Home Buying in Pittsburgh>Question Details

Jessica, Home Buyer in Pittsburgh, PA

when is a good time to sign an exclusive buyers agreement?

Asked by Jessica, Pittsburgh, PA Wed Mar 25, 2009

I amd a first time homebuyer and met with an agent who wanted me to sign an exclusive agreement upon first meeting. I declined and she therefore said she would not work with me. is this normal? Can't I sign the agreement once i get to know her or at least sign a non-exclusive agreement? I am looking in several different areas so having an exclusive agreement does not make sense to me, when the agent might not be familiar with all the areas I am interest in.

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Jessica
Thank you for asking this question. As you can see there is a wide variety of responses..

Do you think that if you decide not to work with an agent exclusively that they might treat you the same way? Meaning if a listing came on the market that matched your needs, which buyer would they call first? You? Or a buyer with whom they have agreed to work.?

The truth is that (speaking for California), the Buyer Broker Agreement does specify WHERE you are looking. If you think that you want a Realtor in EACH AREA, these areas must be far enough apart where that distinction makes sense. So you could have THREE agents working for you.

The other side of that question in my mind would be this: How do I find the best agent? Does the best agent (meaning an agent that is professional, dedicated, knows the market, knows how to negotiate the best deal for you) really need to SPECIALIZE in all three of your markets?

Let me put it another way. IMHO, a sharp Realtor knows what they know, and knows what they don't know, and knows the difference.

The BEST Realtor for you should be able to sit down with you, ask you about your wants and needs, help you put together a plan to find you your home. If there is not PLAN, then don't work with them. IMHO if they do not ask you for a commitment (I prefer written commitments...and remember, that agreement, if you read it, obligates BOTH OF YOU), then I would not work with them.

Good luck.
0 votes Thank Flag Link Wed Mar 25, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Every agent is different in how they run their business. I usually meet with my prospective buyers in my office and we "interview" each other. I don't use an exclusive agreement form, but I do let my clients know what my expectations are and ask them what theirs are. We have a verbal contract built on the trust I earn in that appointment and in the future interactions I have with them.
You said that you are looking in several different areas. If you keep meeting agents that require exclusive agreements, you could let them know that you will be exclusive to them for the specific areas that they specialize in.
Good luck.
Web Reference: http://LaHomeConnection.com
0 votes Thank Flag Link Wed Mar 25, 2009
I don't recommend using any agent who expects you to sign a buyer agreement upon first meeting them. Yes, our time is valuable, but both the agent and client need to establish a relationship to make sure the fit is right for both parties. Trust me, I've toted around buyers that I didn't want to continue working with! However, there comes a time when I need a commitment from someone I've been working with to know that they are serious about buying a home and working with me.

Just be honest with your agent about any concerns you have before committing yourself to them, and when you do, your agent will give you their all to keep the trust you've given them.
0 votes Thank Flag Link Wed Mar 25, 2009
Sue,

Glad to help. Well, he really can't leave an open house :-) "Breakfast" doesn't sound like a good excuse though, and office meetings are virtually always less important than showings. My speculation isn't worth much without knowing any of the people, but it's possible your personalities just clashed and he was avoiding you (consciously or unconsciously).

What I have done in that situation, in order to meet the client's needs, is pay a new agent to do the showing for me. In a big office there are usually plenty of agents new enough (or poor enough) to do that. I may even ask the listing agent to show the house, if I know the agent and she lives nearby. I have a tiered system of assistants so that I don't get caught like that too often. Most busy agents have something similar.

By the way, we shouldn't hog somebody else's question like this, even though it's tangentially on topic :-) You can email me through Trulia, or directly at jeff.bennett@pittsburghmoves.com.
0 votes Thank Flag Link Wed Mar 25, 2009
You don't have to sign ANY exclusive agreement until you want to. It's like marrying someone on the first date!

I never ask for it on the first appointment. In PA we must ask consumers to sign the "Consumer Notice" which EXPLAINS the various forms of agency to them, but that's it!

If any agent pushes you to sign an exclusive or threatens not to work with you, run in the opposite direction.

Now if she wants to you sign an agreement that you looked at that particular property with her (so she gets paid if she sells it to you), that's different.

You can also ask for a very short exclusive agency agreement: 1 day or 1 week or 1 month...

The key is don't sign anything that makes you uncomfortable. There are other agents out there who will understand and be patient with you.
0 votes Thank Flag Link Wed Mar 25, 2009
Thank you, Jeffrey, for the detail.
I'm just frustrate to find the house that meet my budget and needed. I understand that the realtors also have their life and family. It's just that every time on my day off, he always had something to do, such as office meeting, breakfast, house opening, etc. I have only 1 day off during a week and on Sunday he had an open house. I had to wait for him to finish open house to show me the house that I'm interested. I just suggest that to Jessica if you are going to sign the agreement, make sure you talk to several realtors to see if they are convenience for you.

Thanks again Jeffrey, your answer is really understandable.

Sue
0 votes Thank Flag Link Wed Mar 25, 2009
Sue,

I understand your frustration with scheduling houses. Most Realtors will make a good effort to arrange showings (it's how we make a living, after all), but there are three people's schedules involved: yours, the seller's and the agent's, and they don't always mesh well. Agents have many clients at the same time, and owe obligations to all of them. We also have our own lives, with families and other responsiblities. So scheduling can be tough at times, and we hope clients understand that.

You were right to leave the first agent, who pressured you to buy a house with foundation problems. The clients are the principals and decision-makers; if the agent wants the deal more than the principals, something is wrong :-) Agents should be committed to their client's interests, not to particular deals.

I'm not so sure your current agent is in the wrong. The agent is obligated by license law (and probably company policy) to get a BAA signed. The fact that some agents will ignore this and work without one doesn't make your agent dishonest for having you sign one.

When he said it "means nothing," what he probably meant was that it is not automatically enforced. If you switched agents at the last minute and bought a house the first agent showed you, the first agent's broker could potentially sue for the lost commission. Whether they actually do so depends on the broker and the situation (and, surely, the amount of the commission in dispute).

I'm assuming the condo bid you put in wasn't accepted, so that you are not under contract now and don't intend to buy any of the houses that agent showed you. In that case, if all you want to do is continue your search with another agent, you can surely do so. The way to do it depends on the brokerage.

At Coldwell Banker, we have the Buyer Service's Guarantee. It's important to recognize that the BAA is between the consumer (you) and the *broker*, not you and the agent. So you are bound to the broker -- not to any particular agent. At Coldwell Banker, you can just call the agent's broker and, within 24 hours, he will either resolve the issue or assign you another agent. If you want to terminate the entire agreement (and switch brokers), there is a procedure for that involving notice by certified letter -- but only after the time period expires.

That said, brokers aren't generally trying to "trap" people in agreements. In practice, most brokers will not enforce the BAA, even when they technically could, if you say you are dissatisfied and they're unable to resolve the dispute -- unless you leave in the middle of a transaction or buy one of the houses the agent showed you while under contract.

Good luck. Talk to the agent, call the broker if necessary, and I hope you can resolve this amicably.
0 votes Thank Flag Link Wed Mar 25, 2009
Jessica, You are the one interviewing and deciding who works with who.

When is a good time to sign an exclusive buyers agreement? When you decide it's a good time to sign.

Follow your instincts, Dunes
0 votes Thank Flag Link Wed Mar 25, 2009
I'm also first-time homebuyer. I think you should signed tha agreement for a day like other realtors suggested. I, myself, had signed one when I wanted to put a bid on a condo, and that realtor gave me the paper to sign it for 90 days and said that it's mean nothing. He wasn't going after me if I should to change to another realtor. I didn't buy any house yet, still house hunting. But let me tell you with my experience, the first one is tried to get me to buy any house eventhough after the inspection, we found out that there was a problem with the foundation. She still insisted that the house is good for me. That's really put me back. I never used her again. The second one from same brokerage, the one that I had him put a bid on the condo. He made me sign the contract for 90 days and said it's mean nothing. Now I'm stuck with him because I'm afraid to go to other realtor. Although, I have to said that he really good in knowing the property. The only thing that put me back was that I have to wait for his time to show the house since he had many open houses and that I found out later that I don't have to sign that Exclusive Buyer Agreement. He should be more honest about it. The buyer agent should be working for you. I should be the one who request the time of showing, not waiting for him to get off his business then show me the house. I have my work hour, too. Now I'm just waiting for the time to expired next month. Or can I write him a letter that I don't want to use him any more? What should I state in the letter?
0 votes Thank Flag Link Wed Mar 25, 2009
Hi Jessica,

Great questions and I do think you should get to know your agent and feel comfortable before committing exclusively to one agent on the first meeting. However, a good agent will be able to help you with any area you are looking for and you will get full effort when you make the committment. Working with one agent will be in your best interest in the long run and help you to compare all the homes you are interested in.

If I can help with any other questions or properties in the area please let me know. As a Realtor with Coldwell Banker I work in many different areas and can help you find the right property in any neighborhood you are interested in. To learn more about my areas of expertise please visit my website, http://www.pittsburghhomesite.com and best of luck with your search,it's a great time to buy.

Regards,
Liz Caplan
0 votes Thank Flag Link Wed Mar 25, 2009
In today's economic climate Realtors need to make sure they are making good business decisions. With that in mind, they have to qualify buyers and get as much assuance as possible that they will be paid for their efforts and that is why agents ask for an exclulsive buyer's Agreement. I personally do not and never have had a buyer sign one and I know other agents that read this are going to think I am crazy but it has worked for me.

Most sellers interview multiple agents before they list their house but buyers never seem to do this and I am not sure why. I have been interviewed by 1 couple that were buyers and to this day we are still friends and play raquetball together. I would interview 3 Realtors that hold designations as this shows that they have invested in their business to better serve their clients. As for looking in different areas, I show properties east, west, south and north of Pittsburgh.

Hope this helps a little.
0 votes Thank Flag Link Wed Mar 25, 2009
I understand wanting to get to know the agent before committing to them. (In fact, many agents also feel this way, not wanting to commit themselves until they know the client better!) However, license law requires a representation agreement, and agents who work without one are technically violating this provision. (There actually is a non-exclusive buyer agency form, but I've never heard of anyone using it.)

Luckily, there are easy ways around this difficulty. For instance, you can write the agreement for a single day. You are then obligated to that agent for the houses you see *that day*, but tomorrow you can go somewhere else. This is a good compromise -- it meets the legal requirements without really committing you to much.

I also completely understand the desire to work with agents who have deep knowledge of specific areas. However, looking in several different areas is a problem for many agents.

They're running a business, and it doesn't make business sense to spend lots of time with people who are unlikely to buy from them (especially when there is an extreme amount of driving involved). Agents are already working on "spec" -- nobody *has* to buy. We have all signed exclusive agency agreements with buyers who looked diligently for a month -- and then decided they didn't like anything they could afford, and just continued renting.

If a buyer is additionally working with other agents, the odds get long enough that many agents will move on. Don't take it personally! This economy has hit many agents hard, and they're forced to become more selective about which clients they take on.

Not all agents specialize geographically (for instance, me). That means I will take people to different areas sometimes. However, such agents cannot have the intimate neighborhood knowledge of an agent who lives and sells exclusively in a small area. If you value that very highly, you will either have to work with multiple agents, or decide on a area first, then work with a local specialist.

As I noted above, the Buyer's Agency Agreement is highly customizable. It is possible to have "exclusive" relationships with multiple agents if you write limits into the agreements. For instance, you could have an agreement with a South Hills agent that says "limited to South Hills" and another with a North Hills agent that says "limited to North Hills"). Of course, if you have multiple agents you should tell them all this up front, and not all agents will agree to work this way.

If you're not under extreme time pressure, I would suggest deciding on an area first, then working with a local specialist. To decide on an area, you could drive through it, talk to people you see outside, and attend lots of open houses. (Any local broker's front desk can tell you where all the open houses are.) Once you're pretty sure of the neighborhood you want, you can hire a local agent there.

If you want to see houses in other areas before you have an agent, you might try contacting the listing agent (through the number on the sign). Listing agents will often show their own listings without an agreement, especially higher-end ones. They get at least half-paid if you buy it, even if you use another agent. Some agents will not show even their own listings without an agreement, though.

Good luck! (And enjoy your first-time buyer tax credit.)
0 votes Thank Flag Link Wed Mar 25, 2009
Jessica,

What I would suggest doing is interviewing that agent and researching other agents you might be interested in working with. Find out what they can offer for you, what areas they're familiar with, and what areas they would be willing to show you properties in. I always recommend an Accredited Buyer Representative (ABR), a special type of agent that is trained especially to represent buyers. You might also want to ask an agent if they frequently work with first time homebuyers, and visit the agent's bio or profile page online. You can sign an agreement to see one house with an agent, or go out on one outing with that agent. You could suggest signing an agreement just for one day or one outing, and then if you feel comfortable with the agent, you could sign an agreement for longer term until you find the property you want to buy. I can understand why she wouldn't want to take you out without at least an agreement pertaining to properties shown on that day only, but it's not unreasonable to hold off from signing a longer term agreement until you're comfortable. Hope this helps; good luck!
0 votes Thank Flag Link Wed Mar 25, 2009
Jessica~
A disclosure of what agency is and what it means as far as representation is required at the first significant meeting.

The signing of the Exclusive Buyers Agreement is a safe guard for agents to ensure that the people their spending time with are serious about buying a home and therefore a good use of an agent's time. Many agents and their companies have policies relating to this, as well as ensuring homebuyers are pre-qualified before ever getting into the car to look at property.

So, the agreement is the formal recognition that you are hiring this agent to represent you! And in turn, the agent is agreeing to work diligently on your behalf.

Having said all that, I totally agree with your perspective as the consumer. Before I got my real estate license, I worked with an agent, and even though it was a good friend of mine, I was totally turned off by the contract. I felt trapped. So, as a result, I tend to have a much more lax policy with regard to the contract.

Call me old school, (and I'm not THAT old) but I prefer to get to know someone and to earn the business. If you like me, trust me, and feel you are receiving value from me, then you won't mind signing the agreement at the appropriate time. Have I been burned? Sure. But the ones that are with me to the end truly become great friends, and I would much prefer that. Life's too short to work with someone you don't like and that works both ways.

So, sign the agreement with an agent you feel comfortable with and that you feel will do the best job. I'm less concerned about whether they know a particular area, because if they are good, they'll do their homework and will do a great job for you regardless.

Good luck,
Stacy Carter
ERA United Realty
0 votes Thank Flag Link Wed Mar 25, 2009
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