Realtor wants us to sign contract.

63 Reply

Frank Wong

Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes

7y

Originally posted by @Don Konipol:

@Keith Hackett

Look at it from your Realtors viewpoint. All she has to sell is her time and expertise. She’s willing to spend an unknown but presumably large amount of her time, as well as offer to educate you, and all she wants is your promise that if you buy a property you will allow her to make the commission. Almost any other profession would charge per hour, or charge a retainer. If you wanted the same deal from a lawyer, you would pay a $10,000 to $20,000 retainer.

Everyone has to follow their own policy. If i was in her position I wouldn’t continue unless you signed the exclusive agency agreement. You are far from serious buyers.

Man Don nailed it. This is a pretty common practice from realtors. They don't know you and they are just asking for a commitment. You can ask the realtor to limit the contract for 3 months. You may even ask for an exit clause. Maybe a month into the process you guys don't click anymore and need to cancel. If the realtor turns out to be horrible you can go the managing broker and discuss exiting the contract.

10 Reply

Christopher Lombardi

Developer · Point Pleasant Beach, NJ · Member since 2015 · 303 posts · 216 votes

7y

@Keith Hackett it’s sounds like you really like her and intend on using her. I would sign the agreement if she is spending that much time with you. She is afraid she is going to spend countless weekends showing you homes and then you decide to call another agent one day when she isn’t available and buy a house and she gets nothing.

Personally, I prefer to go directly to selling agents and make offers through them but if you already have used her to see a bunch of homes and continue to do so, the right thing to do is to sign the agreement and let her get the commission when you buy a house. Best of luck to you.

6 Reply

OP

Rental Property Investor · Clarksville, TN · Member since 2019 · 44 posts · 31 votes

7y

@Don Konipol Thankyou. We will go ahead and sign with her. We just weren’t sure what we were getting ourselves in to, if we did. Thank @Don Konipol and Thankyou BiggerPockets for the connections here.

8 Reply

OP

Rental Property Investor · Clarksville, TN · Member since 2019 · 44 posts · 31 votes

7y

@Frank Wong Thankyou

OP

Rental Property Investor · Clarksville, TN · Member since 2019 · 44 posts · 31 votes

7y

@Christopher Lombardi Thankyou

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Investor · Punta Gorda, FL · Member since 2015 · 35 posts · 30 votes

7y

I’ve bought many homes and have never signed a buyers agent contract, nor would I.

Does it have a cancellation clause?

I can see it from the realtors perspective but, at the same time it locks you in. What if they don’t perform? Suddenly stop responding timely?

Do you have Redfin available in your area? It’s a really neat concept because associate agents are actually paid for each showing - They want to show you as many as you want to see. We’ve had great success with them.

Good luck on your search!

2 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

Originally posted by @Chuck Mader:

I’ve bought many homes and have never signed a buyers agent contract, nor would I.

Then in about 50% or so of states, you couldnt use the services of an agent. Roughly half the states require per law a written contract between agent and client to provide services.

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5 Reply

Investor · Punta Gorda, FL · Member since 2015 · 35 posts · 30 votes

7y

@Russell Brazil

I wasn’t real clear - I have signed at the point of making the offer.

I think this really boils down to the level of trust and, thinking through if there isn’t mutual trust then you probably shouldn’t be working together anyway, right?

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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

@Chuck Mader

Ideally of course you should trust who you are working with.

I just like to point out that the law does require them in about half the country. (Now that doesnt always happen of course)

In Maryland, Im not supposed to open the door for someone without one. In absence of one, I need to hand them a form that states I work as a subagent for the seller, and Im required by law to work in the best interest of the seller and against the interest of the buyer, even though Ive never met that seller.

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5 Reply

Investor · Punta Gorda, FL · Member since 2015 · 35 posts · 30 votes

7y

@Russell Brazil

Interesting. Thanks for that clarification!

Brian D. Beatty

Real Estate Agent · Clearwater, FL · Member since 2017 · 99 posts · 66 votes

7y

@Keith Hackett

As an Agent it clearly defines the aspects of your relationship. I would ask what the ability to get out of contract consists of. Ours you just call our broker, which has there name and number, most likely you are released of any tie. Unless we were the procuring cause, of a property you are actively trying to purchase. If we are, most likely our broker will assess your needs, pair you up with another agent that may be a better fit. Everything in Real Estate is negotiable, so make sure you know what your outs are. If you're comfortable with the agent, I would not hesitate signing the agreement.

Jonathan Tavarez

Flipper/Rehabber · Laurel, MD · Member since 2016 · 139 posts · 109 votes

7y

It is a very common practice (specially when the home buyer is going to take a significant amount of time from the realtor). My wife is a realtor here in Laurel Maryland and she requires that signed document from all her clients.

Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

7y

Just look at the cancelation clause and make sure you are okay with it. You can also limit it to a region if you need too. (for example if you haven't settled on an area at this point). I have signed with people per property on occasion but what you are doing looking for your first home it is reasonable to have some sort of agreement with a cancelation clause.

Wes Johnson

Developer · Dallas, TX · Member since 2015 · 84 posts · 79 votes

7y

@Keith Hackett

Not sure about Colorado but in Texas we can have you sign a contract only for the particular property you're interested in. So for instance I'll tell you everything about the property except the address. Nor would I show it to you. If you want to know more or see it in person, we sign a contract for that property only. It protects me and my commission and it allows you to work with any other agent you want.

Nick Rutkowski

Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes

7y

@Keith Hackett

If you don’t like contract and love to look at what’s on the market, you can always go to open houses.

If you want a realtor to show you houses you have to show some commitment or proof you’re ready to buy. We make a living off of selling, don’t take it personally. Our kids need to eat too!

2 Reply

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

7y

@Keith Hackett. I prefer not to do this either but I get it from the agents perspective. I just signed one of these. She wanted 6 months, I said how about 3? She agreed, we already have one deal done together. After the 3 months expires, I’ll probably not renew since they’ll know what sort of deals l like

Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

7y

@Chuck Mader, Hi Chuck, could you elaborate on the terms of Redfin paying agents to show property? I am totally unfamiliar with this business strategy.

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Yannik Cudjoe-Virgil

Rental Property Investor · Baltimore, MD · Member since 2016 · 253 posts · 178 votes

7y

Originally posted by @Keith Hackett:

1st time buyers. We just got approved for our first home loan. We understand that we need to look at many, many, many properties to educate ourselves on what is a good property and what is not. Our realtor is willing to show us as many properties over however long a span we need/ want (at least today that is what she said). We have viewed three homes and we love the realtor. Keep in mind we are comparing her to nobody because she is the first realtor we have seen in person. We have viewed 3 houses. Everything is going great. We already know one house is a “no-go” and have the other two to compare against each other. Everything is perfect which is why I’m worried. Our realtor wants us to sign a contract (which we haven’t yet) that basically states she is our official realtor and we won’t use any other realtors to view properties.

I do not like contracts.

I like flexibility.

I like learning.

I like comparing and contrasting people in the same way I intend to compare properties.

So far I like the realtor.

We intend to live in the house for a year or more before selling/ renting.

Advice?

Great points in previous posts. The realtor is spending time and is providing a service to you. They would like to ensure that they are representing you and not wasting anytime that they can give to serious clients. There can be alot of tire kickers in this industry. I would suggest signing with them if she is doing a great job.

Account Closed

Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes

7y

@Keith Hackett

You are just starting out. Your agent is experienced (hopefully) and knows things you have no idea you don't know. If your agent is going to work with you (you are "high maintenance" at this stage), she likely wants to know she will get a payoff for her efforts eventually.

I don't remember if my agent required a signed exclusive-representation contract when I first approached her about buying a house (California), but if she did, it was worth the commitment on my part. I had also done a lot of preparation ahead of time and had a list of questions at that first meeting. After she heard me out, I went away with a list of tasks I needed to get done to be ready when I made an offer on the house I wanted to buy. She became my business consultant who was paid on her share of the commission she made when escrow closed (the seller pays the sales commissions from the money received from the buyer -- the escrow company does this as part of its contract).

2 Reply

Marci Stein

Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes

7y

Contract or no contract , if she does her job well , you will buy from her.

Period .

Preston Quinn

Rental Property Investor · Lynchburg, VA · Member since 2018 · 116 posts · 73 votes

7y

@Keith Hackett

My realtor gets me to sign a contract on every house we offer on. I’ve signed 4 in the last 3 weeks. All of which have been rejected. If your realtor is on your team, then it shouldn’t be an issue. I completely trust my realtor. She has made me more money than I have made her. That’s for sure.

OP

Rental Property Investor · Clarksville, TN · Member since 2019 · 44 posts · 31 votes

7y

I LOVE BP!! You are all incredibly helpful. Wow. I got so much insight from a single question. Absolutely amazing. Thankyou to EVERY single person that commented. Even the ones that were not directly to me. So much knowledge.

Dylan VargasPro Member

Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes

7y

@Keith Hackett @Wes Johnson Welcome! I would only sign a deal for the houses this Realtor shows you. No way should you be in an exclusive relationship to buy any house with her as your buyers agent. Like what Wes Johnson stated. This would be more normal. You barely know this agent and everyone is happy at the beginning of the relationship. With that being said, I would sign for houses only that particular agent shows me and use her for your purchase.. I wouldn't use other agents if you are basically looking off the MLS as this current agent is doing this with you. Make sense? Good luck and keep us posted.

Investor · Punta Gorda, FL · Member since 2015 · 35 posts · 30 votes

7y

Originally posted by @Don Konipol:

@Chuck Mader, Hi Chuck, could you elaborate on the terms of Redfin paying agents to show property? I am totally unfamiliar with this business strategy.

@Don Konipol -

This is my understanding of the Redfin model gained from using them a few times.

When you use the Redfin app to set up a viewing, the Redfin agent that shows the house is an associate agent. They are junior agents and are paid per showing. It’s been made clear to us that they want to show as many as possible because they get paid for each showing.

Simultaneously, we were working with a senior agent who would show houses, as available.

It sounds kinda clunky but we have been very satisfied every time we have dealt with Redfin.