Question Details

Candy, Other/Just Looking in 08501

My realtor wants me to sign an agreement that I will pay her even if I buy a house from an owner directly.

Asked by Candy, 08501 Thu Dec 13, 2007

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Hi Candy,
Your Realtor is a professional; in other words, this is a job, not a hobby. She will likely spend a lot of
time helping you find the right home. You will benefit from her knowledge of the market, her access to
technology (MLS,etc.), her relationship with other Realtors (ie listings not yet on the market), etc, etc.
Should you then buy a home, I do not think it unfair for her to expect to be compensated, do you?
6 votes Thank Flag Link Thu Dec 13, 2007
It's not that unusual a request but everything depends on your relationship and AGREEMENTS with the realtor. If you have a written agreement (and some States like mine in Connecticut it is the law to have one with a Buyer, it's called Buyer Brokerage) to work together and the terms of that agreement state that no matter "how" the property was purchased, For Sale By Owner, family friend, etc...that the agent is due a commission and IF the commission is not paid by the Seller (which it usually is) then YOU the buyer are responsible for paying it...then guess what...YOU ARE!
Now, my question is have an agent to protect you, guide you, and advise you, in the real estate transaction, why not use their experience? Make sure that the property you want to buy is worth the price you are looking to pay - the agent can provide you with a CMA - Comapartive Market Analysis - on the property - it would be a grey day if you bought the house only to find out that you OVERPAID for it! They can also guide you through the negotiation, the closing, getting and securing financing, and on!
All of this is said, of course, without knowing the specifics of your situation. I hope this helps. You can get more information by going onto my website and then going into the "buyer references" section. good luck! Brad
4 votes Thank Flag Link Thu Dec 13, 2007
It is not uncommon for Realtors to ask for such an agreement. However, you can sign the agreement for the properties that you visit with your Realtor, meaning your Realtor would get compensated in case you buy a property that your Realtor showed you.
On another note, how about paying her on hourly basis for imparting her knowledge to you, and spending her time with you. Sort of like you pay when you go to a doctor or a lawyer.

Monika Kumar
The RealtyGeeks Team - we care
2 votes Thank Flag Link Thu Dec 13, 2007
I liked Dave and Sheila's answer the best, the first one.

Personally, ... I always try to get a buyer to sign a "Buyers Agency" agreement with me, which basically says that when and if they buy a home within the next 6 months...that they will use me as their Agent and that I will receive a basic set amount of be paid by the seller, but the form says that if the seller (in the case of FSBO's) does not pay a commission, then the buyer would do so. Its only fair when seen from our side of the fence. I work with some people for many weeks before finding the "right" home and have had times when I had to write up 5 or 6 offers when someone else beat us to the sale. Lots of time, paperwork, gas in the car and frustration to deal with. Who else would work at their job for a month, and then be told by their employeer (you, since you hired me) that they decided to not let me get paid? The Dept. of Labor and Industries would be all over it if we were employees, but we are not and must look out for ourselves. If someone will not sign the document I still work with them, its just more frustrating as time goes by. OH YES.... did you also know that many FSBO "For Sale by Owner" home owners will pay a commission if you or your Agent were to call and ask them. Its done every day, sellers really want to sell and many will pay the realitive small commission that is involved.

Ginger...., Your profile says you are just a Home Seller? Your record shows a LOT of activity on Trulia... lots of advice and so on. Are you a Realtor? You sound like one and from your level of advice..., you could be one if you are not already. Great answers...
2 votes Thank Flag Link Thu Dec 13, 2007
Who are you working for?

In some States, ALL Agents, unless "specifically disclosed otherwise", represents the seller in any transaction for the sale of a home. It is that Agent's fiduciary duty (where their loyalty lies) to protect the seller's position at all times. For those of us who have been around for a while, that is the way it has been done for years. Some states are now becoming Buyers Agency States, like Washington State.

Buyer's Agency, however, should be an option that is made available to you. Simply put, it allows the Agent with whom you are working to be your representative and to put your interests above all others. Is it necessary to have a Buyer's Agent? No. Thousands of home buyer's have been well served dealing with the seller's Agent. (For years, it was the only way it was done). The important thing is to understand your options, so that you don't unintentionally accept less representation than you want.

Here are a couple interesting FYI links: - Wikipedia is unbiased, just the facts.
By default, in both Virginia and DC, all real estate agents by law work for all sellers (even if the agents and sellers have never met before), and have a legal obligation to protect the interests of those sellers; they are considered “seller agents”, and the relationship that they have with the buyer is termed “seller agency”. - Wow..., Georgia "requires" such a document.
"While we are all used to the idea of a seller signing a written listing agreement with a real estate broker, the practice of written agreements between buyer and broker has been much less common. As of July 1, however, Georgia law mandates that a broker and buyer must have a written agreement before the broker can represent the buyer as a client."
Suffice it to say that a good agent will explain these things to a buyer in layman's terms. Its the buyers choice to sign an agreement or not, they will be signing plenty of them if they buy a home. Its also the Agent's choice to work with a client or not. I choose to work with all clients, weather they sign or not. I just like them to commit some loyalty to me if I am going to spend my time.
Warm regards to all,
1 vote Thank Flag Link Sun Dec 23, 2007
I happen to agree with is that possible?

I agree we are due a commission for our hours of work, gas, research etc..(sometimes many months) and sometimes a contract is necessary to insure that we are paid
(Much like crappy realtors that do not take good care of their clients, there are just as much consumers that "use" agents because they have no respect for the industry and then use Uncle Bob to write up the offer) So I think the Buyers/Brokers agreement is a good thing and has its place.

Now do I use it? Nope! I take the same road that Evis does. I'm pretty confident that I educate my clients about the process, put them before my bottom line and communicate so regularly that if they don't use me, it's their loss. More likely then not though I did not do my job properly. I must have forgot to ask if there is anyone in their family that is in real estate or presently getting their license. I can stike up many a conversation to get this kind of stuff out of them.

I have a perfect example just this last week. I was carting a couple around to see 18 homes in one day....not my record either; but during this power shopping day they told me they wanted to buy a house before Sunday so we were determined. After about 10 houses I found out that the Mrs's had just taken her test and was waiting for results. Ok, here comes the scary part....are you planning to write up the offer on the house you buy or will I? They hee hawed around and didn't answer my question and I just thought to myself...we'll just finish out the day and I'll mark this up as experience..."ask before you go out next time you ding a ling" I told myself. Obviously "Are you working with an agent?" didn't hit home when I asked it.

The next morning they called again and asked to meet on Saturday, they have 24 houses to see :-p
(they actually were really easy to unless they loved it, but even then, they were was kind of fun!)
I just went directly to the point about the delicate situation and the husband got on the phone and told me that "their original intention was to write up an offer themselves before they met me, and since our initial meeting, they decided they needed me, so they had no intention to use anyone but me." yeah!! We close in 2 weeks. We celebrated her getting her license with a nice lunch that they bought.

But guess what? I would have been disappointed if they didn't use me but the bottom line is that I didn't ask the right questions and if they were the "users" type, it would have just been my own fault for not clarifying things upfront. ok, don't get me wrong, its impossible to cover every base but giving them great service and exceeding their expectation usually covers the questions that didn't get asked.

We need to earn the consumers business and if they use us and throw us out, they are the ones that need to try and sleep at night because we will be sleeping just fine knowing we did the best job we could with the highest level of customer service.

I try and put myself on the consumers side and I wouldn't sign myself into an obligation like that; what if I didn't click with that agent after a couple times out or they just didn't get what I am looking for? It happens!
Web Reference:
1 vote Thank Flag Link Sun Dec 23, 2007
HI Candy - Aside from the obvious answer that you don't have to sign this agreement, you can also ask the agent to modify the agreement. She has presented you with what is probably a standard form for her realty office. Nothing precludes her from adding an exclusion clause stating that no commission is due if you buy a home that is not on the MLS. She might refuse, in which case you have a choice to make. But she might not mind including some changes. You won't know until you ask her.
1 vote Thank Flag Link Thu Dec 13, 2007
The agent just wants to know she is going to be taken care of if she puts all this time and effort info helping you find a home. And if you like her and she is experienced then it might be a good idea to have someone represents you buying a home. She may end up saving you allot of money in the long run.
0 votes Thank Flag Link Sun Dec 23, 2007
Brokers, just like lawyers, doctors and other professionals, are very strange that way. We like to get paid for the services we provide. I agree that if you happen to come across a FSBO, independent of your agent, in the first few weeks of the agreement, you may have a reason to talk to the broker about rebating a portion of his commission because you saved the broker a few hours and miles.

However, the Broker is agreeing to be legally bound, under the threat of criminal prosecution and financial penalty, to help you negotiate a fair and secure real estate transaction with your best interest as the only motivation. In return you agree to allow, not pay, the broker to collect a portion of the commission the seller has already agreed to pay his selling agent. Sounds like you are getting a pretty fair deal.

So you do not need to ask or expect your broker to work for free, you just need to make sure that the agreement between you and your broker, stipulates that the seller will pay the commission and that you are not obligated to do so. Then it is up to your broker to stipulate in the offer, that the seller will pay a commission to the selling broker for bringing the buyer.

The buyer broker relationship is not adversarial and is not a zero sum game. There is not a winner and looser. You are getting the services and experience of a professional, who is expecting to get compensated, by the seller, for providing you the variety of professional services that are required to negotiate a successful transaction.
Web Reference:
0 votes Thank Flag Link Sun Dec 23, 2007
There is a case in this USA Today article that the seller sold his house by himself and come back to pay his agent .5% to do paper work. So, if your agent disagree, you may forward this article to him or her. That is to say, if you find a better house and price and bought from owner directly, say, for sale by owner, that means it is effort of BOTH you and your agent, you may want your agent to do all the paper work thru.

On the other hand, your agent would be very glad to know your seller who may be BUYING a BIGGER HOME to move up after sold his house to you, and your agent may get more from him for bigger home.
0 votes Thank Flag Link Sun Dec 23, 2007
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