Signing an Exclusivity Agreement.

[Chance B.]

Hey All, I am looking to purchase my first property (which will be residential), but the agent I am working with sent me over an Exclusivity Agreement. I am concerned because in the agreement it states that is the seller "refuses or fails" to pay the commission, that the client (me) will be responsible for paying the broker. It also states that The client (me) may be "unknowingly recorded or otherwise monitored without consent." It also has some stuff about a "protection period" basically stating after the contract ends if myself or a family member purchases property from the broker I will be held responsible for the fees the broker was originally entitled to. We haven't nailed down a specific address yet but the contract spans multiple counties. I have read other posts but they all seem to be 1-3+ years old and I know things change, is this something that is normal or should I walk away. I haven't been or plan on "shopping agents." I have seen mixed reviews from "if their time is valuable they make you sign it so they don't waste their time" to "only bad agents make you sign, if they are good, they won't have to worry about you leaving."  Sorry for the long post but your input is very much appreciated.

[Irene Nash]

@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!