuit.
Usually not, but when we bought a house in NJ, in the same town we were renting in, the son of the seller was in my daughter’s class. We had a month to month lease, and they were building a house that was delayed so we agreed on renting to them but not officially renting. The lawyers worked out the details so everyone was protected.
It went great.
Hard to avoid someone when you go to the same pool.
It’s not true to say that they never meet. Sometimes they do, but it’s not necessary that they should, and it’s generally considered that a meeting is best avoided.
Both parties are represented agents, which makes an in-person meeting unnecessary; they can communicate through their agents. And it’s generally wise that all communication should be through the agents; having parallel channels of communication open increases the risk of complications if, e.g. different messages are given through different channels, or the same message is differently expressed, given rise to confusion or misunderstanding. And it creates opportunities for a party that is dissatisfied with what it has heard through one channel to revisit the issue by raising it through the other channel (often without mentioning, or only partly mentioning, what they have heard through the first channel). None of this will make conveyancing simpler or cheaper.
I think that here in the UK, it’s normal for buyers and sellers to meet. Sellers frequently show prospective buyers around the house and the agent really only introduces them.
As far as disclosure goes, the law requires a seller to disclose all that stuff - even disputes with neighbours. The buyer should arrange an inspection that would disclose structural problems, and the solicitors are required to do the necessary ‘searches’ to ensure that the seller actually has title and that there is no proposal to build a bypass through the back garden.
Of course, there are many variations: Auctions are a fast and easy (but expensive) way to sell a house and buyers and sellers would not meet. Of course, if the seller is a finance company, the previous owners will no still be around.
I think we met in both of our purchases and one sale.
Oddly enough, the seller of our first home was a teacher who ended up teaching my sister in law a few years later and their daughter (who was about 10 when we bought the house) met my niece in university and is now one of her closest friends.
Yes, here in the UK I both met a seller when I bought and a buyer when I sold.
The first time was simply because the seller was in when the agent showed me around.
The second time was quite interesting.
I was selling on behalf of my sister and I (after we were left the house in a will.)
The buyer wanted to move closer to his children - and he knew me already.
So he asked that I temporarily took the property off the market … and I asked that he didn’t look ay any other houses.
We shook hands … and soon after the sale went through without a hitch!
The point is that if all communication goes through the agents, it avoids a dispute which boils down to I-said-they-said. The agent has a reputation to defend, appropriate training, much of the detail in writing, and once the sale is done - no financial stake in the outcome of any dispute so no motivation to misrepresent what was said.
I imagine this goes double in the wonderful world of USA litigation. Things are far more likely to end in court when significant repair bills pop up. Formalizing all communication is a protection for everyone.
Obviously, it’s a small world after all, and people will meet. I bought my first house from my friend’s parents (they were retiring and leaving town) and had no agent. But then, I’d been in the house several times over several years and had not heard of problems.
Right, and the conflict of interest is that it’s not only the seller’s agent who has an interest in getting the highest price on the sale, it’s in the best interest of the buyer’s agent as well.
If the owner and buyer meet and work out a deal themselves, the buyer and seller may end up coming out better, but the real estate agents get less commission.
The last time I sold a property the only two people involved at all were the seller and the buyer. The closing was pretty simple. I said, “Here’s the deed.” and he said, Here’s the check."
100% this. Every time I’ve sold a house the contract I signed with the realtor required us to be out of the house for any showings. They usually had amusing horror stories of sales that the sellers screwed up by their inability to keep their mouths shut. The only time I’ve ever met the other party on a sale was at the closing.
IME, if the seller is living in the house at the time it’s being offered for sale then it’s very common to meet them when looking at the house (though they may happen to be out of the house at the time too).
When I bought (the lot on which I built) my house, I did not use a lawyer and the sellers’ lawyer did the paperwork (I separately hired a title agency). The closing was at the sellers’ lawyer’s law firm, and we had the sellers, their lawyer, and me, sitting around the table.
Once in a while, one side or the other will realize/say … “Well … it seems that we’re just a commission apart,” and look to the agents to kick in a portion of their commission(s) in order to reach agreement.
I believe there have been cases where the potential buyer and the seller privately agree to deal outside of the arrangement with the agent - in which case the agent has done the work of advertising and managing appointments, but does not get the fee related to the actual sale.
But yeah, the agent can just say ‘I don’t know’* to a whole load of questions (like “have you ever argued with the neighbours about parking?” etc) where the occupants might blurt out too candid an answer
3 purchases here.
First (in NC): we bought directly from the builder, and so obviously we did meet the seller. When we sold it, we sold to a friend - so buyer/seller met in that case :D.
Second (in VA): the owner had actually moved out of town. We never met her. When we sold it, it was during a housing craze, and several potential purchasers actually included letters to us. Which weren’t a factor in our case; we went with the one that had the best escalation clause. We did meet the purchaser a time or two afterward.
Third (also in VA): I think the family was actually home when we viewed the place, though we didn’t really interact with them. Just as well - as the husband seemed (later) to be interested in nickel-and-diming us on all sorts of things they didn’t want to take with them, and the wife seemed kind of bitchy - at closing, she looked like we were being utterly, insanely unreasonable when we asked for a set of keys to the house (as they were renting back for a few days after closing).
All in all, I think the distance made the deals easier. Note that in all cases, these were newer homes, with pretty much zero “character” to have to discover about the places.
In one case, meeting the seller helped kill a deal: my husband (as a child) was brought along when the parents took a second look at a house they were considering. The elderly couple who owned the place wanted the DOG to convey - as they didn’t want to put Fido through the trauma of moving. The woman saw my husband (then 10 or 12) and cooed “Oh, you must be the nice young man who’s going to look after our Fido!”… not knowing that my husband was really, truly NOT a dog person. I think there were other issues with the place, but that one is what sticks most in his mind.