What is signing a contract with a realtor about?
kinduvabrat asked:
I am looking to buy a home (my first). My sister just said something about “signing a contract with the realtor” however the realtor I’ve been in communication with hasn’t brought that up. Does one always sign a contract with a realtor? What does it cover? For whose benefit is this, mine or the realtor’s? Is this common practice?
I’d like to get some background information on it before discussing it with my realtor, if I can ascertain that this is a valid, common practice,
Why would he not have mentioned this contract to me before?
As a buyer, you may not even be asked to sign a contract, as you will not be the person paying the realtor in the first place. I can see no reason to sign an agreement with a buyers agent, unless you are demanding some specific performance (like getting them to waive their commission for a flat fee or something similar like that).
Depending on that state that you live in there are different practices on what type of contract you sign. The most common is an exclusive contract where the realtor has the only right to represent you. It protects both you and the realtor. For the realtor, it protects them in that when they show you a house you don’t run to another agent after they have done all the work. If the agent is a Realtor (realtor.com) then they have to obide by the oath they take when becoming a member. The contract is not required but again common practice will dictate what is done in your state. You can also check with non full service agents such as Assist-to-Sell or Help-U-Sell. Using them can save thousands on the commissions paid to realtors.
maybe he isn’t savvy enough to even have thought about a buyer broker agreement. if he seems a little careless, please (sorry, this is sexist, but it’s true for RESIDENCES) get a FEMALE who is very experienced, is NOT a billion a year salesperson (won’t have any time to counsel you properly), and who will explain to you this:
1. what is agency?
2. how does your agency to me affect me for my betterment?
3. what do you do if i want a house that you list yourself?
4. what is single agency and what is dual agency? and, what is a designated agent appointed for–why?
5. and MOST OF ALL: what things about me, my negotiating tactics, my plans, what i really will pay and why, will you, my AGENT and my buyer broker, discuss with either the seller or the seller’s agent? the answer had better be: nothing of the kind.
yes, it is common practice and to your best interests to sign an exclusive buyer broker agreement with a good, qualified, experienced, and CARING Realtor (r).
you do not have to pay anything for this contract. but you will be obligating yourself to only work with that agent unless a situation arises whereby you need a designated agent. it will probably be for 3 to 6 months. everything you need to know is already printed inside of the exclusive buyer broker agreement. ask questions about it. if your buyer broker really works hard for you, never forget to go back to that person when it is time to sell. it’s hard to find really conscienscious people in this biz and that’s why i so rarely manage an agent here in my own office. reputation comes first to me.
you should definitely do this. i write here, about real estate, a lot. i almost fall down in tears because SO MANY folks do not get a buyer broker! that is for your PROTECTION!!!
that is why you also get a real estate attorney when you sign a contract, not just submit an offer. you need to be PROTECTED.
you may have a specific question about buyer brokerage that no one can answer for you. you can call a real estate attorney that your buyer broker recommends you to, or else, if you have a specific question related to brokerage, write me at my email that’s here on my profile. GET YOURSELF A BUYER BROKER, P-L-E-A-S-E!
It is more and more common, but not at all typical for a buyer’s agent to have a buyer sign a “Buyer’s Broker Agreement”. The contract basically says that if you buy real estate in the next “X” months you agree to do it through thte agent so they can make a commission. Since you are committing to them then they will commit to you and spend hours and hours running around and showing you all kinds of property.
I have been working with buyers for over 10 years and have never asked someone to sign one. I think that it suits me better to develop a relationship with my clients. I have not had a problem with clients leaving me - but that may be an issue for other agents. Some agents use these agreements only for those clients they “get a feeling about” in order to avoid getting taken advantage of.
In most states, realtors are assumed to be working for the Seller.
The contract your sister mentioned is probably the “Buyer’s Agent” contract, which entitles them to get paid if you buy the house, and makes them your agent, not the Seller’s. Nothing wrong with that, it protects both of you.
Some states require this, some don’t recognize it.
There are two reasons they might not have mentioned it. One, even here where it is required, they don’t usually bring it up until they actually show you a house. Two, it may not be used in your state.
Always best to start with an attorney.
You are not required to sign a contract with a buyers agent.
If you plan to look for a house yourself and find one or you find a For Sale By Owner (FSBO) or a friend of yours, who happen to be an agent, find a house for you without the aid of your buyer’s agent you could be liable to pay him/her some type of fee.
If a regular transaction is done then the buyer’s agent is paid by the seller of the property. However, what happens if something happen out of the ordinary?
If you really want to use a real estate agent to represent you in some instances you might not want to sign a form agreement. Put something in the contract that says houses found as a result of myself without the aid of an agent I am not required to pay any fees.
I am a little perplexed by these buyer’s agents but they are a reality.
If your current agent you are working with haven’t brought the subject up why do it now?
I hope this has been of some use to you, good luck.
“FIGHT ON”
“For whose benefit is this, mine or the realtor’s?”
Signing a contract that restricts your options to choose who you work with is definitely NOT in your benefit. It protects the realtor from you leaving to find someone better/cheaper.