New Exclusivity Contract and Buyers Fees in Ohio

Sacramento, CA · Member since 2020 · 6 posts · 3 votes

Hi, I'm looking at a a new realtor and he asked me to sign an exclusivity agreement and in it compensation to the brokerage is $350 and 3% with a minimum of $3500. He states it's because of that new lawsuit with the seller's fees. Is signing this agreement the case with all realtors in Ohio now? Just curious if this will be the new norm. I'm an out of state investor. Haven't done it with past realtors but also that was before the lawsuit.

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John Clark

Member since 2018 · 1k+ posts · 1k+ votes

Quote from @Alysa Demetre:

Thanks for your response! Great questions. I still need to talk to him about term length, it was blank in the contract. And the contract was just an Ohio realtors agreement. I will ask about this too. And yes it's contingent upon a successful closing.

"Ohio realtors agreement" tells us nothing about the physical boundaries of area covered by the contract. If the real estate agent is in Cleveland and you are looking in Dayton and Cleveland -- and buy in Dayton during the time period of the contract -- will the Cleveland agent have his hand out?

And another thing: Assuming you sign the contract and there is a successful closing, does the $350 count towards the closing commission?

It goes without saying that you need to make sure that if your agent receives anything at all from the seller (or his agent), your obligation is reduced dollar for dollar.

Don't let the r.e. agent tell you that something doesn't need to be in your commission agreement with him because "it's understood" (e.g., you are credited for received commission splits). NOTHING is understood that isn't written down. You probably want your offers to specify that the first 3 percent/$3,500 (plus $350?) (whichever is greater) of the Seller's total commission obligation over $3,500 will go to your agent, and that they will split anything over that first six percent/$7,000 ($7,700?) as they see fit. That way commissions are split as they want AFTER your brokerage fee contract obligation is fulfilled.

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2y
No local knowledge but Zero chance I’d sign. Ask a few other realtors. Worst case, assuming you know what you’re doing and didn’t just pick this market out of a hat, use the seller’s agent. They might not have your best interest at heart but you’ll be $4,000 ahead and they’ll be motivated to get your offer accepted.

OTH, if you did just pick this market “out of hat”, pick a different one. The way OH gets pumped as a place beginners can out compete the locals make me think it’s shaky at best. But hopefully you’ll be bombarded by BP OH realtors with the inside scoop on the fees.
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John Clark
Member since 2018 · 1k+ posts · 1k+ votes
2y
Quote from @Alysa Demetre:

Hi, I'm looking at a a new realtor and he asked me to sign an exclusivity agreement and in it compensation to the brokerage is $350 and 3% with a minimum of $3500. He states it's because of that new lawsuit with the seller's fees. Is signing this agreement the case with all realtors in Ohio now? Just curious if this will be the new norm. I'm an out of state investor. Haven't done it with past realtors but also that was before the lawsuit.
How long is the agreement for, what is its physical limits (I assume not state wide), and is the 3 percent/$3500 contingent on only a successful closing?
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Alysa Demetre
OP
Sacramento, CA · Member since 2020 · 6 posts · 3 votes
2y
Quote from @Bill B.:

No local knowledge but Zero chance I’d sign. Ask a few other realtors. Worst case, assuming you know what you’re doing and didn’t just pick this market out of a hat, use the seller’s agent. They might not have your best interest at heart but you’ll be $4,000 ahead and they’ll be motivated to get your offer accepted.

OTH, if you did just pick this market “out of hat”, pick a different one. The way OH gets pumped as a place beginners can out compete the locals make me think it’s shaky at best. But hopefully you’ll be bombarded by BP OH realtors with the inside scoop on the fees.

Thank you for your response! I have a few other properties in the surrounding areas and a great team (PM and GC) and they've been doing well so I plan on doing a few more before I move to a different area or state. I used seller's agent last deal and I don't think I want to do that again. Although when you put it that way, definitely sounds more favorable and maybe worth a second chance lol
1 Reply
Alysa Demetre
OP
Sacramento, CA · Member since 2020 · 6 posts · 3 votes
2y
Quote from @John Clark:

Quote from @Alysa Demetre:

Hi, I'm looking at a a new realtor and he asked me to sign an exclusivity agreement and in it compensation to the brokerage is $350 and 3% with a minimum of $3500. He states it's because of that new lawsuit with the seller's fees. Is signing this agreement the case with all realtors in Ohio now? Just curious if this will be the new norm. I'm an out of state investor. Haven't done it with past realtors but also that was before the lawsuit.
How long is the agreement for, what is its physical limits (I assume not state wide), and is the 3 percent/$3500 contingent on only a successful closing?

Thanks for your response! Great questions. I still need to talk to him about term length, it was blank in the contract. And the contract was just an Ohio realtors agreement. I will ask about this too. And yes it's contingent upon a successful closing.
0 Reply
Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
2y
I mean if the realtor is providing you the value you need is it not worth it? The agreement is usually for them providing you off-market deals that they found themselves.
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John Clark
Member since 2018 · 1k+ posts · 1k+ votes
2y
Quote from @Alysa Demetre:
Thanks for your response! Great questions. I still need to talk to him about term length, it was blank in the contract. And the contract was just an Ohio realtors agreement. I will ask about this too. And yes it's contingent upon a successful closing.
"Ohio realtors agreement" tells us nothing about the physical boundaries of area covered by the contract. If the real estate agent is in Cleveland and you are looking in Dayton and Cleveland -- and buy in Dayton during the time period of the contract -- will the Cleveland agent have his hand out?

And another thing: Assuming you sign the contract and there is a successful closing, does the $350 count towards the closing commission?

It goes without saying that you need to make sure that if your agent receives anything at all from the seller (or his agent), your obligation is reduced dollar for dollar.

Don't let the r.e. agent tell you that something doesn't need to be in your commission agreement with him because "it's understood" (e.g., you are credited for received commission splits). NOTHING is understood that isn't written down. You probably want your offers to specify that the first 3 percent/$3,500 (plus $350?) (whichever is greater) of the Seller's total commission obligation over $3,500 will go to your agent, and that they will split anything over that first six percent/$7,000 ($7,700?) as they see fit. That way commissions are split as they want AFTER your brokerage fee contract obligation is fulfilled.
2 Reply
Alysa Demetre
OP
Sacramento, CA · Member since 2020 · 6 posts · 3 votes
2y
Quote from @Samuel Diouf:

I mean if the realtor is providing you the value you need is it not worth it? The agreement is usually for them providing you off-market deals that they found themselves.

I believe the realtor should be provided compensation of course. I was just curious if signing exclusivity agreements was the new norm. These were not off market. I found them.
1 Reply
Jeff Allen
Real Estate Broker · Omaha NE · Member since 2019 · 30 posts · 31 votes
2y
Quote from @Alysa Demetre:

Quote from @Samuel Diouf:

I mean if the realtor is providing you the value you need is it not worth it? The agreement is usually for them providing you off-market deals that they found themselves.

I believe the realtor should be provided compensation of course. I was just curious if signing exclusivity agreements was the new norm. These were not off market. I found them.

They will become the new norm. In most situations the seller is still agreeing to compensate the selling agent. This agreement covers the situation where the compensation may not be covered. As always in the past no closing= no compensation.
1 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
2y
Quote from @Alysa Demetre:

Hi, I'm looking at a a new realtor and he asked me to sign an exclusivity agreement and in it compensation to the brokerage is $350 and 3% with a minimum of $3500. He states it's because of that new lawsuit with the seller's fees. Is signing this agreement the case with all realtors in Ohio now? Just curious if this will be the new norm. I'm an out of state investor. Haven't done it with past realtors but also that was before the lawsuit.

In real estate there is never going to be something that all Realtors do. It is, and always has been, a case by case basis of negotiation between you and a particular agent.
1 Reply
Alysa Demetre
OP
Sacramento, CA · Member since 2020 · 6 posts · 3 votes
2y
Quote from @Jeff Allen:

Quote from @Alysa Demetre:

Quote from @Samuel Diouf:

I mean if the realtor is providing you the value you need is it not worth it? The agreement is usually for them providing you off-market deals that they found themselves.

I believe the realtor should be provided compensation of course. I was just curious if signing exclusivity agreements was the new norm. These were not off market. I found them.

They will become the new norm. In most situations the seller is still agreeing to compensate the selling agent. This agreement covers the situation where the compensation may not be covered. As always in the past no closing= no compensation.

Yes definitely!
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Id be shocked if you found a knowledgeable Realtor anywhere in the country who will work without a buyer agency agreement while we are all in the middle of class action lawsuits
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Trent Dues
Title Representative · Pittsburgh, PA · Member since 2023 · 82 posts · 51 votes
2y
The exclusivity agreements are popping up more and more as the market is struggling, and agencies losing business with the limited buyer pool right now. But, keep in mind, the agents 3% commission is coming out of seller proceeds. You as the buyer have access to the agent and their knowledge and hands-on in the area experience and at the end of the transaction, you're only paying them $350 out of your pocket
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
2y
Quote from @Trent Dues:

The exclusivity agreements are popping up more and more as the market is struggling, and agencies losing business with the limited buyer pool right now. But, keep in mind, the agents 3% commission is coming out of seller proceeds. You as the buyer have access to the agent and their knowledge and hands-on in the area experience and at the end of the transaction, you're only paying them $350 out of your pocket

You have no idea that the seller and/or listing agent is paying 3% to the buyer's broker. Every listing is different. That's the point of the buyer's broker having an agreement like this with their buyer clients.
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