Would you ever sign an Exclusive Buyer Broker Agreement?

Question

Is there ever a situation as a flipper or buy and holder that you would ever agree to sign an Exclusive Buyer Broker Agreement?

I've been working with this agent for a couple of months now and he just brought up the Broker Agreement and wants me to sign it. The thing is I'm new to this business and so is he. He has been working his tail off to find me deals and even working to connect me with vendors, even though nothing he's brought to me has looked very good, he's still trying and tweaking.

I just feel like if I sign something like this with him, I would really be limiting myself and causing myself unneeded loss of income if I end up finding something on my own, ie Craigslist or yellow letter, and then have to still fork over a fee to him and his broker for doing absolutely nothing.

I don't want to lose the relationship as he's a good guy and he's trying, but if it came down to it, I think I would just have to walk away. Now I would be willing to sign some sort of other agreement that if he brought me a property I would use him to close on the deal and then when I'm ready to sell use him as the selling agent. I think that would be a fair trade-off, or would the broker not go for something like this?

Brett Synicky · Answer

@James Bynum

I will work with an investor without a buyer broker agreement until we put an offer together. Then I will ask them to sign one for that property.

For retail buyers, if they won't commit to me I cannot commit to them.

Charlie MacPherson · Answer

For our RETAIL clients, we do not show properties without a signed Buyer's Broker agreement that essentially says that if they buy a property (on or off MLS), they buy through us.  We also have a minimum commission.  We also require pre-approval before investing resources for them.

For my investor / flipper clients, I have a different agreement that limits their obligation only to those properties I introduce them to.  The agreement also states that if they resell the property within X months, they will list it through me at a Y% commission.

I don't think most investors would consider exclusivity until there's a long established relationship.

Zach Sikes · Answer

Great question. As the agent, we don't work with a buyer until we have a signed brokerage agreement. However, we make the deal only if our client buys off the MLS. If you find an off market deal, go for it. We'll list on the back side. We just don't want you calling every agent in town to look at houses.

Michell P. · Answer

@James Bynum

If he's a newer agent, he may be getting pressure from his office to give you this document, and maybe hasn't really considered what he's asking.  IMO it's unethical to ask for a fee if I didn't help close the property - but I've had other agents try to pressure me to use a buyer's agreement because they want to make it industry standard.

In my office, we've agreed that a fair buyer's agreement is one where you agree to pay me if I find you a property and you also have the right to let me know you're unhappy with our relationship and cancel the agreement at any time.  I wouldn't sign an agreement without that easy exit clause - and I only use the buyer's agreement when we put in an offer.

He's probably willing to rewrite the agreement, but just looking for assurances.

James Bynum · Answer

Yeah I fully understand that, you don't want to put in all that time and effort just for someone to go behind your back and work with someone else. But their agreement says that even if I find something myself off MLS that I would owe him a fee still even if he wasn't involved at all in the transaction.

Would you ever sign an Exclusive Buyer Broker Agreement?

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