Even if there is no retaining fee, you are restricted from working with multiple agents. Is this the norm. I have been in communication with several agents and of my top 2, one requires a retainer. I do not know if I want to make that commitment so soon.
Hey @Jezelle John ! Not sure what the norm is for your area, but I'd hope you'd at least get any retainer fee credited back upon successful closing. My preferred route is to go with the traditional success fee / commission at closing. Especially if you are on the buy side, the seller pays the buyer's agent commission so there would be no out of pocket cost to you. Likely will end up being a matter of your preference, but I believe the majority of agents out there stick to commission only. Best of luck!
@Luke Trovinger thanks for your response. How it was explained to me was that there is no retainer fee, but I am still restricted from buying from other agents. The agent will get a commission when the deal is completed. I am very new to investing, but I like the freedom of having several agents looking for properties for me as a buyer. I have noticed that although agents have access to the MLS, I'm often sent different properties in the same city. I understand that people
should be compensated for their work. I just want to know is being limited to one agent the norm via signing a retainer agreement?
@Jezelle John My area is very rural so I work with 1 agent for my entire region, about a 30 mile radius. Obviously this would not work in a more urban environment. My agent not only sends me the first MLS listings but also has feelers out to other agents for the types of property I am looking for.
I think it can come down to your location and what the customs are locally.
Thank you. Yes the markets I’m researching are more city areas. Its very competitive.
In Virginia, we call it Buyer Agency Agreement. Realtors require this agreement to establish the relationship between agent and client. If you are not happy with the agent, you can simply send an email to the agent ending the agent-client relationship. As realtors, we spend gas, money and time working and educating each client. Personally, I wouldn't work with a client that is communicating with several agents.
@Jezelle John This is a case where it pays to look at both sides of the relationship.
You as the buyer want the freedom to work with whomever you wish. I as the Realtor (I used to be one, but not anymore) invest time, gas and opportunity cost (I can't work with other buyers while I'm tied up with you) and get paid nothing until we close. If you buy through another Realtor, I get paid nothing, regardless of how much time I've invested in finding you the right property.
Can you see the rub?
A reasonable solution is to sign the Buyer's Broker Agreement. If you decide to work with another agent in the geography covered by that agreement, you need to tell the agent 2 that you are under contract with agent 1. If agent 2 finds you a deal, agent 1 will pay agent 2 a referral fee. Agent 2 will probably refuse to work with you under those terms, but you can't have your cake and eat it too.
When I was selling real estate, I decided to work with rehabbers. The result was that I spent an incredible amount of time walking through abandoned foreclosures that were covered in mold, littered with dead vermin and were dirt cheap. All that was in hope of getting the listing when the rehab was done.
Fun fact - in the winter, abandoned homes are a lot colder inside than the outside. Don't ask me how I know that.
It was one of the biggest mistakes I made in my real estate career. Each rehabber had to see the dilapidated property RIGHT NOW, and then follow up with multiple visits with their contractors. The result was that I put in FAR more time, gas, opportunity cost and effort with investors than I would with an average home buyer. I ended up really damaging my own income with that decision.
Truth be told, every agent has the same access to MLS. Every agent can set you up with an email alert for new listings. The difference is in how much time an agent spends looking through MLS for properties for you, vs you looking on your own. The other difference is the (almost) mythical "off market" listing. NAR rules now prohibit Realtors from keeping "pocket listings" for more than 24 hours. They require that absent specific instructions from the seller, properties must be listed on MLS within 24 hours.
In other words, if you have a Realtor who is full time and has more than a few years in the business, there's not a dime's worth of difference between them, aside of your level of comfort with the individual.
Hopefully that gives you an idea of the view from the Realtor's side of the world and will help you to better manage the relationship.
In PA (NEPA) I also rely heavily on buyer agency agreements. It is a consideration to work with only 1 agent. I can still see why someone would want to work with multiple agencies. But the key is: to be upfront with both (or more) agents, so they can make an informed decision on continuing to work with a buyer. It's being respectful of someone's time, energy, gas expenses, and knowledge. A retainer is an interesting idea, but not a common practice for our area.