A little new to this so sorry if these questions don't make sense or if I don't use the right terms.
My "Buyer's Agent", who I like very much, sent me an agreement to review & sign. Reading it closely it appears that is more an agreement with the agent's broker and not as much the agent (I assume this is normal but don't really know)...
For reference, the agreement is titled "Residential Buyer/Tenant Representation Agreement" apparently created by the "Texas Association of Realters" and has Form ID: (TAR-1501) 4-14-06.
I had a few questions around what is normal/customary:
Section 8 Intermediary choosing between 8A (Intermediary Status) or 8B (No Intermediary Status):
They already checked 8A before sending me the form. We have already seen all available property listings and at this point none of them are from this Broker. I don't really feel comfortable with Intermediary status in general and certainly don't think it is needed. Is it more normal for Buyer's agreements to be "Intermediary" or "Not Intermediary" or are both about equally done? Is there any reason why I shouldn't tell them that I want 8B checked instead (No Intermediary Status)?
11 Broker's fees: (11.A - Commission): I think there is a typo saying 66.000% and believe they meant to put 6.000% of gross Sales price. I am confused as I understood it to be 3%. Is 6% typical on the buyer's agreement or is 3%? Is this 6% because they choose 8A for me and/or would it 3% for 8B? Bottom line is that I am not comfortable with 6% because I believe it basically says I am liable for this if the seller, &/or Seller's Agent, &/or Seller's Broker doesn't pay the 6% or 3%.
As a point of reference for both of the above question areas, in my inexperience I frankly may have muddied the 'Procuring Cause' waters with 2 of the potential properties as I went to see them without an buyer's agent with me and the seller's agents may try to claim "Procuring Cause" because they told me about the individual property. This is a real concern since one of the seller's agents, when I tried to introduce my agent to him, already tried to force me to use him as a broker & that he would assign me a buyer's agent (or reassign someone else as the seller's agent). I politely told him he was never hired and I frankly didn't agree with anything he said and that he has a clear conflict of interest. If either of those 2 ends up being the property we buy I think we will likely, in the end, be OK on all grounds (both abandonment & estrangement with Seller's agents who told me about the respective property before I found my agent, the fact that neither seller's agents were actually present when I visited the properties (neither actually showed me their property), I have a witness that can attest that I asked/confirmed they were the seller's agent & that I said that I explicitly did not want them to be my buyer's agent due to their conflict of interest & that I was looking for a buyer's agent separately, the only written agreements will be with my agent, all due diligence (comps, research, site visits, etc) have been done with this agent, and the actual offer/procurement will be from/through this agent). All that being said I realize that, even with all my ducks in a row, things could go against me and am prepared for 3% but certainly not 6%.
Section 11.F Broker's Fees in addition to commission:
- Service Providers: Basically sounds like they are reserving the right for referral fees from the service providers...
- Construction: is left blank...
- Other: is left blank...
Is leaving them both blank typical or do people typically put 0% & none?
"Section 7.D: Representations: Name any employer, relocation company, or any other entity that will provide benefits to Client when acquiring property in the market area:...".
Not sure what section 7.D means... Am I supposed to list any potential service provider up front? I have no idea yet who in that area I will trust to do the additional services that need to be done to actually close the deal (survey, inspection(s), structural engineer(s), repair/improvement contractor(s), title, lawyers, etc)...
Lastly, I am going to try to shoot this document to a real estate attourney as well (if he says this is something he does or a regular attorney if he does not) but I figured some of the folk on this forum could at least tell me what is typical/normal as the lawyer may only be able to tell me what is legal....
Your specific questions are best addressed by someone very informed on Texas Real Estate Law, and the disclosures that RE Agents are bound by, which I am not. But, I think in general, some things can be said about these "Exclusive Buyer Representation Agreements."
They are not manditory. It is, IMHO, an insurance policy by your "Buyers Agent" that they will get paid if you buy a property. When someone says "it's customary" should be a clear signal that it's "not manditory." In some cases, it can provide them even more than they would get from the selling broker. In the case of 66%, a lot more, cause you might be held responsible for the difference!
Since it is only an agreement between you and your agent's broker, and has nothing to do with the seller, the commission the seller has agreed to pay, or anything at all with an actual purchase, the lack of a buyers agreement should not make any difference in actual purchase of a property. When the offer is made, there should be something else that specifies the role your agent will perform, commission they will accept, etc.
Don't worry about procuring cause, either. Just be honest about the houses you've seen, and with who you saw them with. I think technically they would be excluded properties on that Buyers Agency Agreement. Just be honest. Procuring cause is a Realtor thing, and if arguments arise, it's a squabble between Realtors.
I have never signed a buyers agreement, and when asked, have just politely said no.
Just one other thing. If your agent is sloppy enough to put down 66% and not catch it, send you a contract that you do not fully understand, and expect you to sign it, no matter how much you like her......
Can you tell I'm not a fan? But, who knows about Texas?
Just my 2c.
Yeah, when I first read the original post, I thought it sounded like what Ralph is saying - but again, I'm not familiar with what is done in Texas. I feel same as Ralph on this; see the following threads:
Here you will find more people questioning these exclusive agreements:
Updated almost 11 years ago
Another link on this topic: http://www.biggerpockets.com/forums/48/topics/13962-making-offers-on-mls-properties