Georgia Realtors - Exclusive Buyer Brokerage Agreement

Rental Property Investor · Collingswood, NJ · Member since 2013 · 171 posts · 61 votes

I recently started to look at properties in the Atlanta area, where I intend to do multiple purchases within the next year. I do not live there nor am I from there, so I had a buyer's realtor, whom I recently met, take an afternoon and show me around. This realtor was very helpful, but when I went to make my first offer, it was requested that I sign an Exclusive Buyer Brokerage Agreement. It would go for four months and cover all properties, including off market deals. I invest heavily in the Tampa area and my buyer's realtor there has never even asked me to sign such a document. Is this practice more common, even for investors, in the Atlanta area? If not, is there another document that I should request be used to demonstrate our relationship?

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Joel OwensBusiness Member

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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

10y

If you are not buying until within the next year then I do not know why this agent is showing you properties.

That is nothing more than a site seeing tour and all the properties you look at if worth anything will be gone by then.

Seems like just meeting up with a local investor and going to lunch and driving around for initial area review would make more sense.

When an investor says they are thinking of doing something next year so many things can happen between now and then that it becomes a probable long shot based on time alone. Life happens and that tends to alter the plans for people and direction they are going.

If you mean between now and end of this year every couple of months you will keep buying properties than that is different.

The agreement itself isn't bad. The 4 month thing on any properties sounds a bit much. Usually with a buyer brokerage agreement you get them to sign a 2 week first to see if you work well together. Any properties shown the protection goes out for months. If after the 2 week period you both really are working well together then look at a longer term sign on period.

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Chris Daetwyler
Dallas, GA · Member since 2016 · 6 posts · 0 votes
10y
My wife is a real estate agent in the Atlanta area. This is common. The primary purpose is to protect the agent from investing time with a buyer only to be cut out at the end so that the buyer can save money by negotiating that agents commission into the deal to reduce cost. Most will have some language in it that says you can leave at any time. But homes they have shown you first they have (insert some fancy term for first dibs in being your representative in buying the home with you).
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Rick C.
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Rental Property Investor · Collingswood, NJ · Member since 2013 · 171 posts · 61 votes
10y
Thanks @Chris Daetwyler. How long is normally her Protected Period? Also, does she ask for a minimum commission?
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Chris Daetwyler
Dallas, GA · Member since 2016 · 6 posts · 0 votes
10y
I'm not sure about her normal protected period, usually once you build a relationship with an agent things become much more informal and if buyers want to split ways she doesn't make a fuss about it. I do think she will have a buyer sign one if they seem shifty and like they are just trying to use her. But this just depends on the agent and most have been burned by investors. You have to remember each offer takes about 20-30 minutes to right up just to be rejected for being to low. So it can seem a burden for a lot of agents. As far as commission goes 6% split by selling and buyers agent is standard here in Atlanta. Though some mega teams may ask for an extra 1%.
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Phil Earley
Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
10y
The exclusive agreement legally protects all parties and gives the Realtor the authority to represent you as a client. If there is no client relationship, the realtor is technically the agent of the seller and should only be doing administrative acts on your behalf. There is also a non-exclusive buyer agreement and an agreement to work with buyer as customer only. All three are agency disclosure for both parties so that there is no misunderstanding of the relationship.
Whatever the agency is, it needs to be papered in the file for the Georgia Real Estate Commission.
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Rick C.
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Rental Property Investor · Collingswood, NJ · Member since 2013 · 171 posts · 61 votes
10y
@Phil Earley - Thanks so much for the color. These are the terms I was given:
3% of sale price - buyer to reimburse the difference if less
$1500 minimum commission guarantee - buyer to reimburse the difference if less
$189 flat portion - buyer to pay regardless
Protection Period - 90 days
Do you think these terms are appropriate?
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David Hines
Property Manager · Allen, TX · Member since 2015 · 190 posts · 160 votes
10y
The 90 day protection period is completely standard and just refers to the properties the agent has brought to your attention. The 4 month period on the agreement is really the objectionable part. This agent is trying to lock you in as a client. If this is not what you want, tell the agent to make the agreement for a shorter period of time or specific to the property you are making the offer on.
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Phil Earley
Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
10y
@Rick C. those sound reasonable if the agent is bird dogging for me.
My take is if an agent works for 3 months on a deal and gets it to the closing table, they need to compensated well so that they know I'll take care of them when another one crosses their desk.
....we don't sell real estate so I have no skin in the game. We are here if you need management though:)
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Louise Courville
Atlanta, GA · Member since 2015 · 25 posts · 12 votes
10y
All those terms are negotiable. Quite frankly they must have been taken or someone - probably their broker has this agreement for investors as their time can be taken for granted.
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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
10y
If you are not buying until within the next year then I do not know why this agent is showing you properties.
That is nothing more than a site seeing tour and all the properties you look at if worth anything will be gone by then.
Seems like just meeting up with a local investor and going to lunch and driving around for initial area review would make more sense.
When an investor says they are thinking of doing something next year so many things can happen between now and then that it becomes a probable long shot based on time alone. Life happens and that tends to alter the plans for people and direction they are going.
If you mean between now and end of this year every couple of months you will keep buying properties than that is different.
The agreement itself isn't bad. The 4 month thing on any properties sounds a bit much. Usually with a buyer brokerage agreement you get them to sign a 2 week first to see if you work well together. Any properties shown the protection goes out for months. If after the 2 week period you both really are working well together then look at a longer term sign on period.
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Rick C.
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Rental Property Investor · Collingswood, NJ · Member since 2013 · 171 posts · 61 votes
10y
@Joel Owens - Thanks for the color. To clarify, I intend to buy multiple properties over the next year. I have already put an offer in on my first Atlanta area property, and I am looking to submit additional offers in the coming days. Apologies if that was not made clear.
Agreed that the four month clause is a bit much. There is termination clause though that I can use at any point in that timeframe, which would leave me with similar rights (i.e. can work with another agent, but properties shown by first agent are covered by the protection period) had I only signed for a two week period and did not renew.
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