Did you have to sign an agreement with your Realtor in 2023??
Hello BP,
I'm a new investor in Broward county, Florida which is where I live. I'm starting to work with a local realtor and after a few days, I received these documents to sign as part of the "onboarding" process. I'm a little concerned about this and I would like to hear if you had a similar experience with your local agent. Are those fees for real? I know the American Home Shield is optional, but the last image is not and is the one I'm most concerned about.
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Hey @Jorge Armas,
Yes, that sounds about right. It's possible that the commission rates could vary depending on the realtor and brokerage. In my experience, I've seen commissions ranging from 4.5% to 7%
3 of the 4 screen caps you posted are for a Home Warranty?
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@Jorge Armas I personally wouldn't agree to any of that. I've been an investor for 15 years and agent for over 7years here in Broward County and I have never had my clients nor would I as an investor sign an agreement like that. Basically it says you will pay them a commission regardless of whether they find you a property or not and for 6 months after the agreement. The $345 is also a junk fee. Just my 2 cents.
Quote from @David Ramirez:This is a buyer's agreement not a listing agreement.
Hey @Jorge Armas,
Yes, that sounds about right. It's possible that the commission rates could vary depending on the realtor and brokerage. In my experience, I've seen commissions ranging from 4.5% to 7%
The contract i am assuming is the "buyer's agent agreement". They just want to make sure that you are 100% loyal to them, but I wouldn't sign it until I find a property and ready to make an offer @Carlos Valencia @Albert Bui
Quote from @Matthew Kwan:
The contract i am assuming is the "buyer's agent agreement". They just want to make sure that you are 100% loyal to them, but I wouldn't sign it until I find a property and ready to make an offer @Carlos Valencia @Albert Bui
I can understand being loyal but an agent has to prove "procurring cause". If @Jorge Armas decides to buy a property from another investor, a friend, or relative this agreement states that he will have to pay the agent a full commission. If the agreement ends and he buys a property within 180 days after, he has to pay a full commission to the agent who had nothing to do with the deal.
#1 Wholesaling Contributor
- Wholesaler
- Tampa, FL
Quote from @Adam Schooley:
Quote from @David Ramirez:This is a buyer's agreement not a listing agreement.
Hey @Jorge Armas,
Yes, that sounds about right. It's possible that the commission rates could vary depending on the realtor and brokerage. In my experience, I've seen commissions ranging from 4.5% to 7%
My apologies, I think I got a little mixed up when I only looked at the percentage. I agree with you I would never sign a buyer's agent agreement with those terms
(iii) is particularly brutal. Unless I'm reading it wrong, it's saying if you have to back out of a contract, not only will you lose your deposit to the seller, but you'll owe this brokerage the commission they would have been paid. How's that for fiduciary responsibility...
You could sign this OR find an agent who works hard enough that they're confident they'll find you a house, and won't need an agreement like this.
Don't do it bro. Just don't do it...
In my state we have to have a signed buyers agreement once we go under contract. I do it per property and when we offer on a deal. That verbiage is typical in the agreements. Also the agent didn't draw up that language is most likely what the local realtor board has and that's what all the realtors use.
Hello guys, thank you so much for all the answers. I strongly agree with @Adam Schooley. But I wanted to confirm with you first since I don't have much experience yet.
I don't think I will work with this agent with those terms. Thank you one more time for your support!
So I am a real estate broker and I typically don't use buyer brokerage agreement, although, I do see why people use them - Although it could get sticky with providing procuring cause, etc. The part that I see the problem with on this particular one is that it says you would owe them the full 6 percent (I could see the one buyer side of 2.5 to 3) but for them to get both sides guaranteed by you is absurd. So the short answer is - Signing one isn't bad, as it assures your agent will be dedicated to working with you, and you working with them, but THIS PARTICULAR ONE isn't good lol.
Hi @Jorge Armas, What's your gut feeling with this agent?
Did they take the time to explain the agreement and how they get paid??
If you have any doubt, interview a couple more agents.
I work in Miami and I have all my clients sign an exclusive buyer broker agreement when they hire me. The first thing I talk about in our onboarding meeting is Laws, Agency Agreements and how I get paid. Most agents dont take the time to explain how they get paid and most customers don't know how their agent gets paid.
6% is very high... my fee for buyer representation is 3% and normally the seller pays my fee, HOWEVER there may be a situation where compensation is not being offered (Like a For Sale By Owner) or a situation where compensation is less than my fee (seller is offering 1%) and I explain that I will always let my client know before showing them a property and they will need to decide if they still want to see it.
Agreed with @Adam Schooley the $345 junk fee is a flat fee commission. Every single broker I've worked a deal with charges some kind of flat fee. It does not go to the agent it goes straight to the Broker.
@Jorge Armas Hi Jorge, I work exclusively with one buyer broker and we have an understanding that I will pay 3% on whatever properties I buy through him even if the listing agent is only offering 2%, I make up the extra 1% of the commission at closing. He would never weasel me out of fees or try to rope me into a 180 day clause.
Thank you @Joe Biscaha , @Dwayne Byrd, and @Alecia Loveless for your comments.
#2 General Landlording & Rental Properties Contributor
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#2 General Landlording & Rental Properties Contributor
- Real Estate Consultant
- Cleveland
I never use a realtor , all my deals are off market. Now if you are using a loan well then I guess you do not have a choice. I suggest getting funding in place, then get them all off market. Realtors for the most part do nothing but cost both sides money. Before anyone says anything I have done about 500 deals in my market so I do know a thing or two
Good luck
I find these kinds of agreements particularly outrageous, especially when it comes to real estate transactions. Real estate brokers should be incentivized to get the best deals for their clients, not collect a commission regardless of performance. Paying a junk fee on top of that is simply unacceptable. You shouldn't have to pay money just for them to show you properties - there should be no cost associated with that unless they actually broker the deal. It's important that investors are aware of this kind of agreement and protect themselves against it in any way possible. Real estate investments can make or break a person's financial future and exploiting someone like this isn't acceptable. In my experience as an investor and agent in Broward County, I have never encountered an agreement like this and would strongly advise against signing one. Don't let yourself be taken advantage of! Protect your investments, protect your assets and don't settle for anything less than the best.
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Real Estate Agent Texas (#005416)
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I completely understand an agent wanting an agreement signed before showing property/working with you.
Personally, I will not show someone properties unless I can vet their qualifications and ambitions in terms of ability to purchase and intention to purchase. Meaning if someone can't qualify, or "just browsing" I'm not going to spend my time and expertise working with them.
I'm not one to force an agreement down someone's throat like some agents do. I spent a full day on several occasions with my California investors showing them properties with no agreement in place. I see that as part of the business in some cases.
In terms of this specific agreement, the way I understand it....there's no way I would agree to it personally, and no way I would ask a client to sign it.
My understanding is once you sign that agreement, no matter what or where you find a property you have to pay the brokerage....and 6% none the less!!!
In all these sections of my representation agreements, I set them to $0 or 0%. If my client finds an off market property that I didn't bring to them and is a direct to seller transaction, I don't expect to get paid.
Just the way I do business. Not saying I'm right or wrong. Every other person alive is a RE agent, so if you're not happy with one then make some more calls.
Quote from @Alecia Loveless:
@Jorge Armas Hi Jorge, I work exclusively with one buyer broker and we have an understanding that I will pay 3% on whatever properties I buy through him even if the listing agent is only offering 2%, I make up the extra 1% of the commission at closing. He would never weasel me out of fees or try to rope me into a 180 day clause.
Thanks for sharing, It sounds like you are working with a professional agent @Alecia Loveless
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@Jorge Armas I think you are already seeing the gambit of proposals and negotiations JUST FROM posting the screenshot on BP. The facts are very simple:
-Some agents will say and do anything to "earn" your business/trust
-At the end of the day, the SELLER should be paying 100% of the costs associated with the purchase on residential property.
-You aren't required to sign a home warranty agreement
-You aren't required to sign a BUYER agreement
-Remember who the real estate broker works for...YOU!
-Even if a seller is paying the cost, you still end up covering it when you buy the property...SO - interview the agent, make sure you like the way they speak and act. Make sure they know their stuff. Depending on the type of asset you want to find, maybe I am the right choice, or maybe Adam or Jay or someone else is a better fit for you.
A real estate agent has a fiduciary duty to protect you with real estate. Your lender has a duty regarding the financing. Attorney for title/protections, etc.
All my team and I ask of our buyer clients is to understand we can only take a limited number of buyers at a time and that we Value our weekends and afternoons as much as any other person, therefore if we find you a deal, we would expect a fair compensation for the value we provide.
Ive have been a Realtor In West Palm Beach since 2005 and I have never ever had my clients sign anything like that! When you have been working with investors long enough and show them exactly what they are looking for you know when people are real or not. Just my opinion! Also I dont have enough time in my day to keep checking the property appraiser to see if they went behind my back. It happens every day its the cost of doing business.