Home Buying in Iowa>Question Details

Shelly, Home Buyer in Iowa

How can I terminate my Buyer-Broker Agreement? We signed an agreement with a Real Estate Agent in December

Asked by Shelly, Iowa Wed Mar 4, 2009

2008 to assist us in locating a new house. The agent penciled in on the contract that the contract was thru 12/31/09 (which I now realize is a ridiculous amount of time). While my agent responds to my email requests for information within a few days, she has only called me once and the few houses that we've asked to see, she has sent her assistant to walk us through. So essentially we have not seen (in person) our agent since we signed the contract in December. On our own we located a piece of land and would like to build a house. The developers of the land will also build the home. They've eluded that they will give us a much reduced price if we come with no real estate agent. Since our agent didn't help us to find this land at all, I don't feel like she deserves a what will likely be a hefty commission. What recourse do we have to terminate our Agreement??

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It sounds as though your Buyers Agent has not fulfilled her end of the obligations, nor have you. In NC, the Buyers Agency Agreements state that you will go through your agent for all requests for information on any property. I understand your frustration with your agent although a good real estate agent is worth far more in a transaction that what you may save working with this unethical developer! I would be very leary of any developer or builder that eluded such a thing. Some builders are very desperate in this slow market and may cut corners if there isn't a professional to oversee the project!

My suggestion is to contact your Buyer Agents manager and discuss your disappointment. They may assign you another agent or release you from your agreement. Depending on your agreement, there may be a fee to terminate.

Regardless, I would suggest you have representation - a real estate agent or an attorney - to oversee your transaction. If you think the real estate agent fees are "hefty" - wait till you see the bill from the attorney!
0 votes Thank Flag Link Thu Mar 5, 2009
Shelly,

We are sorry about your situation. Our recommendation is to contact an attorney to have them review the document and advise you of the best course of action.

Any advice without the capacity to review this document would be purely speculative.

Good luck
0 votes Thank Flag Link Thu Mar 5, 2009
Shelly, you need to do exactly what the first poster says. Read the contract, talk to the agent and/or broker and then proceed. In our contracts in VA it specifically says that the agent needs to be available to show properties during regular business hours (whatever those are). The catch is that the contract is with the broker and not the specific agent. Although in practice we don't do it, in theory, someone else from our office could show the homes for us without violating the agreement. Again, I have only done this in rare circumstances; but it can be done. However, I am still going to encourage you to have an agent in the transaction. If it is not this one, then someone else. It is too rough of a market to be on your own, especially when building. I bet the builder wants to "hold" your deposit himself rather than it being in escrow. In this terrible market, builders are skipping town with deposits. What if the builder looses the land to foreclosure during the process? What recourse will you have? This is just ONE example of something that would be a concern. And please do not think that builders are immune. They are the hardest hit in this housing crisis - few loans are available to them, work is down, and in general, it is cheaper to buy resale than to build. They are going under every day.
0 votes Thank Flag Link Thu Mar 5, 2009
HI Shelly,
Every state agency agreement is different, so read yours carefully. The first step, I would think, is to have a discussion with the agent, asking to be released from the agreement. Be candid with her, and simply say that the agreement is simply not what you thought it would be and you want to move on. If necessary, also ask to speak to the broker. In my state, any release has to be in writing, and the broker has to sign it.

As to what the builder is saying, remember your grandmother's advice: If it sounds too good to be true, it usually is. I have found that in the majority of new home deals, it is really in the buyer's best interest to be represented- After all, the builder does this for a living, and understands and may even have his own sales agreement that is slanted in a seller's favor.

Hope this helps-
Krisan Mitchell
Accredited Buyer's Representative
Coldwell Banker All American
Raymore, MO
0 votes Thank Flag Link Wed Mar 4, 2009
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