Realtor wants us to sign contract.

Buying & Selling Real Estate
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Realtor wants us to sign contract.

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

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?

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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
7y

@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.

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  • Account Closed
    New to Real Estate · TX · Member since 2018 · 56 posts · 24 votes
    7y

    @Keith Hackett

    All is she is asking from you is a commitment that the time and gas she is investing she will be compensated for. It doesn't cost you anything.

    Sign it.

    2Reply
  • Lisa Miller
    Real Estate Agent · Augusta, GA · Member since 2017 · 71 posts · 22 votes
    7y

    Yeah, sign the contract, this is just assuring her that she is not wasting her time with you.

    1Reply
  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    7y

    @Chuck Mader  Redfin agents receive a salary, benefits and paid time off.  

    Compare that to other agents who get none of those things, plus they pay their own expenses and make ZERO unless they get your house sold or help a buyer to find one.

    Question 1: Which agent is motivated to work harder?

    Question 2: Which agent do you want working for you?  The one with more hustle or the one on a salary?

    2Reply
  • Account Closed
    Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    7y

    You can also use this contract signing as a way to screen other agents. Contacting realtors is much easier now with social media sites than it was back in the day. A reputable agent will ask you if you are working with another agent because as I understand it, agents are not supposed to poach the clients of other agents. My takeaway recommendation is to connect with several agents on social media, but work exclusively with one. If the first agent falls through, then choose one from your B list (of course, never let an agent know if they are on your A list, B list, or C list).

    0Reply
  • Josephine Giordano
    Real Estate Agent · Brooklyn, NY · Member since 2018 · 22 posts · 13 votes
    7y

    @Keith Hackett

    Hey Keith.

    Don’t be scared about purchasing a home once you’ve taken the right steps to

    *make sure the home has no defects (let it pass inspection)

    * you’ve checked the neighborhood out and it works for you and your family or as an investment.

    If you tell yourself it’s the right choice it will be.

    As an agent... I want to make sure I’m not spinning wheels with clients. A pre qualification letter and an disclosure form is important so I can protect my time spent.

    Wishing you nothing but success!!

    0Reply
  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    7y

    Every agent has had a time when they ran out at all hours, scheduled 20 showings, spent countless hours answering every question imaginable, used their contacts to solve some emergency plumbing or electrical issue. To all of a sudden get a client go "radio silent" they found some FSBO and instead of calling you went and looked at it. Then paid "asking price" for it even though the guy had it on the market for 107 days. He said "we were saving commissions". Most times they call and ask if you know a good mover and ask if it's "Ok to still call and ask questions because there are alot of things they don't understand about the contract they signed, also can we setup a time to look over this inspection report".

    Usually after a couple of those agents start to require a contract before showing. I am similar to your agent, I'll show a couple then we need to get something on paper.

    1Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    7y
    Originally posted by @Marci Stein:

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

    Period . 

    In a ideal world, maybe. Experience teaches me the above statement is uncategorically false. People buy from an agent different than the one that educated them and spent all her time with them for numerous reasons including the following: their brother in law just got his license and they want to help him out; they've taken up so much time with their initial agent that they're embarrassed to take up anymore time; they saw a listing themselves that's perfect for them and they think their agent is incompetent for not showing it to them; they've changed their minds about what they want for the twentieth time and don't understand why the agent is still showing them listings from their nineteenth mind change; another realtor offered them a 1% ‘cash back', they saw a listing off MLS and they want to "save" the commission; after catering to them for five straight weekends the agent is unavailable until Tuesday and they're miffed; they attended an open house by themselves and they hit it off with the agent on duty; they think they can save money by buying through a dual agency with the listing agent; and about a million more reasons I haven't listed.

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  • Chuck Mader
    Investor · Punta Gorda, FL · Member since 2015 · 35 posts · 30 votes
    7y
    Originally posted by @Charlie MacPherson:

    @Chuck Mader  Redfin agents receive a salary, benefits and paid time off.  

    Compare that to other agents who get none of those things, plus they pay their own expenses and make ZERO unless they get your house sold or help a buyer to find one.

    Question 1: Which agent is motivated to work harder?

    Question 2: Which agent do you want working for you?  The one with more hustle or the one on a salary?

     I’m not here to promote Redfin. I am simply reported my experience which was:

    1.  Both times we’ve used Redfin to purchase we’ve won in multiple offer situations (and got cash back). 

    2.  Our last sale we paid 4.5%, had a 99% contract in 7 days, and closed in 30. It was a smooth transaction. 

    3. We were recently dealing with an independent agent who is reliant on the “hustle”. It took me two weeks to get a meaningful conversation with him and after 3 attempts we still never got the info requested.  

    Bottom man is it’s dependent on the agent. 

    0Reply
  • Account Closed
    SF- East Bay Area · Member since 2019 · 13 posts · 6 votes
    7y

    The contract is a buyer broker agreement (at least that is what we call it in California). If you like your realtor and intend on using her, it should not be any problem. All it states is that she solely represents you (the buyer) in the transaction. It is just an agreement you will use her to buy a property. 

    I also use this too, I know some people really don't like contracts but I explain the entire contract to them and heck, I let them read the entire thing themselves if they really want to. We do this because there are some people out there that are not entirely trustworthy. Look at it from the realtors perspective- she is spending her weekends showing you homes, doing research for you, and constantly staying in contact with you. The least you can do is commit to her (if you actually like). You can even set a time on the contract for when you want it to expire. 

    Good luck on your house hunting!

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Keith Hackett if you like them then sign the contract. Why would they work with you with no security that you can’t jump ship when you see a realtor you find interesting. All the contract is doing is protecting her time.

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Russell Brazil exactly. In many states you owe duties to the seller without a signed buyers agency agreement. It really is in the buyers best interest.

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  • Teri Feeney Styers
    Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
    7y

    @Keith Hackett in Colorado Realtors are required to keep on file a number of documents. One of these is called: Brokerage Disclosure to Buyer. Perhaps that is the "contract" you are referring to? It doesn't obligate you to buy - it simply spells out the relationship between you and the Realtor. Don't hesitate to sign it. 

    0Reply
  • Brian Egr
    Flipper/Rehabber · Lincoln, NE · Member since 2016 · 144 posts · 71 votes
    7y

    There's more to the Realtor wanting you to sign the contract that just a commitment that you will use them exclusively for your purchase.  There is also language in the agreement (at least in Nebraska) that outlines the role and responsibilities of the agent in the transaction, who specifically they represent in the transactions, the extent of their fiduciary duty etc....

    You won't be able to make an offer on a house through a buyers agent until you sign the agreement with some agent, whether it's the one you are using now or a different agent sometime in the future. 

    I would also add, if you told this agent up front you want to look at a lot of houses before you make a decision and they still agreed to show you properties without an exclusive agreement signed they are going to work hard for you through out the process.  I run into a lot of agents that won't even show a single house to a buyer without a signed exclusive.  

    0Reply
  • Joseph Walsh
    Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    7y

    Odd, this exclusivity contract sounds more like a realtor that is used to selling houses.  My current house, my wife and I had to look at 40+ houses over the course of a year, and we finally pulled the trigger.  Our buyers agent never once asked for that kind of commitment.  We did sign a contract prior to making offers (and there were quite a few we missed on) authorizing her to act on our behalf, but it was never an exclusivity contract.  Personally, I'd find another.  However, We weren't first time buyers, and she might just trying to be sure you aren't just "kicking tires" and are committed.  Are you pre-approved for a loan?  While I get their perspective, I don't like it.  If I am calling her regularly for houses, I clearly am committed to her services.  We also sent her other buyers and sellers, and continue to do so years later.  What if she goes AWOL for some reason(vacation, sick, busy with wealthier buyers...etc.) and you miss on a house?   I would be wary unless there is a good exit clause.   Again, sounds like you found a good agent, but trust goes both ways.

    0Reply
  • Ryan McKelvey
    Jacksonville, NC · Member since 2018 · 67 posts · 58 votes
    7y

    @Keith Hackett Please keep in mind realtors work on commission. Imagine your boss asking you to do work for 2-4 weeks, then after that point deciding on whether he liked the quality of work you did, and then decided if he was going to pay you or not. You should definitely interview realtors, but do this before you decide to start looking at houses to ensure they are giving you the quality of service you want. You may think that all realtors make a ton of money, but that’s entire not true. This is their livelihood, just like your job is to you and your family. I would advise having a mutual respect for their time as they have for yours. I wouldn’t continue to show houses to someone either without a buyers agency agreement. The realtor could be spending time showing homes to another client who has respect for their time. So yes interview realtors. Always advise 3, but do this at the beginning of the process.

    0Reply
  • Account Closed
    Flipper/Rehabber · North Brunswick, NJ · Member since 2017 · 141 posts · 104 votes
    7y

    This thread is honestly amazing. Here's the catch, let's say she gets frustrated with you and stops responding to your texts and calls; you're screwed because you can't use anyone else. Just a thought

    0Reply
  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    7y
    Originally posted by @Account Closed:

    This thread is honestly amazing. Here's the catch, let's say she gets frustrated with you and stops responding to your texts and calls; you're screwed because you can't use anyone else. Just a thought

     The flip side to that is the Agent shows the buyer 50 homes and provides valuable information, then the buyer stops buy an open house and buys the property.  The agent gets nothing for their time

    Seems to me the agent here showed some properties in attempt to build a relationship before looking for a commitment 

    2Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    7y

    When I'm ready to buy, I look on average at about 15 properties before I submit an offer (after disqualifying about 40-50 properties that my broker have in his list for me).  I have purchased 3 properties already with the same broker.  So, you have seen 3 properties and you think your realtor is persuading you to buy one already? Hummm... 

    I'm surprised the realtor have not make you sign an exclusive agency agreement if you are a fist home buyer or haven't use the same realtor/broker before.   

    No pressure, they can't make you buy anything you don't want, but their time is valuable as well.  I think you are requesting a ton of flexibility that is not often common for first buyers, and that is a sign of not being a "ready buyer" or serious.  You should have some flexibility for them as well to make it work.  

    On another note, your realtor may sees you as you are looking for coaching and becoming very familiar, sucking all his time and experience for free.  I believe you are just a little bit stressful because is your first big investment and you feel you don't know it all.  It will go easier after the first property.  

    1Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 655 posts · 293 votes
    7y

    She wants you to sign a buyers agreement. Like others have said, if you like her, sign it. It doesn't obligate you to anything except that if and when you buy the home, you will use her. It's insurance. She will spend her time and money showing you places and it's just insurance and assurance for her. More assurance. Many agents have been burned in the past and it also shows that you are serious 

    You will be signing more contracts once you find a home you want to buy!

    0Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 655 posts · 293 votes
    7y

    Also here's some advice when looking for a home. EVERYONE has their own way of doing it, like above. 

    Define your criteria, beds, baths, lot size, number of floors, location, and price, and anything else. Be careful not to become too particular for the market or you will narrow yourself out completely. Look at the big overall things, the characteristics of the home that you cannot change. And when you find the place, jump on it. You're doing the right thing by getting educated and figuring out what you want.

    0Reply
  • Bobby Shell
    Investor · Fort Collins, CO · Member since 2018 · 165 posts · 127 votes
    7y

    @Don Konipol is here with don here.

    This is 100% normal to say “this is my realtor”

    I have gone through 3 agents when buying my first home. Many are not as great as they claim. Sign and agree to work with them. You can always back out. But do you due diligence. You don’t want to jump around realtors, you want to protect yourself. Qualify them as best you can, get a referral, and try to stick with one you can trust.

    I was burned a few times, I didn’t want to KimRoomie around. It was a headache!

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    7y
    Originally posted by @Account Closed:

    This thread is honestly amazing. Here's the catch, let's say she gets frustrated with you and stops responding to your texts and calls; you're screwed because you can't use anyone else. Just a thought

    Then the agent is in breach of the contract, so they move forward with another agent. IF that agent were to sue for the commission due per the agreement after breaking the terms of said agreement, the judge would throw them out of the courtroom.

    And on that note, the agreement is with the brokerage, not the agent. So the brokerage would have to sue the buyer, and unless its a HUGE commission (6+ figures), its very doubtful they'd do so. Beyond the low chance of collecting anything even if they get a judgement, the bad press would be devastating. If an agent is on an 80/20 split, the brokerage stands to make about $1,000 on a $200k sale. No broker is going to ruin their reputation by suing a client and spend at least $10k in legal fees to do so in order to make $1k.

    Like many contracts, this is more-or-less a "gentleman's agreement", one made of mutual respect for the business relationship.

    1Reply
  • Carey Greiner
    Real Estate Broker · Bend, OR · Member since 2017 · 46 posts · 20 votes
    7y

    @Keith Hackett as a Realtor I can spend a lot of time assisting a Buyer that may or may not actually buy. I choose to work with only friends or referrals, but can work with a committed buyer that trusts me, so have used buyers contracts to clearly state the position. There are ‘outs’ that allow a buyer to cancel the contracts, usually.

    0Reply
  • Carey Greiner
    Real Estate Broker · Bend, OR · Member since 2017 · 46 posts · 20 votes
    7y

    @Chuck Mader

    I think the realtor needs to provide value and earn your business. Seems quality folks are always worth investing into.

    1Reply
  • Julie N.
    Real Estate Investor · Unionville, CT · Member since 2016 · 260 posts · 167 votes
    7y

    @Keith Hackett it’s standard proactive for real estate. You are actually signing a contract with the Brokerage- not the actual Realtor. In the event that you want another Realtor- the Broker will offer you a replacement. You’ll have to sign with someone eventually if your buying a home that is listed for sale.

    0Reply
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