Why do some real estate agents want you to sign an exclusivity agreement and others don't?

Asked by Maria S., Washington, DC Wed Sep 14, 2011

I met with an agent who wanted me to sign an exclusivity agreement, but I know that other agents don't require you to do this to work with them. Do all agents in DC require you to sign this agreement?

Help the community by answering this question:

+ web reference
Web reference:


Annette Law…, Agent, Palm Harbor, FL
Thu Sep 15, 2011
So you are interested in purchasing a home in the DC area.
Most likely you will consult with a real estate agent to determine what homes are available.
A well informed agent will inquire about your approved finances and explain the importance.
The agent will list your parameters and compile a list of available homes.
You will review with the agent these homes and identify the homes you would like to see.
The agent calls all necessary parties to set up a showing schedule that is convenient for you. In many cases the agent will preview a home to ensure it meets your requirements.
The agent may even transport you to each candidate home.
While looking at the home, your agent must be alert to protect your best interests by keeping the conversation with the listing agent or owner focused on the home.
Should you find a home in which you have interest, the agent will write a purchase offer to present to the listing agent.
The listing agent presents your offer to the owner.
Your agent obtains important documents such as HOA, association financials, for your review and approval.
Your agent engages in a multi-staged negotiation process to get you the very best price and terms for your purchase.
Your agent keeps track of appraisal, inspection and possible repair activity.
Your agent keeps tabs on funding progress, move-out activity, and keeps every thing moving towards a clean closing.
At the closing table, you get the keys to your home and will only be aware of 1/10 of the activity that has taken place. That is what a pro does, makes it look easy.

As you can see, working with a home buyer requires six times as much time as working with a seller. Only one in five buyers are actually able to close on a home. That means even with the full commitment of the buyer four out of five fail to close due to many complex issues. That number would very likely double if one made a habit of working the buyers who indicate they are not committed to finding a home.

So, why are you reluctant to sign an exclusivity agreement when the agent is making a huge commitment to you? Can you reference any professional in any trade who would extends such extensive service without a agreement? Are you actually intending to work with multiple agents? In your personal life, when you you extend your resources to such a degree without some assurance of the outcome?

Please share your thought process?
2 votes
Don Tepper, Agent, Burke, VA
Wed Sep 14, 2011
In the Washington area, most want it; many require it. But some don't.

Why do some want an exclusivity agreement? Because they're tired of spending weeks or months working with a buyer, only to have the buyer go out on his/her own and buy a property from the listing agent. Or--and this happens surprisingly often--calling up another agent to ask about a property "Because I didn't want to both my agent." Or deciding to use a relative, or a friend, to make an offer so that the relative or friend will receive the commission.

I understand your question (and perhaps your reluctance). So here's what you do: Keep the time period relatively short--maybe 3 months. And put something into the agreement saying that if you, the buyer, want to be released from the agreement, the agent agrees to release you. Frankly, most will in any case; they know it's not productive to work with a buyer who wants out of the agreement. But for your peace of mind, put something like that into the agreement. Then, if it isn't working out, you can get out of the agreement quickly and cleanly.

Hope that helps.
1 vote
Phil Rotondo, Agent, Melbourne, FL
Wed Sep 14, 2011
Some agents want you to agree in writing that if they show you a property,(etc.,etc.,) they would like to be paid for their work if you actually purchase the property.
Some agents would like you to "shake on it".
Some agents don't mention anything at all and either hope or know you'll be loyal.
Web Reference:  http://www.321property.com
1 vote
Tim Moore, Agent, Kitty Hawk, NC
Wed Sep 14, 2011
It is optional and usually for buyers. I have never asked anyone to sign them, I feel they are a way to lock a buyer into an agent so the agent does not have to worry about providing super service. I tell buyers they can use me or leave me if I don't provide you with service you feel you deserve. Other agents require a buyer to sign them and I am not sure why they sign.

That's my opinion, I am sure we will hear the one about they will provide better service if the buyer signs, but it is totally optional.
1 vote
Jolie Muss, , Upper West Side, New York, NY
Sat Sep 17, 2011
I'm not familiar with how it's done in DC but Buyer's Brokers usually ask for one so that they can devote themselves to helping their clients without wasting precious time and to avoid conflicts with listing agents. Also it's very useful if a buyer's rebate is involved as it makes everything clear and in that case it's usuusally the buyer who wants to sign and exclusive representation agreement (Please check my blogs on Trulia for links to the DOJ info about rebates)
Jolie Muss Licensed Real Estate Broker
Columbus Avenue New York, NY 10023
joliemuss@joliemuss.com Office 212 721-3301
Web Reference:  http://joliemuss.com
0 votes
Mack McCoy, Agent, Seattle, WA
Thu Sep 15, 2011
All agents do not require this, and as you see, the reasons vary.

Virtually every complain that clients have about real estate agents concerns communication. Ethics violations, bad behavior, incredibly (thankfully) rare. But, oh, the complaints - s/he kept showing me houses out of my range, didn't call me often enough, I had to find the houses because s/he would only search evenings, whatever!

Point being that with an agreement, you have a formal understanding of what each other's responsibilities and obligations are. I will tell you that for centuries, we have had exclusivity agreements with sellers, but only recently have we been doing this with buyers.

Aside from that, there is the problem of dual agency. Your agent represents you, but so does their Brokerage. If you elected to buy one of that Brokerage's listings, the Brokerage would probably be a dual agent, and if there's a problem in the transaction, attorneys really like to see how that possibility was explained to the buyer and seller before the transaction began. So buyer agreements almost always have some clause concerning potential dual-agency situations.

Oh, yes - one more thing - we do like to know how we're going to be paid. Typically, we rely on the co-brokerage on listed properties, but we'd like to know how we are to handle non-listed properties and how we are to be compensated if you buy one.

All the best, Maria!
0 votes
Tina Lam, Agent, San Jose, CA
Wed Sep 14, 2011
I never ask my clients to sign an exclusivity agreement since I believe the client should go with the best agent. Even without an exclusive arrangement, my clients stick with me for my integrity, market awareness, and quality service. For international investors, I do ask for exclusivity, for obvious reasons.
Web Reference:  http://www.archershomes.com
0 votes
Phil Rotondo, Agent, Melbourne, FL
Wed Sep 14, 2011
Some agents want you to agree in writing that if they show you a property,(etc.,etc.,) they would like to be paid for their work if you actually purchase the property.
Some agents would like you to "shake on it".
Some agents don't mention anything at all and either hope or know you'll be loyal.
Web Reference:  http://www.321property.com
0 votes
Christopher…, Agent, Tarrytown, NY
Wed Sep 14, 2011
I think an agent should provide superior service whether an agreement is in place or not. An exclusivity contract was created to protect the buyer and the agent and outline all the points they have mutually agreed upon. I think many don't use them because they are afraid the buyer will run, if explained properly the buyer should fully understand. I personally don't use them all the time and only had one instance where it really came in handy.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
Web Reference:  http://raveis.com/chrispagli
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more