Signing an 'exclusive' agreement with an agent - downside?

Question

Hello from Omaha! Just getting started and focused on wholesaling initially to generate some investment dollars...looking to BRRRR down the road. Working on putting a team together, i.e. agent, lender, property manager etc.

My agent wants me to sign an ''exclusive" agreement with him. Do I have an option? Will you please share what you've experienced related to the pros and cons of signing an "exclusive" agent agreement? Thanks a million!

Kyle Godbout · Answer

@Michael Kelley

I’m a local real estate agent and investor in Omaha. I always have my investor clients sign an exclusive agreement. It simply states that if they end up buying a house that I introduce to them or show them that I’m entitled to the buying side commission. They are free to use other agents as long as they look at different properties.

Scott Bergmann · Answer

It depends whether it is a  listing agreement or exclusive buyers agreement. An exclusive listing agreement makes sense but as an investor it is rare that you get an exclusive buyers agreement. Most investors are of the opinion that they will work with an agent if the agent brings them a deal. You are not required to get an exclusive buyers agency agreement.As an investors agent I only get an exclusive agreement with a buyer when we have identified a property because at the top of the exclusive buyers agency agreement in the Nebraska it requires you to put an address. I am a real estate agent and I have honestly worked with a good amount of investors here on BiggerPockets so if you would like me to take a look at the agreement or schedule some time to talk about your options feel free to shoot me a message

Mark Maly · Answer

Definitely make sure the agreement states its only for properties that agent introduces to you like @Kyle Godbout mentioned.

Michael Kelley · Answer

Thanks Troy!

Michael Kelley · Answer

Thanks guys, that makes sense... much appreciated.

Account Closed · Answer

This happens a lot where a buyer sees a house with a real estate agent and then goes to a different agent to buy the home without ever telling the first agent. Just last month in my brokerage, an agent was showing houses for over a month to a couple and they saw a house they liked. They didn't put an offer on the house and told the agent they wanted to wait but ended up going to the open house that weekend and made an offer with the listing agent. If it's to make sure that doesn't happen to the agent, I would agree that it's a safe bet for the agent. But if it means almost anything else, I would be a little wary of it.

Michael Kelley · Answer

Thanks Mark!

Signing an 'exclusive' agreement with an agent - downside?

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