Signing an Exclusivity Agreement.

Bruce Lynn

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

4y

If you want them loyal to you, sign it. Too many people want our knowledge and time, but don't want to commit payment for that expertise. Having you sign the Buyer's Rep Agreement is how we trade.

4 Reply

Irene Nash

Realtor · Member since 2018 · 138 posts · 174 votes

4y

@Chance B. Speaking as an agent I'm going to voice an opinion that's unpopular (with agents), which is that if you are dealing with a competent agent who you enjoy working with this should be fine, but if you're not, the agreement ties you to someone who isn't great to work with.

I've seen my own family members, in other states where I was not licensed and just there for informal advice, sign these agreements two different times with absolute shmoes. So after 30 minutes of blibber blabber about real estate the client commits to 3 or 6 months with just this one agent, with no idea of what they're really like and little or no way to get out of the agreement. I realize this may not be the case with you and your agent, just saying it happens.

A little explanation about the terms:

The 'refuses or fails' is so the agent doesn't shafted if they work hard for you for months and then you buy a FSBO with no buyer agent commission offered.

The 'monitored without your consent' hopefully refers to homeowner initiated stuff like Ring doorbells, but if the language doesn't make that clear it's worth asking.

The 'protection period' is so that untrustworthy buyers don't get an agent to work hard for them for months, ditch the agreement or let it expire, then go on to buy a property the agent helped them find and/or investigate without the agent getting paid for their work. Usually it refers to a property you've seen with the agent, but I've seen them include any house in a specific county during the protection period, shown or not shown.

How long is the protection period? I think if it were me as the client I'd ask for a trial date range for the agreement, i.e. one week, and just explain to the agent that you want a chance to see how you work together.

A fair compromise, IMO, would be that you'd use the agent if you bought a home you saw with them, but the option would remain for you to leave with no strings attached at the end of the week. I would not sign an agreement that included homes the agent hadn't shown me in a county. (The whole point is to make sure the agent gets paid for work done, not work that wasn't done.) And I'd probably offer to pay them something for their time that first week if I decided to not sign on for longer, seeing as they did spend the time.

Good luck!

10 Reply

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thank you Russell, Bruce, and Irene. Bruce, from my understanding the contract is legally binding for me to be loyal to my agent only but not for my agent to be loyal to me they are feel free to work with other client where at I am only allowed to work with send agent. I am perfectly okay with that he seems to be doing an amazing job.

Irene, I have only a 10-day window in which I will be in town and have the ability to see and put offers in on a house, that will be mid-october. The contract goes until end of February with the protection perm lasting in additional 30 days. There are many other agents in that company, but I could not find any reviews or previous sales from this specific agent

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

4y

@Chance B. these types of agreements are common if a real estate agent is going to spend a bunch of time with you, they want to get paid if you buy a house. Real estate agents mostly work on commission, so they want to know you are committed to them before they spend time with you.

The other option is you can call all the listing agents and setup appointments to meet them at the properties. Then you can make "unrepresented" offers on the property. Odds are good the listing agent will just collect the buyers and sellers commission in that situation, so all you have done is given up representation and not saved money.

As far as the comment about recording cameras, it is very common for sellers to place hidden cameras in their properties. They do this to protect property and to hear what you are saying about the property. That is why it is a good idea to never discuss the property when you are at the property.

My realtor has me sign this disclosure at closing, but we have trust built up. You could ask the agent to reduce the time frame on the agreement, so you can "try them out". Let them know you are loyal and would be happy to extend later assuming it is a good fit for both of you.

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thank you Joe, I think I would feel slimy working with multiple agents like that without telling them ahead of time. I was aware about the people having cameras 2 get an idea of what potential buyers think of a property, it just didn't click in my head. Unfortunately I will not have the luxury trying out different agents. My best bet is to stick with one agent as long as they are competent.

Irene Nash

Realtor · Member since 2018 · 138 posts · 174 votes

4y

@Chance B. If the agent appears to be doing an amazing job, as you said, that is a huge plus. Agency agreements work fine when the agent is good, and are often necessary because some buyers just aren't up front people (although obviously read all the fine print and know what you're signing up for).

Life is much easier with a good buyer's agent, and even as a longtime agent myself I would want one if I were looking for a home out of state or in an area with logistics I'm not accustomed to (irrigation, water rights, etc.).

That being said, a lot of buyer agents are frankly not as good as they should be, in my opinion. If you have the chance to do a preliminary consultation with this person, you could ask them to give you an overview of the home buying process in that area, local issues, what the current market is doing, a skim over what the contract looks like, etc. You'll get an idea of how much they know and if they're a good match. I do this with every client regardless, it should be an informative session and not a sales spiel.

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thanks for the tip, yes he did say that he liked to sit down with his client for a face-to-face before getting into things, but it is difficult since I am out of town. I am hoping we can come to an agreement about term of length for the contract. Which he said we can discuss when I get to town. Since I am so new everything has me worried that I am making a mistake, but I am now more confident that I have the ability to make an informed decision in this situation. Thank you all again.

Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes

4y

All agents need that to work for you. On commissions you can't expect them not to be payed if seller won't, this is typically for FSBO, off market, wholesale situations, etc. If you are mainly looking on the MLS sellers will pay the agents commission. Make sure to vet the agent and find one that fits you, the worst thing is to be tied to one that isn't able to meet your needs.

3 Reply

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thank you Caleb, that sounds reasonable.

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

4y

For investors that find many of their deals off market paying an agent for deals that the agent had no connection to would be problematic. Of course a one time home buyer looking for a property is a whole different scenario. This was the main reason why I didn’t buy a franchise from a well-known homebuying company. They wanted me to pay them a fee for every home bought even if the home was bought in another area and did not use any of their marketing material or representation. If you’re completely happy with the agent then you probably would not need to work with multiple agents anyways, but if it’s an agent that does not return your phone calls or was too busy to help then you’re in a jam. As one poster mentioned above it might show extremely Goodwill to pay them something even if you do not buy anything.

Minna Reid

Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes

4y

I won't work without a contract, for many of the reasons stated above. Investors can be tricky though, so I do make some adjustments at times in what is covered by the agreement. I also always make my initial buyer reps for a very short time - like 30 days, in case we don't click. I suppose its possible a buyer may not like me or I won't like them, and no need to be tied together if that's the case. I bet if you ask to make the agreement for a shorter "trial period" you won't get push back.

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thank you Joe and Minna, yes my agent seems to be very attentive to my me and very responsive when it comes to communication. My biggest concerns were having to pay out-of-pocket be commissioned, and that I would be tied to that specific person even if things did not click between us. I will voice my concerns on the matter when we meet.

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Wale LawalBusiness Member

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

4y

The Buyer Rep Agreement protects the agents time, knowledgeable and commitment you their client. This is pretty common for agents to do. That it is why you should always look for an agent that best aligns with your goals.

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Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

4y

Don't sign it. I average 5-10 million in sales a year and have never had a client use another realtor at the last minute and never used one these forms to "protect myself". I have only really seen them used with desperate for money newer/part time agents willing to screw you over if it's a bad fit. I had an issue once where my client signed one of these and then realized her realtor had no knowledge of investments and we had to wait months to close so that she wouldn't have to pay thousands of dollars to the old agent.

3 Reply

Minna Reid

Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes

4y

@Henry Lazerow Not only is it state law (most states) to have a written representation agreement, most professionals use contracts to ensure payment and detail services rendered, instead just going with the hope and prayer method. Just because you're scared to to ask for a necessary (and legally required) compensation/agency agreement, doesn't mean the rest of us are. It is usually the newer and part timers who lack the confidence to have this conversation with their customers, and therefore just hang around silently, hoping to get paid. Also most folk simply don't understand buyer agency, so detailing it in a written agreement and explaining the document to the client helps them understand the relationship as well.

Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

4y

I have a non exclusive agreement I give clients. Sounds like you dont have the confidence that people will continue to work with you without you penalizing them to leave.

Minna Reid

Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes

4y

@Henry Lazerow A non exclusive agency agreement or an unrepresented agreement? So you're just scared to ask for the exclusive then, or do you not want to be bound to provide exclusive fiduciary services to the customer? LOL

That agreement goes both ways you know.

My time is valuable and I don't waste it. But you do you boo.

Joe FunariBusiness Member

Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes

4y

@Chance B. I am a fellow investor and realtor working here in the Dallas/Ft. Worth area. I work specifically with other investors to help them buy and sell. All of the posts on this thread are valid. But I have personally not required my clients to sign a buyers rep agreement. Mostly to give my clients flexibility to purchase in other markets here in Texas where I do not work in. But if they want to work with me then fine work with me. But if you want to go work with another realtor then I have failed them in some way. So I ask them to let me know if they discontinue working with me. But it rarely happens. But sometimes clients aren't a good fit for me either. I have been doing this long enough I can tell after the first phone call I have with potential clients if they will work with me or not. Hope this helps you in your REI journey.

5 Reply

OP

Haltom City, TX · Member since 2021 · 36 posts · 16 votes

4y

Thank you Wale, Henry, Minna, and Joe. I enjoy hearing everybody's thoughts and opinions and take them all into consideration while doing my own research and decision making.

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Peter TverdovBusiness Member

Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes

4y

I've never personally made someone sign one while acting as a buyers agent but that's because I screen buyers and only work with serious people. Tire kickers I pass on.

Kevin C.

Real Estate Broker · Anchorage, AK · Member since 2012 · 89 posts · 77 votes

4y

Agents worth their salt will almost always ask you to sign an exclusive representation agreement.

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

4y

Originally posted by @Kevin C.:

Agents worth their salt will almost always ask you to sign an exclusive representation agreement.

There are several agents worth their salt that already posted above that don’t use the exclusive representation agreement.

Jack Bobeck

Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes

4y

@Chance B. Don’t sign the garbage. Would you sign something similar to biy a car? Say you shop at dealers to learn about the car, then buy it from somewhere else because you got a better deal. Are all those other sales people entitled to a piece of the sale? Heck no!

I'd never sign that paperwork. A realtor is in sales. Any good one has your attention for maybe a day. After that, hey the MLS is at your fingertips. You like a new Realtor, try them out. Don't be "stuck" having to be exclusive with just one. In my area there are over 11,000 realtors. Most are terrible and never earn more than 25k a year, they just don't care. So why be exclusive with mediocrity.

3 Reply

Jack Bobeck

Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes

4y

@Chance B. “Competent”? How do you know? Would you want a salesperson to be your only salesperson for 3-6 months only to find out they are lousy at their job?

Don’t sign it. There are always hungry agents willing to work with you who won’t require representation for 6 months. It’s your money, your call.