Is it lawful for a listing agent to refuse to show me the house until I sign a Buyers Exclusive on that property with him?

Asked by Alexandra Falk, Laguna Beach, CA Mon Jan 28, 2013

I recently saw a foreclosure on the market. I contacted the listing agent to show it to me, since I am not working with an agent. he told me I had to sign a Buyers Exclusive with him on that property before he would unlock the door. He also stated in the contract that I as a buyer owe 2.5 % commission if I dont use him. I intended on using him, but now I dont want to. But, I feel that if I use someone else, he will not submit my offer to the bank, or make sure I dont get the property. help!

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18
John Sacktig’s answer
John Sacktig, Agent, New Jersey, NJ
Mon Jan 28, 2013
Alexandra,
I am not defending this agent if this was truly was stated to you as above, but I do think that sometimes people write things down with some creative flair at times… That being said, I cannot imagine in today’s litigious and so god awfully politically correct world that an agent would jeopardize his/her license to get both sides of a foreclosure property and I seriously doubt the conversation transpired as stated.

I am not by any means a supporter of exclusive buyers agreements.. I think they are bad business. But, that being said, in this particular case I can see that the agent may be just protecting his interest in getting the deal done on this property properly, and as you state, he said only wanted it on “that property".

What happens sometimes on short sales and foreclosures is that people do not truly understand that it can be 3 weeks or 9 months to get the deal done. Sometimes these people leave the agent that made the original offer thinking that maybe another can get it done faster. ..and then THAT GUY looks to get paid. So, he may just be protecting what he is getting involved in, although I would not have this signed, maybe he has been burned before by a buyer client.

Regarding all this other stuff about dual agents and getting your “own” agent.. in this particular case you just may be better off dealing with the listing agent, if he knows what he is doing you should be fine. There is absolutely nothing that another agent will be able to do to get you a better price or more information. Absolutely no benefit in going to another agent on this foreclosure property.

Regarding YOU owing 2.5% if you do not use him.. yup, it is a typical buyers agency agreement just making sure you stay with this agent on this particular house. if you try to jump ship and buy this property with another agent, he would get paid the 2.5% that your “new” agent would think they were getting..

I say go with it.. talk to the listing agent in detail and really understand what is transipring.
1 vote
Mack McCoy, Agent, Seattle, WA
Mon Jan 28, 2013
I think you have misunderstood something, Alexandra. The listing agreement is between the seller and the broker, and they can't commit the buyer to paying a commission unless the buyer uses the seller's broker.

It is certainly possible that there is a short-sale negotiator's fee that the buyer would have to pay, but it wouldn't matter whether the buyer had their own agent or not.

However, I think you got the gist of what the agent was saying, which is - use me or I'll misbehave.

Since you are in California, I bet you haven't really seen enough of the available inventory to cast your fate to this deal, especially given that with short sales - the list price is often set ridiculously low to generate a lot of offers.

Get your own agent, and make sure they are honest, knowledgeable, and experienced with short sales.
1 vote
Donna Antonu…, , Hoboken, NJ
Mon Jan 28, 2013
In nj it's lawful. Agents can work with you in NJ WITHOUT such an agreement but then they may end up doing lots of leg work and due diligence for you without a commitment. That is, if they are working with you without this contract in place there is nothin precluding you from writing the actual contract with another agent. Ie you would owe the agent who did all the work nothing. At the same time, you don't have to sign the buyers agency agreement and you can go out and find another agent who is willing to work with you under a transaction brokerage arrangement.

Perhaps the issue is he amount of the commission. Short sales can be an extreme amount of work and since they are subject to bank approval ie the seller is going to ask the bank to pay the commission, the bank often refuses to pay the commission offered by the seller at the time the listing was listed. So the agent could end up doing literally 10 times the work and get a pittance for it from the bank.

It is his prerogative to refuse to show it unless you sign a buyers agency agreement but you can try to find someone else who will show you taking he risk that they will get paid what the listing is offering.

A transaction broker ie one who works without this contact in place is NOT responsible for do diligence at least in NJ. There is an underlying presumption that you, the buyer, are doing you own due diligence. If you ask a question the agent has to facilitate getting an answer but is not responsible for proactively traipsing issues you should consider.

A buyer's agency agreement does not guarantee different results but what it gives you is recourse. A buyer's agency agreement is essentially a retainer. Just like when you hire a lawyer with a retainer the agent now has an explicit fiduciary responsibility to advocate on your behalf ie proactively help you with due diligence.

It's much easier and more successful to sue a realtor with whom you have a buyer's agency agreement the. If you don't. At the se time when you hire someone you, the buyer, have to make a commitment that the agent is paid and paid at an agreed upon rate. This is the main reason why I see resistance from consumers.

That's how it works in NJ
1 vote
Christopher…, Agent, Edgewater Park, NJ
Mon Jan 28, 2013
If your purchase is in NJ, short answer...I would advise you walk away from this agent.

As to the breath of your question, Michael Klein, a very successful agent in Hoboken is correct. Although some agents only work with signed buyer agreements, the norm is that the buyers and sellers agents split the commission in a predetermined manner; not involving the buyer. What this agent should actually do is ask you if you are working with another agent. If not, they MUST declare themselves a dual agent meaning, if they are going to work with you, they have a fiduciary responsibility to you and the seller and cannot share information or "secrets" between. This must be declared as soon as you meet them AND be in writing.

Further, an agent is mandated to submit an offer to the seller, in writing within 24 hours of that offer being made. Of course you run the risk of the offer not being submitted so I would identify a TOP agent in the town your buying have them represent you on the property.
1 vote
Michael Klein, Agent, Hoboken, NJ
Mon Jan 28, 2013
There are certain agencies that require the buyer to sign a buyer agreement...but there are others that do not. usually the purpose of the buyer agreement is that you are stating that you will buy a home through them and that if the seller is not willing to pay compensation to a buyers agent that you will pay the agent to find you a home.....You should be able to find plenty of agnets taht do not work under this capacity
1 vote
Annette Law…, Agent, Palm Harbor, FL
Wed May 28, 2014
This is how it should be.
Professionals should ALWAYS make certain their (potential) client FULLY understands the role the agent fulfills and the expected compensation as well as it's source.

Alexandra reaction and expectation suggests there are a lot of non-professionals representing buyers and sellers.

"Wing'n it' culminates in the "Can I compel my agent to give me a kick back from received commission 'cause I don't think they worked very hard?"

If you start correctly, you outcome is better.

Lets be clear. Every listing agent has an agreement with the home owner that only Qualified buyers will be touring the home. That means the listing agent has the RESPONSIBILITY to refuse entry to unqualified buyers.

No money. No pre-approval. No means. NO WAY!
0 votes
Michalle Far…, Agent, Norcross, GA
Wed May 28, 2014
If the listing agent is working Exclusive for the Seller, then the agent may show the home to buyers. Many offices do not allow Duel Agency. Duel Agency is representation of both the Seller and Buyer. Therefore the Listing Agent should advise you to come view the home with your agent. When the home is listed......the listing commission covers both the Listing Agent and the Buying(Selling) Agent. If you have signed a contract or have a Selling Agent in mind...preferably you should have that agent show the home to you ! There could be a commission or retainer due to the Selling Agent if you sign a Purchase and Sale with a Listing Agent without the agent, so be careful. The person who shows the home and prepares the contract is the "Procuring" cause of the sale. If the Listing Agent shows you the home, then they are the "Procuring Cause" of the sale. As a Buyer if you plan to have a Buying(Selling ) agent Refer you to homes, do research on homes, then you should also be patient to allow them to show you homes. If your agent is unavailable, then the Listing Agent can still show the home to you. Keep in mind that the Listing agent could reduce the commission paid to the Selling Agent which could be stated in the listing if they showed it, or the Listing Agent could prepare the contract for you as a Customer receiving full commission. It is better to have a Selling agent represent you in the sale. The commission is set upfront regardless of "Lower" offer....so don't think because you want to negotiate a lower offer that you are reducing commission. Commission is agreed upfront on a listing and is to be paid regardless of the Purchase Price Offer. Also ......the Selling Agent represents you as "Client" just as the Listing Agent represents seller as "Client" which is much better than being a Customer. As a Customer......you are left to guide yourself through the "Market Value" "Seller disclosure"."Inspection"...."Appraisal" , Hud Settlement Statement, HOA dues.........That is a lot to handle being a "First Time Home buyer if you are!" Also......why would you think the seller is your "Friend" in a transaction? There may be some hidden defects like repairs that you would not catch unless you have the right Buyers Agent to point them out and advise you to get a home inspection.....and not just any simple home inspection....."Radon tests, leak tests, etc" varies per home. In the state of Georgia...metro Atlanta Area.......call me if you need a Buyers Agent!
0 votes
Christy Dege…, Agent, Hoboken, NJ
Fri Mar 14, 2014
Hi Alexandra,

So you contacted the realtor, he showed you the property, and you want to make an offer but you don't want to make the offer through him? What happened to make you not want to use him?

I think he just has people sign the agreement so he doesn't waste his time showing them the property and then have them say, "Oh it's a great property, let me tell my realtor to draw up the contracts." He's just protecting his time.

The thing is since you signed that you would go through him, you will have a difficult time getting another agent to submit your offer since they aren't really entitled to any commission since they didn't show you the property.

If you do find another agent to submit your offer and the bank accepts, the agent can sue you for 2.5% since you agreed to let him be your agent. So the choice is yours, pay another agent extra commission, or just work with him.

You didn't tell us why you don't want to work with him. If it's something unethical you should tell his broker and he might let you work with another agent in that office.
Insider tip-Make sure he's not the broker!

Anyway, good luck!
0 votes
Paul Howard, Agent, Cherry Hill, NJ
Mon Sep 2, 2013
If you haven't already agreed to the listing agent's terms (or if you did and don't buy that house) find your own agent - one that doesn't run the risk of putting you in a dual agent situation. You can find one by contacting the National Association of Exclusive Buyer Agents (NAEBA http://www.naeba.org) and asking for a referral. Members of NAEBA only work for buyers.

Good Luck
0 votes
Paul, still beating that dead horse, eh? question was asked 8 months ago... little late to the party.
Flag Mon Sep 2, 2013
Jose Martinez, Agent, Hoboken, NJ
Thu Aug 15, 2013
Yes you can call his Broker. I suggest you call me, and i can connect you with the right person to get you Home.

Call me I can walk you through it.



Jose Martinez
Sr. Mortgage Consultant
201-406-6983
NMLS 307342
0 votes
Kathleen Con…, Agent, Hoboken, NJ
Sat Apr 27, 2013
Hi Alexandra,
If you find you don't have a good rapport with an agent, any agent, you can find an agent that you will be able to work with effectively & they will submit your offer directly to the sellers Attorney with no problems. Good Luck!
0 votes
Jose Martinez, Agent, Hoboken, NJ
Sun Apr 14, 2013
Yes you can call his Broker. I suggest you call me, and i can connect you with the right person to get you Home.

Call me I can walk you through it.



Jose Martinez
Sr. Mortgage Consultant
201-406-6983
NMLS 307342
0 votes
Joanne Berna…, Agent, Northfield, NJ
Wed Jan 30, 2013
Call the broker he works for and tell him what you have stated here. He needs to know about this! If you misunderstood what he said, the broker will make sure he explains it COMPLETELY AND ACCURATELY!
0 votes
Diane Maxon, Agent, Jersey City, NJ
Tue Jan 29, 2013
The general rule is that the agent who first shows you the property gets the commission. He was only asking you to sign the agreement on that particular property correct? He does then have a right to collect a commission from you.

If you do work through someone else, he cannot legally withhold any written offer and likely he would let the sale go through with the amount of his commission as buyer's agent put in escrow subject to mediation after the sale closes.

Hope this helps.
0 votes
Karina Abad, Agent, Basking Ridge, NJ
Mon Jan 28, 2013
Hi Alexendra I would recommend that you work with your own real estate agent, and you can hire one without signing an exclusive agreement binding you to them for 6months and leaving you on the hook for the commission.

Your question is in the HOBOKEN NJ section so I am assuming you are purchasing a property in the state.
In NJ they (a realtor) cannot keep you from seeing a property nor can an agent refuse to present your offer. Other good advice/points below. But again I would recommend you work with another agent and they can show you any listed property.

Hope that helps you! Best of luck!
If your question is not related to a property in NJ I would suggest you seek the advice or a real estate agent in your state or speak to an attorney or even call your local real estate board or commission office.
0 votes
Alexandra Fa…, Home Buyer, Laguna Beach, CA
Mon Jan 28, 2013
He is the listing agent. he has the power. I feel like If I use someone else he will try to undermine me for not using him and make sure I dont get the property. Should I be concerned about this, or should I still try to work with him?
0 votes
Alexandra Fa…, Home Buyer, Laguna Beach, CA
Mon Jan 28, 2013
I am in the state of California
0 votes
Christopher…, Agent, Edgewater Park, NJ
Mon Jan 28, 2013
Which state are you inquiring about?
0 votes
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