As a buyer is it required in the state of MN to sign a contract with an agent for representation?

Asked by Jp, Minnesota Thu Jul 24, 2008

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Aaron Dickin…, Agent, Champlin, MN
Thu Jul 24, 2008
Minnesota doesn't require any contract to be signed per-se, but most of the time an agent gets compensated in a real estate transaction based upon the terms of a signed representation contract, so at the very least an agent is going to demand it be signed at the time the offer is written.

Some agents request it be signed early on so that they know that the time they are spending with you is actually going to be worth something... there are a lot of tire-kicking buyers out there right now! We work on commission, so we don't get paid anything for helping people that don't eventually buy something. A contract solidifies the commitment of the buyer and also of the agent!

State of Minnesota does have a mandatory Real Estate Agency Relationships in Minnesota form that agents have to go over with you at first substantive contact and they will request you sign that, but that is a disclosure form only. If an agent gets audited and doesn't have that form signed early in the relationship, they may get in trouble with the Department of Commerce.
Web Reference:  http://www.AaronSOLD.com
1 vote
Aaron Dickin…, Agent, Champlin, MN
Thu Sep 11, 2008
Thanks for that research report Sammy. I find that in my experience with Dual Agency transactions that there's no discernable difference on price or terms that the buyer and seller come to but that there is typically a lot smoother transaction due to the efficiencies of the communication & system. I love dual agency deals... they are typically my most headache-free transactions!
Web Reference:  http://www.AaronSOLD.com
0 votes
Sammy, Home Seller, Saint Louis Park, MN
Wed Sep 10, 2008
Oops, forgot to attach a link to the abstract...
0 votes
Sammy, Home Seller, Saint Louis Park, MN
Wed Sep 10, 2008
You might be interested in this dual agency study conducted by students at Cornell University.
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Thu Jul 24, 2008
Hi, Jp!
As an exclusive buyer agent, I am well acquainted with the importance of actually hiring an agent to represent you as opposed to just having an agent "show you a bunch of houses". This is a change from the way things used to always be done. Years ago, ALL agents worked for home sellers. As a result of litigation, agents are now required to disclose who represents who. And, now that there are EXCLUSIVE buyer agents, buyers can have an agent that acts in their best interests at all times. Other agents can't say that. Check out my website to see why that's of utmost importance to home buyers.
0 votes
Jennifer Kir…, Agent, Minneapolis, MN
Thu Jul 24, 2008
Hi JP,

Here is what the Agency Relationship Disclosure states, the form that Aaron mentions below:

"If you desire representation you must enter into a written contract, according to state law (a listing contract or a buyer representation contract). Until such time as you choose to enter into a written contract for representation, you will be treated as a customer and will not receive any representation from the broker or salesperson. The broker will be acting as a Facilitator...."

As a Facilitator, the agent owes no fiduciary duties to the customer, except confidentiality. Where as a Seller's Agent or Buyer's Agent would owe the duties of:

-loyalty
-obedience
-disclosure
-reasonable care
-accounting

Unless you enter into a signed contract for representaion, that agent owes you none of the above duties, and like state law says in the disclosure form, they are not "your agent".

So to answer your question, YES, if you want representaion, you are required by MN law to enter into a written contract with the agent of your choice.

If you would like to see these forms, let me know and I will email them to you!
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