I've just started investing in real estate with a Full duplex and a half duplex that I bought through my realtor. The contract that a signed with my realtor, states that all purchases in real estate that I get must go through him and he will continue to work on my behalf to negotiate and present offers? Is it usual to have an exclusive contract with a realtor? Or do real estate investor's usually just have a few go-to realtors they use interchangeably?
(I guess I am posing this question since I feel chained to my current realtor, and I preceive that I can't be as felxible in my deal seeking and buying)
Is a half duplex similar or the same as a condo?
As for the Realtor issue - I don't know what the rules are like in Canada, but I've never signed a buyer's agreement with an agent and have used the same agent to close every property I've purchased. You're better off finding somebody that wants to earn your business rather than going with somebody that forces you to use them for a presumably indeterminate amount of time.
A "half-duplex" is typically just as it sounds ... you own half of a duplex and someone else owns the other half.
I would never sign a buyers exclusive agreement. I like to deal with the listing agent, they stand to make double the commission and will work harder to get the deal done. Dealing with the listing agent also cuts one more person out of the game of telephone between you and the seller. You stand a better chance of learning the seller's reasons & options by dealing directly with the person dealing with them, a little inside info is nice.
Bad idea with the exclusive buyer contract. I most always use the selling agent for the deal. Gives them incentive to make the deal happen keeping all the commission.
Very important to know and this may vary state to state but working with the sellers agent means no agent is fully representing your best interests. The sellers agents will be looking out for the sellers best interest not the buyers. Even if your state allows for dual agency this just means the agent must disclose he/she is representing both parties. Working with a buyers agent provides you with a fiduciary agreement and someone watching out for you.
@Shawn M. is spot on in his assessment.
I do not make my buyers sign exclusive buyer agreements but If I have a client who I have done some deals with and they start interchanging and using other Realtors ( To buy homes in that target market) i'm most likely going to stop working with that client, at the very least that clients needs have just gone from an A priority to a C priority.
It needs to be a mutually beneficial arrangement. The agent is not there to be an errand boy. Agent only gets paid when you buy or sell. That commission is earned by all the running around he/she does for deals that never make it to fruition.
All that said if your current agent is not meeting your needs and you don't think the relationship is beneficial to you, you should try out others until you find the right fit. Which is why I don't have my clients sign the exclusive buyer agreements.
In commercial real estate this is very different than residential. Clients come to us for very specific skillsets and knowledge that has been learned over years and even decades.
Many residential agents it's a pot luck of what you get. 90% of them will be gone before year 1 in the business.
There are some very good residential ones out there but they are in demand. A key is if they can do anything for you at anytime then they aren't really busy. If they aren't really busy then you start to question track record and skillset and do you have the best person for your interests.
The buyers and sellers in commercial tend to be more astute. I can easily represent both sides performing ministerial acts for one and client services for another. Each side has legal counsel in the purchase and sale phase so interests are protected. A broker/agent shouldn't pin you down with an agreement however my clients are dedicated to me and I to them to reach their goals.
Flaky buyers that are all over the place and out of control shot gunning offers to see what sticks I have no time for plus it would ruin my rep with sellers and the listing brokers. My buyers tend to be focused and qualified and get the deal done if the seller accepts the offer.
I would not sign that. I would tell him if he brings me good deals I will work with him and make sure it is worth his while.
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