Home Buying in Washington>Question Details

Buyer1113, Home Buyer in Washington, DC

A buyers agent agreement we have been asked to sign stipulates an additional fee above the commission %, is this common? and how high?

Asked by Buyer1113, Washington, DC Fri Nov 18, 2011

The contract also forbides the buyer from entering an open house. I have not approached the agent about adjusting the terms, as I would like to have a better sense of common practices in this market.

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Hi there,

In this area, commission on residential property is typically between 2% and 3%, more often on the 3% side, depending on what the listing agent and seller are offering. Anything over 3%, they are fishing for more money.

In DC it is a requirement by the DC Real Estate Commission that we must have clients sign a Buyer's Agreement at the first meeting after agreeing to work together. This is because commissions are regulated for residential agents and, back when the real estate craze was happening, a lot of brokerages got left twisting in the wind on commissions because their agent was actually the procuring cause (reason they bought the house), but because the Buyer's Agreement was not signed, and they were not paid the commission by the other side at the table, they had a lot of trouble getting the commission out of the Buyer. This is a CYA.

The Agreement actually protects both you and the Agent as a contract basically saying you will take care of each other - agent doing their job for you, you making sure they get paid. However, the contract is negotiable. On the blanks that are to be filled in with a monetary amount, I usually will write in 0% (zero), because I do not expect my Buyer clients to pay my commission. I have found that, while I will show clients any house they have an interest in, they have never even wanted to open negotiations on a property that was listed with no commission stated. Usually that situation involves a distressed property that would not be liveable. However, that line is there for those agents who do deal with those types of properties and need to make sure they will get paid for all their work.

As to the "administration fee" that some brokerages charge, for the most part, it is B.S. There are some offices who nickel and dime their agents to death so they may really need that admin fee to cover certain office costs, but from what I have seen, it is a charge to the client because they CAN charge it. My office does not charge an admin fee. Doing business costs what it costs and there is no need to charge a client more than what is being offered in the commission.

On the part of the contract saying you will not go to Open houses, I always mark through that paragraph. I WANT my clients to go to open houses! It makes my job easier if they want to go out and view homes without having to coordinate schedules with me. Two of my first clients found both their homes at open houses. They found the house on a Sunday afternoon, called me, we wrote a contract Sunday night and we had them under contract in less than a week. I always give my clients a stack of business cards so they can hand them to the agent at any open house they go to. It let's the agent know they are represented, keeps my client from being bothered by the agent and, if they like the house, the agent has my contact info. Easy Peasy!

What it comes down to is the Buyer's Agreement can be as complicated or simple as you want. You just have to talk to your agent and tell them what you don't agree to. If they won't budge from items you feel are important, then you probably won't like working with them anyway.

If you find yourself still shopping around for an agent, I would love the opportunity to interview for the job. My contact info is below. I am licensed in DC, MD and VA, so we can look wherever your interests take you.

Kelly Putz
Buyer's and Seller's REALTOR®
Keller Williams McLean
1 vote Thank Flag Link Fri Nov 18, 2011
Hello... The DC Buyer Agency agreement states the following regarding open houses:
Public Open Houses:
In the event Buyer elects to visit an open house without Buyer's Agent named above, the
Buyer agrees to notify party representing the Seller of this signed Buyer Agency agreement with Broker and Agent listed above.

You simply need to notify the agent at an open house that you are already represented.

Many brokerages charge an admin fee of $300-$600. This is usually the only fee listed in this agreement. The seller pays the commissions.

Hope this helps !
0 votes Thank Flag Link Mon Jan 5, 2015
Not really... why don't you ask your Realtor to justify the fee or tell him if he doesn't you will interview other local agents to determine your other options?
0 votes Thank Flag Link Sat Nov 19, 2011
Dear Home Buyer,
I am not sure what the regulations are in your real estate in terms of reimbursement for services received. Here in California and in most states sellers negotiate the commission with their real estate professionals who in turn decide the payment to the buyers (selling) broker. Many agents feel the need to present their buyers with a "buyer/broker agreement" because there is no payment for their time, money, expertise consultation and services until the successful completion of a transaction. There are too many buyers who work with professionals to gleam their expertise and knowledge and then go to the lowest bidder which isn't fair to the professional. So in order to protect themselves against these practices they ask clients to sign this agreement.

You are not obligated to sign the agreement as it is and free to work with another agent who doesn't require it. If you really like to work with this agent I encourage you to negotiate the terms of the agreement, such as possibly obligating yourself to work with this agent for only the properties shown by her/him versus tying yourself to the agent for any property you end up buying.

Remember that both parties need to agree to terms of an agreement. Don't be forced to sign something you don't agree to. Good luck and happy shopping.
Web Reference: http://akerstens.com
0 votes Thank Flag Link Fri Nov 18, 2011
Wow! Really? That seems a little ridiculous. I would never forbid my clients from going to open houses. I can;t dictate what my clients do on their spare moments. I usually give my clients a stack of business cards to hand to agents if they go to open houses so that the agent can contact me if they have questions regarding my clients. I have heard of agents charging a fee, but that is not something that is common practice from my knowledge. The seller pays a commission which pays the listing agent and buyers agent and its a fee negotiated in the listing contract. I think that the terms of your buyers agent contract are a little strict. If you are wanting to stick with your agent, I would negotiate some of the terms.
Good Luck
0 votes Thank Flag Link Fri Nov 18, 2011
What's the additional fee for?

Do you really want to work with someone that forbids you from visiting open houses?
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Fri Nov 18, 2011
In D.C. you do not pay commission unless the listing is written like that. I have never seen it.
The Seller traditionally pays commission.
How high is this fee? Many brokers now charge a few hundred dollars to offset their costs. Since a Buyer's agent makes no income unless you purchase, they can easily lose money if someone just wants to look.
If you are serious about a purchase, a Buyer's agent will steer you through what can be a dicey and complex process.
That is worth a few hundred bucks!
0 votes Thank Flag Link Fri Nov 18, 2011
I think what you are trying to say is that if they seller is not offering the commission your agent charges you, you will be responsible for the difference?

For example, the selling agent/broker/seller is offering a co-fee of 2.5%, but your contract says your buyer agent gets 3%, so you would be responsible for coming up with that additional .5%? Pretty common here & I must say, your buyer's agent should earn that .5% easily by negotiating you a fantastic deal.

Not sure about not attending open houses. Maybe they don't want you to say/do something that would lessen your negotiating power? This is definitely a question to ask directly to them.
Let us know how you make out!

The Marie Souza Team - Top Selling on Cape Cod
Cape Cod Real Estate Services
Phone: 508-790-2000
0 votes Thank Flag Link Fri Nov 18, 2011
There is 1 typical fee that the buyer is responsible for, and that is the Admin fee. This is charged by the brokerage house, and is usually between $300-600 dollars. In most cases, this is the only fee that you as the buyer should be responsible to pay. There are Realtors that charge the buyer the difference in commission. Example, if the contract says that the fee is 3% (Paid for by the Seller not the Buyer), and the property you wind up buying pays the agent 2.5%, you would then be responsible to pay the .5% difference. Most cases, a Realtor will accept as commission whatever the Seller is offering, provided its not really low and ridiculous like 1%.

The contract should absolutely NOT forbid you to goto an Open House. What the contract should say is that if you go to an Open House, make sure you let the agent holding the Open House know that you are currently working with an agent. This is to prevent what we call Procuring Cause, which in this instance would be that the Open House Agent would try to put a claim on the commission because they "showed" you the property.

You definitely have the right to go back and negotiate, and if its not going to work out, you may cancel the agreement in writing.

I hope that this information is helpful!

Hillary Nash McAuley
Nash Holdings Co.
Exit Elite Realty
0 votes Thank Flag Link Fri Nov 18, 2011
In DC, typically a seller pays all commissions. Some brokerages have Admin fees paid by buyers. We at DC Living DO NOT pass on such a fee to our clients. And I don't believe a buyer should be restricted from visiting open houses. Sounds like you need to have this agreement modified to suit you.
0 votes Thank Flag Link Fri Nov 18, 2011
The terms of the agreement are negotiable, therefore do have a discussion with your agent before signing...
0 votes Thank Flag Link Fri Nov 18, 2011
I agree with this. Just in case anyone needs to fill out real estate purchase contract. I found a blank form in this link http://goo.gl/NX4GbH. This site PDFfiller has several real estate forms that you might find useful.
Flag Mon Jan 5, 2015
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