Is it common to sign a buyer's contract with a real estate agent? Should the contract discuss money?

Asked by Stacy772, Canton, Baltimore, MD Mon Jun 4, 2012

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15
Wayne Curtis, Agent, Baltimore, MD
Mon Jun 4, 2012
Stacy,

Most brokerages in this region use a very similar Buyer Agency Agreement. The text may vary by a word here or a phrase there, but the vast majority of agents will present you with essentially the same agreement. The vast majority of commenters here have given you very similar advice... a fairly easy way to cancel if you're not happy with the service the agent is providing, a commission rate that is straightforward, clear, and likely to be covered by what the Seller has agreed to provide (and in this region the vast majority of listings offer either 2.5 or 3% to the buyer agent) are essential elements. But, the biggest reason for a buyer to sign one is simply this: it makes the agent accountable to look after your best interests and not the interests of the Seller. Most buyers want to "test drive" the agent for a short while to make sure they like working with him or her, but as your home search gets more serious and you start narrowing your field, it becomes more important to know that the agent is working FOR you, not just working WITH you. Big difference.

You're to be commended for doing your research. An informed buyer is one that is a joy to work with. ;)

--W
1 vote
June Piper-B…, Agent, Baltimore, MD
Mon Jun 4, 2012
Yes, this is common practice. The agreement is a Exclusive Buyer Agency agreement and is a contract between you and the agent. It protects you and your rights as well as the agents. It sets out your rights and obligations in the purchase process and it also sets out the agents rights and obligations and what the agent will do for you. This is also the agreement that sets out how the agent is to be paid. Real Estate agents are paid by commission only and unless they sell you a home they are working for free. The buyers agency agreement (ours does anyway) sets out what that commission will be and when it is earned and when it will be paid. The agreement also sets out the flat fee amount and when that is to be paid. It is to your advantage to contract with an agent through the process. The contract helps protect any confidential information that you may relay to the agent and also sets out the procedure you will follow. Any contract you sign can be cancelled at any time in writing if you are not happy with the service you are receiving. But, remember you may be responsible for a commission if you purchase a property that the agent showed you without him/her. That instance is called procuring cause.
Good luck.
June Piper-Brandon
Associate Broker
Century 21 New Millennium
1 vote
Sharon Slevin, Agent, Baltimore, MD
Mon Jun 4, 2012
I agree that a buyer broker agreement is common and protects both you and the agent. It also serves to clarify the relationship between you , the agent and the brokerage the agent works for. When you look at a property for sale, you need to be very clear about who is representing the interests of the seller, who wants to sell at the highest possible price, and the buyer agent who is representing your interests, in which you want to get the best possible deal at the lowest possible price..
It is to your advantage to commit to working with one agent throughout the home buying process. Your agent will understand your preferences, financial capabilities and timing requirements, as well as have the knowledge and expertise to guide you through the buying process. As a result he or she will use their knowledge of the local real estate market to guide you to the best possible properties that fit your needs in terms of size, price, location and amenities, saving you a lot of time and aggravation. Typically, the seller pays all commission related to the sale. The only circumstance in which you would pay a percentage of a commission to a buyer's agent is if you choose to purchase a home that is For Sale By Owner, negotaitebthe sale via your buyer's agent, and the seller refuses to compensate the agent for facilitating the sale. In this instance, you would be responsible for compensating the agent for 2.5% of the purchase price (typically).

We all work hard to educate, support and advocate for our buyers. Like any other job, we also like to be paid for the work we do!


Sharon Slevin-Chait
Prudential Homesale YWGC Realty

Sslevin@ywgcrealty.com
410-299-6627

Serving Inner Harbor Neighborhoods
1 vote
Asha Goel, Agent, Lutherville, MD
Fri Apr 12, 2013
Hi Stacy,

No you don't have to but we all work on commission and you will not get full attention of a realtor unless you make a commitment. I don't charge my buyers anything but there are some agent who do want retainer fee or in some cases if commission is not less than that agent will ask their buyers to pay the difference. You can always be firm and don't agree to pay anything. If your agent wants to have buyers agent agreement signed than make sure you discuss that if you are not happy with services than you can cancel that contract with 24 hrs notice.

Thank you,
Asha
0 votes
Akil Walker, Agent, Upper Marlboro, MD
Tue Jun 5, 2012
Hello Stacey,


It is mandatory for agents to have all buyers sign Understading Whom The Agent Represents. this is not a contract but ensures you understand your rights and representation.

It is common to sign a buyer agreement with the agent you decide to work with..yes. This ensures that you agree to work with one agent to assist you with your home buying needs. Some agents will work without it but it is not the norm. Given the effort and committment that takes from all parties written documentation is best to have.
0 votes
Mark Lee, Agent, Timonium, MD
Mon Jun 4, 2012
Excellent comments by everyone.

The Maryland Real Estate Commission has stated that without a buyer representation agreement, all a buyer's agent can do is locate and show properties to a buyer. Any negotiation has to be done with a buyer representation agreement. However, if you are a buyer who has chosen to not work with a buyer's agent, but, instead, wish to submit an offer through a listing agent who represents a seller, then you will not be signing a buyer representation agreement since that listing agent cannot represent you and the seller for residential real estate.

I give my buyers a trial period to make sure that they like working with me, for most people are leery of signing anything unless they obtain a high measure of confidence that you know what you're doing and have their interests at heart. I always immediately discuss the commission aspect so that they understand that there is nothing to hide.

Good luck!
0 votes
Judy London…, Agent, Lutherville, MD
Mon Jun 4, 2012
It is important for both the Buyer and Seller to understand Buyer's rights for representation and how Buyers and Sellers are represented by Agents and their role in the purchase/sale transaction. In Maryland, whether there is a signed Brokerage agreement or not, the agent is responsible for delivering the disclosure "Understanding Whom Agents Represent", prior to showing property.

The formal Buyer Broker Agreement, specifies services to be provided and how the agent is to be compensated. In most cases, compensation is paid by a listing agent from Sellers proceeds of sale. If no formal written agreement is signed, the agent is considered a "presumed" Buyer' agent, but the agent has no legal right for compensation if the Buyer wants to work with another agent to buy a property, the agent already showed..

Many agents will not show properties without a written Agreement. Without such an agreement, the Agent has no legal resource for receiving payment if the Buyer decides to do an end run, to either buy a FSBO or work with another agent, after the original agent has done all the work.

If the Buyer signs the Agreement but feels the agent is not doing their job, the Buyer can terminate the Agreement, as there is a termination provision in the Agreement. The Buyer benefits from representation and saves time. If the Broker has educated the Buyer about the market and exposed them to available properties, it is reasonable for them to expect compensation, if they have done their job. However, be aware, that before you submit an offer, whomever you work with as an agent, you will need to enter into a formal agreement that authorizes the agent to work on your behalf.

As for me, if a Buyer resistants signing an Agreement, I offer to show the Buyer 4 properties. After that, if the Buyer wants to continue working with me, I require them to sign a Buyer Brokerage Agreement. I think this is enough time to build rapport and trust. It seems reasonable to me that if I am commiting my time, a Buyer should be willing to commit exclusive representation to the agent as well.
0 votes
Jeanine Litt…, , Baltimore, MD
Mon Jun 4, 2012
It is common when you hire an agent, but via our program, you can work with an agent without signing any contracts initially. We just want you to find a home. Every broker is different, so if a contract discuss money or not I can not tell you.

Contact us for your new home 443-839-0289
http://www.BuyLikeRenting.com/lisintgs
0 votes
The Roskelly…, Agent, Gambrills, MD
Mon Jun 4, 2012
Hi Stacy,

Yes it is common. It should discuss any compensation including admin. fees that you would have to pay out of pocket. This contract is the agent's way of ensuring the time and effort they put into your home search earns them a paycheck.
0 votes
Robert Mcgee, Agent, Baltimore, MD
Mon Jun 4, 2012
I would be reluctant to sign a buyer agency agreement unless it has a cancellation provision. But the agent would still be entitled to a commission on any properties already shown, assuming the agent will work to bring it to closing. In terms of money the agent should receive the compensation paid by the seller as disclosed in the MLS listing plus any bonus offered by the seller. If it is an unlisted property the compensation would depend on the price. 2.5% is common except for low priced properties which are usually a flat fee, say $1,500-2000.

Bob McGee
Advance Realty Timonium
410-560-4574
0 votes
Marney Kirk, Agent, Towson, MD
Mon Jun 4, 2012
Hi Stacy!

It depends on the situation, but many agents work with buyer agency agreements. There are very specific agency laws and rules in Maryland, and those are discussed in documents that should be presented to you.

Buyer agency protects the buyer and the agency, and the buyer can know s/he has representation throughout the home search and home buying process.

Each agency agreement may be different, but in many cases, money is discussed.

I hope this helps!

Sincerely,
Marney Kirk
Keller Williams Excellence Realty
0 votes
Richard Iaro…, Agent, Gambrills, MD
Mon Jun 4, 2012
It's a very common document to use in Maryland. Christoper is right, it's nothing to fear. It basically defines both agent and buyer's roles and responsibilities in a transaction. There should be an easy way to exit too, if things don't work out.

Rich Iarossi
Long and Foster Real Estate, Inc.
443-995-9595 Cell
410-451-6255 Office
0 votes
Brent Kluge, Mortgage Broker Or Lender, Baltimore, MD
Mon Jun 4, 2012
Stacy,

There are varying opinions on this topic - however, one of the most successful agent/groups in Ocean City, for example, is Mark Fritchle Group. They regularly have a 24 cancellation clause in both their buyers and sellers contracts.

He says if you don't want to work with me, no worries. Must mean, I'm not doing my job.

I know a couple Canton agents who feel the same way - just give me a ring and I would be delighted to refer someone to you who may be a good fit, based on your needs.

Best,
b
0 votes
Bob Wiley, Agent, Baltimore, MD
Mon Jun 4, 2012
Yes and yes. My husband works exclusively with buyers and he expects the same in return with our buyers. You definitely need to know what fees you are responsible for and how the Realtor gets paid. We would love to meet you and share with you these things in greater detail. We live and work in the area. Thank you and looking forward to hearing from you.
0 votes
Christopher…, Agent, Tarrytown, NY
Mon Jun 4, 2012
Hi, It is common and if explained properly you will realize the agreement prootects you and the agent. I can only speak for myself, I put alot of time and energy into all of my clients and in return just want loyalty from them. Unfortunately there have been cases where buyers just disappear for various reasons. Everything in the agreement is mutually agreed upon by buyer and agent so there is nothing to fear. Typically, agents get compensated from the seller but there are times where they would need to get compensation from the buyer. This is something you discuss before signing so that everybody is clear.

Sincerely,

Christopher Pagli
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes
If the "buyers agreement" signed has the seller paying the commission the "buyers agent" represents interest of seller per Maryland law. A true "buyers agreement" buyers pay commission.
Flag Wed Apr 19, 2017
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