Real Estate Agents... (buyer's agent, commission, contracts, Realtor)

[Steven McCurdy]

I want to start a thread on Agents from a slightly different angle. Yes, I am a Realtor, and this thread is NOT about self-promotion at all, but an honest attempt to clarify a few things to individuals to consider and discuss when it comes to working with an Agent. When you contact an Agent and they inquire whether you have already worked or are working with an Agent, they are only fulfilling there lawful duty as it pertains to the Laws of Agency. They are only looking out for your rights and other Agents' rights. When you ask for info and the Agent only shows you properties listed with there firm, sometimes the Agent is forced by company policy to PUSH that firms listings. I believe this is wrong, and I wouldnt work for a firm that had this mentality. But remember that the Agent works for the firm as an independent contractor, and they may not have the option to veer from that policy. All Im saying is, I think it is bad policy, and I wont be a part of it, shortchanging a Buyer. But the Agent involved may feel the same way, but hasnt found a firm they can change to yet, so you as a Buyer may have to be a little understanding, but still firm in your belief, you want to see all properties available, and not just those listed with that particular firm. Now when it comes to Buyer's Agency, you DO NOT have to sign a written buyer's agency contract at first, ONLY when an offer is to be made is it required, but only IF the Agent is going to be your Buyer's agent at the time an offer is going to be presented. You do not have to sign the Working with Real Estate Agents brochure, it is not even a contract, it is an acknowledgement that the Agent has reviewed the types of Agency available for you in NC. It would be nice if you did, but to each his own. I will cover more topics as they progress, so if you have questions, please post them, and await my answers, and lets dialogue, Thanks.

[Steven McCurdy]

When you work with an Agent, the agent can work with you or for you. If the Agent works with you, he is acting as a Subagent of the Seller. When they work FOR you, the are employed as a Buyer's Agent, and act in your behalf. There are two types of Buyer's Agency available to you, Exclusive Representation and Non-Exclusive Representation. Exclusive Representation requires you to sign a written buyers agency CONTRACT, and you are supposed to work ONLY with that Agent. Non-Exclusive Representation is an ORAL CONTRACT that you agree to have to Agent work for you. Non-Exclusive Buyer's Representation means that you as a Buyer owe your loyalty to using that Agent, but since the agreement is NOT in writing, you are free to work with any Agent you desire to. Non Exclusive Representation does hurt an Agent, but under NC Real Estate Commission rules, we as Agents just have to live with the fact that you as a Buyer can LEGALLY use any Agent you want, because the Agent doesnt have anything in WRITING. If you sign an Exclusive Buyer's Representation Contract with me, for example, if I am not living up to expectations as an Agent, I will FREELY let you out of the contract, so you can find an Agent that suits your needs. Written Buyer's Agency contracts prevent unscrupulous Agents from stealing clients, but it still happens.

You as a buyer should be aware of your rights as to how you want the Agent to represent your interests, but dont feel bad if you desire NOT to sign a written contract for exclusive representation, because if I was a Buyer, I would not want to sign anything that would legaglly obligate me to someone who was a bad Agent. But remember, if you do put an offer in with an Agent acting in a Non-Exclusive capacity for you, it is the law that the Agency be in WRITING before the offer is presented to the Seller, or his Agent.

Some Agents will charge you a fee for any Buyer's Agency they perform for you. That will cost you monies whether you put in an offer to purchase or not. I, for example, will never charge a client a dime, I offer FREE BUYER'S REPRESENTATION, and that will save you money. Some Agents feel that they deserve a fee whether you buy or not, and demand in writing that fee, surcharge, etc... Why would you pay an Agent, when that Agent is going to make a commission off the sale of the home?

[Roselvr]

Originally Posted by Steven McCurdy

When you ask for info and the Agent only shows you properties listed with there firm, sometimes the Agent is forced by company policy to PUSH that firms listings. I believe this is wrong, and I wouldnt work for a firm that had this mentality. But remember that the Agent works for the firm as an independent contractor, and they may not have the option to veer from that policy. All Im saying is, I think it is bad policy, and I wont be a part of it, shortchanging a Buyer. But the Agent involved may feel the same way, but hasnt found a firm they can change to yet, so you as a Buyer may have to be a little understanding, but still firm in your belief, you want to see all properties available, and not just those listed with that particular firm.

One large company comes to mind and I feel that they are doing a large disservice to all of their customers - sellers because their listings usually are not picked up at other companies so that a buyer (that uses another company) doing their own research to buy a house, does not see this companies listings. For buyers, using their web site, you will only see their listings, making you feel like they are shoving them down your throat and that this company only cares about in house sales.

If this company doesn't "get with the times" I do see the potential for a down slide. I'm already seeing it where I live, their signs are slowly fading in my area which used to be littered with them.

I've been looking for houses since February, it's the one web site I am not signed up at although I've been meaning to for the last few weeks.

[walidm]

Quite simply in NC, absent a buyer agency agreement all agents work for the seller; therefore, you should refrain from telling any agent anything you do not wish the seller to know, until you have hired an agent to represent your best interests.

[keeperk]

HI Steven McCurdy
I was for a short time, in a small town and new to real estate exposed to exactly what you mention. I would not know this other than shoppers would complain to me that the other brokers would not show them anything other than what the agent personally had listed, even if the house next door was listed with their own office. I would show anything they wanted to see. Hell man, I wanted to sell something. I didn't care what it was.
I opened my own office and had ONE listing to start. My inventory was everyone else's listings which I studied up on everyday. It was great for my business. I ended up getting expired listings because I was the ONLY broker in a year or two that had shown their house when it wasn't even mine. Sellers were like, who is that girl? We want her!

I used to work as a sellers or buyers agent as I was trained that way.
Really now, years later on my own, I don't work as either, other than an exception here and there due to family or someone actually asking for representation. Most of those we won't accept.

NM real estate agency law has changed. There are no more Oral Contracts which I like. Then no misunderstandings.

I can see charging for buyers agency if the buyer wants you to hunt down endlessley their hearts desire. They'll drain you dry and not buy anything. Screw that! Been down that road, it's timely and expensive.

I have the luxury in my office to know my customers inventory better than they do. I don't act as their agent nor for the buyer. I'm a full service transaction broker, then I don't have to worry about being bossed around by the seller who knows nothing about his own property nor the market. Having 100 listings in an office of 2, I can't spend all my time babysitting a seller if they want me to sell. It works, they leave me alone and trust me to get 'er sold. Which also frees me up to be 100% totally upfront with a shopper to decide on a purchase making an informed decision once I'm done with them.
I let the sellers know upfront how I handle buyers and what I disclose and vice versa. I give all the facts to buyer and seller to make their own informed decision what to do then let the chips fall where they may. If they want advice, I suggest a lawyer.
They buy, sell or don't, whatever. My sellers trust me to keep them out of hot water and buyers trust me as I'm not the sellers agent. I see myself as customer service and hopefully it pays off in the end.

Here in NM we can't disclose sellers bottom line price nor the buyers highest price, agent or not. I also like that too. Before that came into effect, when I was a sellers agent working for a developer, I would take that extra step with the buyer before they would blab, to explain NOT to disclose certain information to me, as they should see me As the seller, as if they were speaking to the seller. They trusted me, kept their mouth shut so they could trust me to fairly get the deal done.

I am in a pretty exclusive market and not the norm for most on these posts so I do have this luxury. I do find when I'm thrown into the real world of residential real estate, I have to think real hard how to handle it, agent or not. Out of the norm for me I either don't take the listing or will agree to agency.

Many brokers in my area in the bus. for 20-30 plus years were hard core sellers or buyers agents. Nothing else. They too I've found are changing their way of thinking and rethinking the standard MO. I've just done it that way because I like being straight on the table with both ends 100%. I can do that not worrying about who I'm working for.

[Roselvr]

Originally Posted by keeperk

Here in NM we can't disclose sellers bottom line price nor the buyers highest price, agent or not. I also like that too. Before that came into effect, when I was a sellers agent working for a developer, I would take that extra step with the buyer before they would blab, to explain NOT to disclose certain information to me, as they should see me As the seller, as if they were speaking to the seller. They trusted me, kept their mouth shut so they could trust me to fairly get the deal done.

Are you saying that even you don't know?

[WendyK]

Originally Posted by Roselvr

Are you saying that even you don't know?

I think most people don't know exactly what their bottom or top price is until it's presented in a written offer. As an agent, I don't even ask about that - I always tell them that I'll figure their approximate net proceeds when we get an offer and they can decide whether or not that's a figure they can live with. Regarding buyers, they're a little easier to "top" out when you know the max they qualify for, if they're getting a mortgage. But with cash or well qualified buyers with other assets, I don't always know how much they can spend. I've seen people who say they won't pay more than $250,000 spend up to $400,000 when the right house came along. Made it tough for me when my saved searches were only going up to $275,000 (as a cushion) and all of a sudden they found the perfect home priced at $400,000.

[shellytc]

Originally Posted by Steven McCurdy

When you work with an Agent, the agent can work with you or for you. If the Agent works with you, he is acting as a Subagent of the Seller. When they work FOR you, the are employed as a Buyer's Agent, and act in your behalf. There are two types of Buyer's Agency available to you, Exclusive Representation and Non-Exclusive Representation. Exclusive Representation requires you to sign a written buyers agency CONTRACT, and you are supposed to work ONLY with that Agent. Non-Exclusive Representation is an ORAL CONTRACT that you agree to have to Agent work for you. Non-Exclusive Buyer's Representation means that you as a Buyer owe your loyalty to using that Agent, but since the agreement is NOT in writing, you are free to work with any Agent you desire to. Non Exclusive Representation does hurt an Agent, but under NC Real Estate Commission rules, we as Agents just have to live with the fact that you as a Buyer can LEGALLY use any Agent you want, because the Agent doesnt have anything in WRITING. If you sign an Exclusive Buyer's Representation Contract with me, for example, if I am not living up to expectations as an Agent, I will FREELY let you out of the contract, so you can find an Agent that suits your needs. Written Buyer's Agency contracts prevent unscrupulous Agents from stealing clients, but it still happens.

You as a buyer should be aware of your rights as to how you want the Agent to represent your interests, but dont feel bad if you desire NOT to sign a written contract for exclusive representation, because if I was a Buyer, I would not want to sign anything that would legaglly obligate me to someone who was a bad Agent. But remember, if you do put an offer in with an Agent acting in a Non-Exclusive capacity for you, it is the law that the Agency be in WRITING before the offer is presented to the Seller, or his Agent.

Some Agents will charge you a fee for any Buyer's Agency they perform for you. That will cost you monies whether you put in an offer to purchase or not. I, for example, will never charge a client a dime, I offer FREE BUYER'S REPRESENTATION, and that will save you money. Some Agents feel that they deserve a fee whether you buy or not, and demand in writing that fee, surcharge, etc... Why would you pay an Agent, when that Agent is going to make a commission off the sale of the home?

Steven, this is a nice description of Agency in NC, but not all states are the same when it comes to agency. for instance, in your first paragraph you state if the agent works with you he is acting as a subagent. Not necessarily so here in VA. In fact, a lot of brokerages no longer allow you to work in a sub-agency role. for instance, I won't accept an agent working as a sub-agent to me. Too much liability. Here, you are automatically considered the buyers agent, unless it is noted differently. And you must accompany the Agency Disclosure with your offer to purchase. With or without a formal agreement.

I feel the best discussion of agency to the consumer is to advise then to find out the agency laws and rules in the state they are buying or selling in. Up front. Before you go out looking.

Shelly

[newtoallthis]

I had just started looking at properties and two weeks later I found one that I really liked and wished to purchase. In order to put in an offer, I had to sign an exclusive buyer agreement. The contract negotiations fell through and I am not interested in working with that agent, but I seem to be stuck in this agreement for 90 days, (something that was not previously disclosed to me). As a matter of fact at the hurried signing, only then was I given some pertinent information about dual agent etc, which I never got a chance to read. I feel like some information was withheld, the timing was wrong; that I should have been given this package beforehand to preview in order to be a fully informed participant (or was I just too naive?) I wish to terminate this agreement. How do I go about doing so and what are the legal ramifications that may be somehow hidden in this contract? Would I have to compensate the agent for the time he spend showing me places, (three times)? I could could just wait it out but that seems an awful inconvenience.

[MikeJaquish]

Steve McCurdy,

No agent can be forced to only show the company's listings. Avoiding that excuse is a matter of integrity and client service that the agent must establish within.
I think some agents fall into the trap of showing company listings because they get internal bonuses for selling them.

An agent who "cannot veer from that policy" is a weak, weak person and not fit to work in general brokerage.
If my company told me I had to show company listings first or exclusively, there would be quick references to depositing that policy in a region unlit by sunshine.
No brainer.
One of the blessings of working as an independent contractor: I have choices.
Of course, the person who refuses to engage the agent as a fiduciary should not expect the agent to perform as a fiduciary...

And:
Of course, no one can be compelled to sign "Working With Real Estate Agents."
We can discuss all day the merits of Exclusive Right to Represent Buyer agreements vs. Non-Exclusive vs. verbal agreement vs. no agreement. But, I think it is a foolish agent who proceeds further with a customer who refuses to sign WWREA after a conversation on agency.
Why go to the next step with someone when they either don't understand fundamentals, or won't offer enough trust to sign an acknowledgement of a conversation? Or both?
When I have had that refusal, I start over, define agency thoroughly, solicit questions, and finally ask for the signature again.
If I have to mark WWREA, "Mr. Doe preferred not to sign. 11/21/2007 MJ," I need to go find a prospective client, because Mr. Doe is not a prospect.