Relationships with Realtors

16 Replies

Would some of you be willing to share how you structure your agreements with the Realtor(s) you work with?

I've been working with a friend who is a Realtor, and I've signed the standard buyer agency agreement form, which states that I can't buy any property without paying them a commission, even if it's something off-MLS from a wholesaler or a private seller working without a Realtor.

My friend is pretty new at this (as am I).  I don't want to take advantage of a friend, and she has been doing a good job.  But it also doesn't seem to make a ton of sense to be locked in to paying a commission on properties that I didn't really need or use a Realtor's services to purchase.

Any thoughts?

I didn't realize people were even signing that document.  What made you want to be locked into one realtor?  

Frank Romine, Real Estate Agent in CA (#01957844)

I have a license and I wouldn't be able to look anyone in the face and have them sign a exclusive agreement with me.  Even when I have a listing agreement signed I feel if the seller ever feels I'm a slacker and not performing they can terminate it.  

Frank Romine, Real Estate Agent in CA (#01957844)

Thanks, Frank.  I think it's pretty standard in DC, at least for regular primary residence buyers, probably not for investors.  I signed one when I bought my own house a few years ago.

Just wondering what standard practice is for investors.

Never heard of it applying to non MLS listed properties.

I am an agent. If I didn't do any work, I wouldn't expect to be paid. I have buyers sign a buyers rep agreement, but they always end at the closing of a property of the agreed upon end.

Now, I am not working with an investor who is buying tons of properties, so at that point maybe things would be setup a little differently.

@Will Johnston  Read the agreement again.  I'll bet there is an expiration/termination date and/or the agreement is good for a singular transaction.  I might be wrong, but I doubt the agreement locks you in for eternity.

Phillip Dwyer, Real Estate Agent in NV (#BS.0142939)

I'd also think that if this agent were your "friend" or even a good business person, that he/she would be open to a negotiation of the terms of the previous agreement.  The more successful you become, the more business that agent will get anyway. 

Phillip Dwyer, Real Estate Agent in NV (#BS.0142939)

Thanks, all.  Had a great conversation today, and we've got it figured out.  We're going to do a non-exclusive buyer agency agreement, which basically states that she gets paid on properties she helped me purchase but leaves me free to pursue other avenues or even work with other Realtors on other properties.

For those wondering about the specific terms, I definitely read it, and it states that if I buy any property during the duration of the agreement--or any property for 30 days thereafter without using a different Realtor--I owe the commission and broker fee. Definitely not an investor-friendly document, but it's the standard one used by Realtors in DC.

Originally posted by @Will Johnston:

I've been working with a friend who is a Realtor, and I've signed the standard buyer agency agreement form, which states that I can't buy any property without paying them a commission, even if it's something off-MLS from a wholesaler or a private seller working without a Realtor.

My friend is pretty new at this (as am I).  I don't want to take advantage of a friend, and she has been doing a good job.  But it also doesn't seem to make a ton of sense to be locked in to paying a commission on properties that I didn't really need or use a Realtor's services to purchase.

Any thoughts?


In my state, Florida, the seller pays the commission. Is it different in DC?

A broker's buyer agreement, in Florida, is there to protect an agent. Ask yourself, why would an agent work countless hours, use his/her own resources (especially car and gas), be on constant call, only not to get paid a cent? (It doesn't matter whether the property is on the MLS or not. She might find one that's FSBO for you)

The agreement (per Florida Realtors) would protect the agent from underhanded practices by another person/agent/builder, or the buyer themselves. However an upright buyer could easily cancel the agreement and not owe anything. Even move on to another agent.

What you have to think about, Will, is how the properties that you want to buy are going to be sourced.

Do you need access to the MLS? Does a Realtor have to find you the properties, or can you employ someone else?

If the properties are on the MLS, a commission will be paid. Your friend might as well be the one collecting it. She will have (even though she is new) the ability to negotiate the deal, contact anyone dragging their heels, (inspectors, lenders, title company, lawyers, to name a few) and most likely will have a mentor at her office with years of experience helping her too, which also benefits you.

Even if it is listed on the MLS, and you think you could pocket the commission yourself, typically here, non-MLS members or people needing assistance from the listing agent (their key) only earn a 1% commission, whereas your friend would earn 3-4%, if the listing agent was not stupid.

If your properties are coming from wholesalers, other investors, FSBO's, or you're doing your own marketing, and, as such, have no need for the services of a Realtor, then I'd cancel the agreement.

Hope I helped!

EDIT: I just spotted your last post, Will. Glad you're sorted. I've left my original post in full to help anyone else.

From the last statement you mention @Will Johnston it doesn't sound like a non-exclusive agreement.  If the agent shows you the property (or makes you aware of it), then they deserve and should get the commission.  If you are doing all the work and find the property on your own, then it should be your decision whether to bring in the buyer broker.  Since it's your friend I'm sure they will work hard, but some buyer brokers get the agreement signed and just send listings or are lazy about it.  By the way, everything is negotiable in real estate including agreements.  Agents like to say there are standards, but that doesn't mean you have to accept them.

@Louis Leone, definitely agreed. We had previously had an exclusive agreement, which is what I was describing in the last paragraph I wrote. We're going to sign a non-exclusive agreement so that I can pursue deals from wholesalers or off of the MLS without a commission.

My wife and I had a realtor referred to us when we were shopping for our first house together.  Upon meeting her for the first time on a day she was going to show us a house, she hands us the buyer's agency agreement asking us to sign before going to the appointment.  I previously told her on the phone we weren't interested in signing anything so it was a major turn off.  We told her we weren't going to sign it without seeing how things went that night.  She backed down slightly saying she would show the houses planned that evening but would not show anymore without the agreement. 

She gave us the "I don't work for free" babble.  My wife and I exchanged some whispers when heading to the car how we were going to go in another direction after that night.  As luck would have it, we found the house we wanted that night.  We talked about it that night and despite being turned off by her we made our offer through her.  We felt it was the right thing to do since she showed the property, but it didn't make us feel good working with her.

And the firs impression was consistent with our experience during the entire process.  I had my insurance company call and ask about which fire department responds to the property we were purchasing.  I contacted my agent and she suggested I CONTACT THE SELLER and ask him.  Definitely a WTF moment.  That was what she was there for.  So she basically earned a commission that she really didn't deserve. 

A month or so after closing I was ready to put my prior residence on the market.  I contacted the seller's agent of the house I just purchased and gave her the listing. 

Moral of my long ramble of a story:  I will NEVER sign one of those agreements, and if it is means an agent won't show me a house then I will just move on to someone else.

Account Closed I'm sorry you had such a bad experience. There are too many agents who give Realtors a bad name. We get paid because we do all the running around, and finding out the facts. Maybe to her her job is just a little extra pocket money? She's certainly not business minded in my opinion. Thinking about it, she probably wants the agreement signed because she's given such poor service before that her "customers" usually dump her!

She was lazy. I admire you for your decency in working with her as she showed you the home. You did the right thing. she did not.

Hello all,

I am a bit confused. If I am the buyer of  a piece of property and it happens to be listed by the agent. I am under the impression that the SELLER of the property since they are the ones who CONTRACTED with the real estate agent is suppose to pay the realtor's commission. Even if i work with a realtor to show me homes, he is showing me homes that the seller has listed with an agent. Granted if my agent is not the listing agent and there is a 6% commission fee then the commission just gets slit 50/50 with the agents. But the SELLER still is the one that pays for the commission. The agent showing me homes, well that is their job!!!

Now when I go to sell the homes I purchase and use the agent, then I PAY THE COMMISSION. I have never heard of the buyer paying a realtor's fee. Maybe its just in different states. 

@Natasha Wade, the standard buyer broker agreement in the DC area says that the buyer must pay the comision but is offset by the cooperating fee from the listing agent. This allows the buyers agents to show properties where there is no commission such as a FSBO, or a sub standard cooperating fee like Redfin does from time to time. When this happens though most agents make it clear that the buyer would need to pay them a commission.

Regarding people who do not want to sign an agreement...understand in Maryland and DC, as well as several other states an agent can not show a property listed out of their brokerage without that signed agreement. For instance I work for Long and Foster thr largest brokerage in the DC area. If a client of mine does not want to sign the agreement, I can not show Long and Foster listings. This is because without the agreement, then I would be de facto representing the seller and MD law does not allow for dual agency.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

@Natasha Wade The buyer/broker agreement in NC works the way @Russell Brazil described it too. The buyer is responsible for paying their agent.  However, the seller's broker typically will offer to split their commission with a buyer's broker, and any money the seller's agent offers offsets the amount the buyer is responsible for.  For example, if the buyer/broker agreement says you will pay 3%, but the seller's agent is only offering 2.5%, then the buyer is responsible for making up the difference.

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