Sign an exclusive buyers contract before putting an offer on a house? what?

Asked by Cgriff50, Hoboken, NJ Fri Aug 24, 2012

Ive worked with an agent for a few months now, and have found a house. As I'm preparing to put an offer on the house, this agent pressures me from nowhere, saying that I now must sign an exclusive buyers agreement before putting an offer in. Lays the whole guilt trip about needing to get paid. Any advice? I'm thinking about turning and running as this has never come up in any other conversation. Why would this agent choose to tell me to sign it this late in the game? thanks for reading

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23
Karina Abad, Agent, Hoboken, NJ
Sat Aug 25, 2012
BEST ANSWER
Hello Cgriff50 I would suggest you do not sign the buyers agency contract.
There is one large flaw with the agent presenting it to you now.
For a buyer agency contract to be legit and be upheld it must be introduced to the buyer at FIRST meeting BEFORE seeing houses.
This is the main reason why my office almost never uses buyer agency agreements because we'd have to have the client, who we have yet to know and prove ourselves with, commit to working with us.
If your agent has done a good job for you thus far then there is no reason why you couldn't move forward with an offer. Let them know it's too late for them to produce a buyers agency contract and you don't want one.
They should have no issue working with you. If they try to pressure you or scare you move on and work with someone else.
Best of luck!
2 votes
Alex, Home Buyer, Los Angeles, CA
Tue Aug 28, 2012
Our agent asked us to sign one before he would work with us, and he also made us show him we were pre-approved. At first this seemed weird, but we could later see it showed he is very professional and didn't want to waste his time, or ours. The good news is that, unlike other agents we have worked with in the past, once we showed him we were committed to him he worked overtime to find us the best house.
2 votes
Alex you are absolutely spot on. The agreement is not meant to scare or trick a client. When presented and explained properly before showing homes, it's extremely beneficial for both parties. The agent knows they will be rewarded for their hard work and the buyer knows they are top priority to that agent. Of course you should always be top priority but as I'm sure you can understand, there are a lot of clients who have no idea what they can afford or will ask an agent to show them a handful of properties and intentionally or unintentionally end up using another agent. Every home buyer deserves to be represented properly and every person expects to be paid for their hard work, especially when you give 110% to your clients.
Flag Thu Jul 2, 2015
Tania Patch, Agent, Hoboken, NJ
Mon Aug 27, 2012
I tend to play devil's advocate in alot of discussions and there is an angle here maybe not considered. He may have seen or experienced a situation only very recently that made him feel its something he needs to do from now on with the people he works with. Exclusive buyers agreements are not common in this area, but I have seen a number of hard working agents suddenly encounter a situation where they are not protected and having that signed would have protected them.

For example, you walk into an open house and decided you really like the property and want to put in an offer. Maybe it was something you didn't see with your agent because it was above the price range you had considered going to. The agent at the open house makes you feel as if you need to put in the offer through them and you don't realize you can call up your agent that you have been working with and have him represent you. You make an offer through the agent at the open house and now the agent that has worked for you for months is cut our even though they worked so hard for you and looked out for your interest.

I would just talk to him. It may not have happened to him, but to his coworker next to him and he is using that lesson to try and protect himself and his business. You can also adjust it to make both of you feel comfortable with what is written in it.
2 votes
Robert McGui…, Agent, Denver, CO
Sat Aug 25, 2012
Cgriff50,

The Buyer's Agency Agreement is the smartest thing you can sign with your trusted agent. It gives him the legal right to work as your exclusive agent and 'represent' you, negotiate for you, and point out any defects or concerns about the homes your are viewing. In Colorado you are not allowed to do any of those things and are limited in how much you can legally help your buyer without being sanctioned by the Real Estate Commission. Otherwise your agent is little more than a mute mediator between you and the seller and just shuffling papers back and forth with little or no professional input. Acting as what we call in Colorado a 'Transaction Broker' rather than an exclusive Buyer's Agent.

The problem is when agents don't explain that to you up front and have you sign the agreement early in your relationship. Preferably the initial buyer consultation. Some are afraid to bring it up because they do not know how to explain it correctly and think it sounds offensive. But it is certainly to your advantage to sign the Buyer Agency Agreement. The best part about it is that in almost all cases the seller is prepared to pay your agent the commission. You get all of the benefits mentioned and the seller pays for it. It just makes sense. Good success with your purchase.


Robert McGuire ASR
Broker/Consultant
Your Castle Real Estate
http://about.me/robertmcguire33
Direct - 303-669-1246
2 votes
Judi Monday,…, Agent, Green Valley, AZ
Sat Aug 25, 2012
Since you've been working with this agent for several months, I'm assuming you have established a level of trust with this person. I'd be honest with the agent and let her/him know that you are not comfortable with this document being produced this late in the game and see what happens.
2 votes
Mary Petti, Agent, Edison, NJ
Sat Aug 25, 2012
Not necessary but not a reason to run for the hills either.

I agree that this document should have been presented at your first meeting but if you have been working with the agent for a while and trust him/her, i see no reason not to sign it.

However, if the agent introduced you to the home, wrote the contract and it proceeds to closing, the agent will get paid no matter what.
2 votes
Andrew Tisel…, Agent, Clifton, NJ
Sat Aug 25, 2012
At Weichert realtors Where I used to work it is standard practice to have all buyers sign buyers agreement when making an offer. But it only it can pertain only to the house you are making an offer on.

Really if you been working with the agent for 2 months why wouldn't you sign it anyway?

Maybe the agent didn't explain to you that you can cancel anytime with written notice. an email will suffice.

In my opinion I think the buyers agreement is meaningless because I've seen agents with disputes win or lose disputes with out any bearing of the agreement. It all comes down to who told you about the house and who you really have been working with.
2 votes
Bill Eckler, Agent, Venice, FL
Sat Aug 25, 2012
What you need to address is, if this deal falls apart would you be willing to continue to work with this agent to find your new home? It's not necessary to read anything more into this.....You could also sign the document but amend the term of your committment to her......

Good luck,

Bill
2 votes
Dan Tabit, Agent, Issaquah, WA
Sat Aug 25, 2012
Cgriff,
Your agent has this backward, at least in my opinion. A buyer's agency agreement, if one is used should come very early on before showing all the homes and investing their time. If they are seriously worried about getting paid, they should write the offer and do whatever they can to get the deal accepted. If you get the house you are after, they will ge paid.
It sounds like this agent may be new and is confused and you may want to speak to their managing broker for some clarification.
2 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Tue Aug 28, 2012
Another way to look at it is this - - - this agent has invested his time and skills in helping you. Perhaps he is asking you to formalize what has been a "gentleman's agreement" up to now.

As an agent, I have been trained to ask for it to be signed at first meeting to protect myself. BUT, I do not feel comfortable doing that because I expect to earn a client's trust and loyalty.

If you are feeling this uncomfortable now, how would you have felt had he asked you at first meeting. It may be the way he is presenting it. But if he has earned your trust and loyalty, then reassure him of that.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
1 vote
Diane Glander, Agent, Spring Lake, NJ
Sun Aug 26, 2012
Please note that an exclusive buyers agency agreement is not required in NJ (as stated by an agent from NY!) You do not have to sign it now or ever!!! That kind of behavior is what gives all Realtors a bad name. A good agent will get paid when the deal is complete and it might take years for that to happen. If he/she is really good the client will stay with him/her. If not, at least you have the opportunity to walk away.

I don't know why an agent would present that to you at that point in your relationship. I would think if he/she was that insecure about your business, the form would be presented to you at the first meeting or so.

Plenty of agents use them. I prefer not to. If you like me, you work with me (and visa versa!) If not, who wants to work with someone they do not like, trust, etc????

As far as NJ goes, there are 3 main types of agency: buyers agency, sellers agency, and dual disclosed agency. The first time an agent meets a potential client, there is a Consumer Information Statement we are required to give out that explains each type of agency very clearly so that people know what to expect. If you never got it, now might be a good time to get one. I can email it to you, if you'd like. Just contact me via Trulia or my website below.
Web Reference:  http://www.dianeglander.com
1 vote
Thank you Diane, the way that you have explained it is how so many of our family and friends have. It is reassuring to hear it from another agent. Thank you for your time in responding.
Flag Sun Aug 26, 2012
David Leonard, Agent, Jersey City, NJ
Sat Aug 25, 2012
It's harmless. Your agent is a buyer's agent, not a transaction agent (and you really, really want that - a transaction broker/agent has no fiduciary duty to you - they don't have to look out for your interests), and it protects your agent from you buying the home from your nephew in Cape May who just got his license. It can be cancelled at any time, and can be introduced anytime during the process. It is true that if your agent has been working with you, introduced you (showed you) the house your agent will get paid regardless. The exclusive buyer's agency agreement does make it clear that you are not paying the agent, the seller is. If you're serious at all, you already have an attorney right? Contact your attorney if you have questions about it.
1 vote
Andres Garcia, Agent, Hoboken, NJ
Sat Aug 25, 2012
I can't say why the agent would be asking you to sign an buyer agency agreement now. However, if you have not signed a buyer agency agreement yet, this agent has been working with you as a transaction agent. There is no reason they can't continue to work with you in that capacity. Unless their office has some weird policy there is no reason they wouldn't get paid. Nearly all agents in Hoboken work as transaction agents for buyers.
Karina is correct. The agency relationship must be determined on your first meeting. At the first meeting with the agent you should be given a Consumer Information Statement (CIS) explaining the 4 ways you can be represented in NJ. It is at that time that the agency relationship should be determined, not after the fact.
I hope all this advise helps. Please do not hesitate to contact me with any additional questions or clarification.

Andres Garcia - Sales Associate, CDPE - RE/MAX Gold Coast Realty - 56 Newark Street - Hoboken, NJ 07030 - Direct: 201 795-5200 x340
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Aug 25, 2012
Rather than read the agent's mind, I'm wondering - why wouldn't you sign it?
1 vote
Well, this agent is quite abrasive, late to every meeting, speaks over clients when in conversation, gets upset over showing multiple houses because we should just pick one, has advised me against offering less than what a foreclosure was asking, and very clearly believes we should pay as close to the asking price as possible to avoid negotiations, upsetting the seller, or losing the house. It has just been quite the opposite of every experience I have heard of when buying a house and I wont sign it because Im to the point of not having this agent show any more houses. However, this agent did show me this house so of course commission is deserved and I gave the agent the opportunity to write the offer when the demand for the exclusive agreement was made.
Flag Sat Aug 25, 2012
Kathleen Con…, Agent, Hoboken, NJ
Sat Apr 27, 2013
Professional agents will understand what you are looking for, your timing, goals and budget. From there you work together as a Team. Guilt trips are not a sign of a professional agent Im sorry to say. If you believe this agent will work hard on your behalf I would have a honest discussion with them before running away. This should ease your concerns, one way or another.
Good luck!
0 votes
Jose Martinez, Agent, Hoboken, NJ
Sun Jan 27, 2013
Hi Cgriff50

You should feel like they are on your side, and not out for commission.


Call me I can help get you closed.

Let Coldwell Banker bring you Home!!


Jose Martinez
201-494-1973
0 votes
Mary Petti, Agent, Edison, NJ
Mon Aug 27, 2012
Cgriff,

Just wondering if you straightened out the situation and moved ahead with your purchase?

I certainly hope that this one little "glitch" didn't dissuade you from buying a home you love.

Let us know
0 votes
I have not figured out what I'm going to do just yet in regards to putting an offer on that house. This event was among many other issues, but was the last thing that has tipped the scale in the relationship.
Flag Mon Aug 27, 2012
allan erps,A…, Agent, Pearl River, NY
Sat Aug 25, 2012
Sign the Agreement as it is a requirement of the Department of State here. If you look it over carefully there is a termination clause if you wind up being dissatisfied(deal falls thru). In reality it is the best thing you can do & is mandatory for Agent to get signed here(actually should have been done on first or second visit).
0 votes
Cgriff50, Home Buyer, Hoboken, NJ
Sat Aug 25, 2012
Thank you very much for such an out pour of answers. This has really helped me decide where to go from here. Thank you for all of your time with responses as I now know where to go from here.
Have a blessed day!
0 votes
Don Tepper, Agent, Burke, VA
Sat Aug 25, 2012
It appears, from the previous answers, that practices vary depending on location and company. And there's a debate (part of which you can see below) about whether it's really necessary to do an exclusive buyers's contract at all.

What I'm used to is: (1) A buyer's contract (2) Signed very early in the process, when the buyer decides on an agent to work with. But, again, as you can see, practices and opinions vary.

I'm guessing that your agent didn't want to "bind" you to a general agreement, but only saw the need for one when you identified a house on which you wanted to make an offer. And that'd be OK. I do think it would have helped if that had been discussed up front--if the agent had told you early on: "I don't require a signed agreement at this point. But when it comes time to make an offer, then we'll sign the agreement applicable to the house you're interested in." That would have avoided the surprise you ran into.

As a practical matter, from your description--that you've been working with the agent for several months--it sounds as if the agent probably earned the commission on this transaction. If you agree, then there's no harm in signing. If you disagree--let's say you found the home completely on your own--then you might consider not signing.

One other factor, though: Whether you sign or not, the house won't be any less expensive without a buyer's agent involved. The seller has already signed a listing agreement with HIS agent regarding the amount of commission. If you're thinking that you can save some money without having your own agent involved, that's incorrect. So--with or without an agent, this one or a new one--the costs to the seller are going to be the same.

Hope that helps.
0 votes
Michael Klein, Agent, Hoboken, NJ
Sat Aug 25, 2012
What is a exclusive buyers agreement....it states that you are hiring that agent to find you a home and that if the seller wont pay him a commission you will pay him....Most agents in this area work as a transaction broker and do not require you to sign such an agreement. If that agent does only work in the context as a buyer's agent, that should have been disclosed to you up front. If you would like a little more detail about this or any assistance, please dont hesitate to contact me. Thanks and have a great day

Michael Klein
MK Group at Liberty Realty
Your Luxury Property Specialist

#1 Realtor in Hudson County MLS in 2011 out of approximately 3000 licensed agents

Only realtor in Hudson County to Reach Top Sales Award of Platinum since 2005 thru 2011

Office (201) 610 - 1010
Office Direct (201) 659 - 1143
Cell (201) 320 - 5371
Email: mklein@libertyrealestate.com
0 votes
Scott Hulen, , 64068
Sat Aug 25, 2012
In our state we represent the seller and the seller’s interest until the document is signed. If you are concerned about working with this agent in the future, make the agreement valid for this property. I will only show clients properties which sign the buyer’s agency agreement “meaning they signed the contract for at least one day of representation & for the properties we see that day”
0 votes
Cissy Isaac, Agent, Hoboken, NJ
Sat Aug 25, 2012
Did you find this home by yourself without the aid of your Realtor? Did you possibly attend an open house without this agent and speak exclusively with the selling agent? This would be the only reason (without knowing more) that I can think of as to why this agent wants an exclusive buyers agreement. We have, in this industry, what is called "procuring cause"...the agent who ultimately caused the buyer to purchase the home is the one that gets the commission. So, it could be that your agent is worried that he/she wasn't the procuring cause in this transaction.
Please don't sign the buyer's agreement at this stage in the game. If the seller's agent disputes your agent's claim and shows they are the procuring cause, you could be responsible for paying your agent commission.
Hope this helps.
0 votes
I do see what you're saying about that. My agent showed me the house, so I would assume that procured cause has been established, which is a large reason for my confusion. I will definitely not be signing it now that I know more from all of these answers. Thank you so much
Flag Sat Aug 25, 2012
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