Buyer Brokerage Agreements? (real estate market, brokers, how much)

[blakeas]

Are these pretty standard? After going through the terms it seems REALLY restrictive. What happens if I just find a property myself? They still get a full 3% commission?

Are there other things to consider?

[George Chong]

In Georgia, an Exclusive Buyer's Brokers Agreement, you Agent will still get the full commission. If you are not comfortable with the agreement, check to see if your state offers a Non-Exclusive Buyer's Brokerage Agreement. It usually states that if you find the property on your own and you negotiate the entire deal yourself, then your Buyer's Agent is not eligible for the commission.

Don't forget, finding the property is just the start of the process. Your Agent will still have to negotiate the deal, any inspections items, protect you with finance and appraisal contingencies.

If you sign the agreement and don't like the performance of your Agent, you can always end the relationship in writing.

[IntownHomes247]

And remember, the agent is promising to do all the work for you up front and only gets paid at the end if there is a closing. Yes, if you find the property yourself, the agent still gets paid. If you plan to find the property yourself and don't really need an agent to help with negotiations or any other part of the process, then you may be able to go it alone. But if you want an agent to put in the work of finding properties for you, showing you the properties, helping you with negotiations, and seeing you through to the closing, then that agent has a right to get paid at the end (even if you decide to go out without them or search the internet and end up spotting the house you wind up with yourself).

[techugagrad]

Don't bother signing such an agreement. When I was looking for a house, I called up the listing agent for a house I was interested in. I also asked her to show me two or three other houses in the immediate neighborhood. On the very first day, she tried to get me to sign an EXCLUSIVE agreement. Of course, she didn't explain what it really was. If I remember correctly, it would have obligated me to pay her a commission on basically ANY house I bought within a certain time period, whether she showed it to me or not! Raw deal!

Luckily, I'm a lawyer, so I actually read things before I sign them. I refused to sign it, and ultimately went with a Realtor who didn't even ask me to sign such a thing. (She was much better than the first one in many respects.)

With the real estate market the way it is, you should just laugh at them and walk away. I'm sure there are many other Realtors who would help you without such an agreement.

Don't think the BBA protects you. The Buyer's agent is still paid by the seller and is working for a sale, so they never will fully have your interests in mind. The best you can hope for is to find a reasonably honest person who doesn't feel compelled to shove such an agreement at you. Obviously, if an agent shows you a house, he or she will be able to get a commission from the seller without a BBA. Now, the agent won't have an incentive to show you a FSBO without a BBA, but you can probably look into those yourself (generally FSBOs aren't worth looking into anyway because the owners have unreasonable expectations of how much their houses are worth).

[blakeas]

I know! I looked through the agreement and it was the most restrictive thing! I called her on it and she got pissed at me. I could not believe it...

[blakeas]

This day and age it is easy to do a search but I still cant set my self up on the MLS though. I wish there was a way I could do that.

[jln69]

Originally Posted by techugagrad

Don't bother signing such an agreement. When I was looking for a house, I called up the listing agent for a house I was interested in. I also asked her to show me two or three other houses in the immediate neighborhood. On the very first day, she tried to get me to sign an EXCLUSIVE agreement. Of course, she didn't explain what it really was. If I remember correctly, it would have obligated me to pay her a commission on basically ANY house I bought within a certain time period, whether she showed it to me or not! Raw deal!

Luckily, I'm a lawyer, so I actually read things before I sign them. I refused to sign it, and ultimately went with a Realtor who didn't even ask me to sign such a thing. (She was much better than the first one in many respects.)

With the real estate market the way it is, you should just laugh at them and walk away. I'm sure there are many other Realtors who would help you without such an agreement.

Don't think the BBA protects you. The Buyer's agent is still paid by the seller and is working for a sale, so they never will fully have your interests in mind. The best you can hope for is to find a reasonably honest person who doesn't feel compelled to shove such an agreement at you. Obviously, if an agent shows you a house, he or she will be able to get a commission from the seller without a BBA. Now, the agent won't have an incentive to show you a FSBO without a BBA, but you can probably look into those yourself (generally FSBOs aren't worth looking into anyway because the owners have unreasonable expectations of how much their houses are worth).

Wrong. Even if you're an attorney. Just because a buyers agent receives his/her commission from the Seller's Agent doesn't mean he or she isn't working for you. The buyers agent works for the buyer and the Seller's agent works for the Seller.

The buyers agent writes the contract in your best interest. Negotiates in your best interest whether it be the contract, inspections etc.

I would never ever call the listing agent on a property especially on new construction. His or her duties are to the Seller only. The only thing he/she is legally obligated to tell you is material fact about the property. The seller's agent wants to get the Seller the best price not the buyer and is not obligated to tell the buyer anything about the property other than material fact.

Also, did I mention that it doesn't cost a thing to have a buyers agent. So why wouldn't you. They are the experts on the area and neighborhoods.

[blakeas]

It costs the seller 3 percent and then the seller wont be able to negotiate as much. What do u mean it doesnt cost me a thing??

[Bullbear]

Originally Posted by blakeas

It costs the seller 3 percent and then the seller wont be able to negotiate as much. What do u mean it doesnt cost me a thing??

Normally the seller has already agreed to the commission amt, with or without a buyer's agent.

If you think you can do it solo go for it. But good luck getting reliable comparables, including off the book concessions. Also, amazingly, an agent who has seen thousands of properties and negotiated hundreds of deals occassionally has some worthwhile insight.

A few years ago I did a major house reno. Figured I could save money by NOT using a general contractor. HUGE mistake. HUGE.


PS: I am NOT in the real estate business, nor is anyone in my family.

[techugagrad]

Originally Posted by jln69

Wrong. Even if you're an attorney. Just because a buyers agent receives his/her commission from the Seller's Agent doesn't mean he or she isn't working for you. The buyers agent works for the buyer and the Seller's agent works for the Seller.

The buyers agent writes the contract in your best interest. Negotiates in your best interest whether it be the contract, inspections etc.

I would never ever call the listing agent on a property especially on new construction. His or her duties are to the Seller only. The only thing he/she is legally obligated to tell you is material fact about the property. The seller's agent wants to get the Seller the best price not the buyer and is not obligated to tell the buyer anything about the property other than material fact.

Also, did I mention that it doesn't cost a thing to have a buyers agent. So why wouldn't you. They are the experts on the area and neighborhoods.

I don't disagree that using a buyer's agent has advantages. However, I strongly disagree with signing a contract that obligates the buyer to pay a commission on any house within a time frame, whether or not the buyer's agent plays a role.

I maintain that the buyer's agent does not necessarily work for the buyer's best interests. How much money the buyer's agent gets is tied to how much the buyer pays. Thus, there is a financial incentive for the buyer's agent not to get the best price for the buyer. Further, the buyer's agent has an incentive to rush the buyer along to buy a house, when it might be better to keep looking. This is irrespective of whether a BBA is signed - how do you prove that your agent doesn't act in your best interests?

At least when you deal with the seller's agent, you are likely to view them with suspicion. Caveat emptor. To get the best deal, buyers need to educate themselves about the market and get an independent home inspector (i.e., not recommended by the Realtor) to look over the property during the due diligence period.