Did this realtor screw me? (1 Viewer)

[Robert_Z]

I am trying to buy a house/condo. Last week, a realtor contacted me after I sent an e-mail to his company's web site. Then he came over to my house on Saturday so we could go look at some properties. Before we went, he asked me to sign a form.

Now, I am totally ignorant in house buying. The guy said he needed me to sign the paper before he could drive me around and show me houses. I told him I was not comfortable signing something I do not understand. He assured me it was not a big deal.

Well, I really want (need) to get into a house in the immediate future, so I signed, and off we went.

He was cool enough I guess. Yesterday, a friend of mine who bought a condo in December recommended another realtor. I called this realtor. He said he would be happy to help me; then asked if I had signed anything with another realtor. I said yes, but didn't know what exactly it was.

I learned that what I signed was a buyers representation agreement, stating that only this guy can represent me. No other realtors can help me.

Is this fair, to do this without explaining that I would not have access to other realtors? He did not tell me this. Although he seems to be working hard for me, I did not appreciate being hamstrung this way. I am thinking of cutting him loose. Am I being unreasonable to want to get rid of him? Do all realtors require this agreement form before they show properties?

 

[BrianB]

Do all realtors require this agreement form before they show properties?

In my experience, yes. It's the only way they can "guarantee" themselves the percentage of the sale - it's the proof that they initially showed you the house.

Was it fair how he presented it to you? No. We bought a house through a realtor just before Christmas - on the first day, we had to sign the "exclusive realtor" deal, but it was limited to 24 hours. Basically he limited it so that we could get a feel to see if we were comfortable working with him & vice versa. We liked him, so the next time we met, we signed a proper contract.

 

[Joe Szott]

Unfortunately, that is EXACTLY the way it works in real estate. It doesn't matter who you get as a realtor, they are all going to want you to sign that form. I would suggest however that you get a copy of it and read it as it probably discusses his compensation in there. If he is getting more than 3%, it could be considered misrepresentation (since he told you it was no big deal) and you can get out of it (have him tear it up.)

The thing is as soon as you go to the next realtor, he will ask for the same thing. They do this for their own protection. Imagine this scenario: the realtor shows you a house, you like it and the price. But then you bid on it yourself or through another realtor effectively cutting him out. So you used his house listing (that he must pay for) to find your dream home, then screwed him out of his 3%. That's why they do this.

Although other realtors won't work with you, if you found a house yourself and walked through it yourself and bid on it yourself, you would not have to use that realtor because he didn't do anyhting to help you find or price it. But then why have a realtor if you can/will do it all yourself?

I suggest staying with him if you like him, but review exactly what you signed up for. The only other option I would suggest is to find a Buyer's Broker in your area. Realtors always work for the sellers (no matter what they tell you), a Buyer's Broker is legally bound to only work for buyers (they don't sell any houses or property, just help people buy.) It even goes so far that a realtor working for you will tell the seller exactly how high you will go, effectively screwing you out of any bargaining power.

Check out Buyer's Brokers on google for your area, it's a smart move...

 

[Chris Lockwood]

This must depend on the state you're in. I've never been asked to sign such an agreement to look at property, & around here, not many buyers use a buyer rep. Yes, the realtor works for the seller (because that's who pays the commission), but has to treat everyone fairly. It's still up to the buyer & seller to agree on the price & terms.

 

[Scott Merryfield]

We never signed any such form when we were home shopping seven years ago in Michigan, nor when we were shopping for condos in South Carolina 4-5 years ago. Of course, the realtors were not working for us, but for the sellers. We contacted the realtors representing the properties we were interested in seeing. It may vary by state, as Chris stated, but I would be suspicious.

 

[Tim Morton]

Robert:
Not to Flame you here, but you better get clue FAST!!!! You are in the market to commit a couple hundred thousand dollars of your future income and you are not smart enough to realize THAT small detail..you best hire yourself an attorney before going any further.

 

[Evan S]

I am presently looking for a house and I had to sign with my present realtor. However, I have a catch in the agreement. The realtor I signed with only represents me for certain areas, and I have another realtor I signed with who represents me in a territory approximately 20 miles more north.

Perhaps you can work this out with the guy you signed with.

 

[Jeremy Illingworth]

I never signed anything when I bought. I have a realator in the family which comes with knowing lots of realators and both here and there I have never heard of such a thing.

jeremy

 

[James Edward]

Robert- I don't think it's as bad as you think. I'm almost certain that what you signed states that if THAT particular realtor had shown you a house, you cannot turn around and buy THAT specific house through another realtor or on your own.
It should NOT preclude you from working with another realtor to look at and/or purchase a home that had not originally been shown to you by realtor #1. If the document IS more substantive than that, it IS a big deal.
This is done precisely for the reason Joe stated.
Get a copy of what you signed, and consult a lawyer, as recommended above. You'll need one at some point in the process anyway...

 

[MarcVH]

In a way it's good that you learned fairly early in the process one of the basic principals: don't sign anything you don't understand. Remember this as you continue through the process. It's not always easy.

 

[Francois Caron]

Definitely! Read EVERYTHING that's presented in front of you during the entire project without exception! I was surprised to find out how many people in my building never bothered to read the condo agreement before they purchased their units! I don't recall having to sign a realtor's agreement with my realtor except when I actually wanted to make an offer on my current unit which was reasonable since she's the one who found the place.

In your case, this is your first flub. It would be a good idea to also make this your last. I'm already suspicious of the realtor because he didn't properly explain to you the terms of the contract before you signed it. He behaved in a way that gave the impression he was hiding something from you. Your best bet (as stated so frequently) is to consult an attorney specializing in real estate, present the document you've signed and explain the circumstances under which you signed it. Your state may have laws protecting consumers against certain contract signing practices. As an example, the province of Quebec's civil code is so strict that if it's proven in court that the signee was unable to fully understand the terms of the contract, the entire contract could be invalidated. Even the use of "small print" is no longer used because that too can be ruled as invalid.

See that attorney. Pay the fifty bucks for the hour and do your homework! When you buy any piece of property, you're in it for the long haul.

 

[MikeAlletto]

Do all realtors require this agreement form before they show properties?

No they don't. The only thing I signed was saying that my realtor explained the process and explained that she was working for me. It also explained her commission and I don't pay it but the person I buy the house from does. Also it explained what would happen if I looked at a house that she was also listing. I'd really say don't worry about it. If the realtor you have now isn't working out call them and tell them you are going to look elsewhere. They got nothing on you and there is nothing they can do about it. They aren't going to go after commission on a house they did not show to you. And they can't force you to buy something they showed you if you don't want it. The realtor does not control the buying process no matter what you sign. If you buy a house that you find on your own and never bring the realtor into it even though you are working with one they don't get the commission.

There are exclusivity agreements, but they aren't very binding. Everything exists to protect the buyer, not the buyer's rep. I wouldn't work with 2 realtors at once though. There is nothing wrong with it but it's frowned upon. Fire the original one and go with the 2nd one if thats what you feel more comfortable with.

Remember...you have the control, not the realtor.

 

[Craig]

Unfortunately these type contracts are becoming more common. I know in Georgia there was a law before the legislature that would have required that you sign one of these before you could work with any real estate agent. It would have mandated that the agent was your sole representative for a certain period after signing, 90 days I think. You would have to sign before you could be shown a single house by an agent.

This was presented as 'consumer protection' legislation, but you can bet it was done at the behest of the real estate lobby. I'm not sure if it passed or not.

 

[Ashley Seymour]

Unfortunately these type contracts are becoming more common.

Actually the opposite is true. What you are doing is hiring the broker to work for your interests, and not the sellers. Now did the realtor do an insufficient job of explaining the contract? From the tone it does. "Just sign here" never seems like a good way to explain why a contract should be signed.

Robert_Z. To be valid that contract should address several issues. It will have a start date and expiration date. A short date is not too bad, but something that runs six months, or a year is suspect.

How will the commission be paid and how much? Typically you will see that it is paid at closing by the lising broker to the buyer broker. You are responsible, but the contract may state that it is paid per the listing contract.

What types of properties and areas is the buyer broker to look for you?

How much will the buyer broker be paid if you buy on your own?

If you buy on your own, you run the risk of owing two commissions because you did not live up to the terms of the contract.

But what does the buyer broker have to do? He/she may have to provide you with lists of properties in the areas, price range, and styles you requested. Only presenting listing of his company may not be comprehensive enough for the buyer broker to be fullfiling the contract. What happens when one party fails to perform under the contract? It could be void or voidable. Keep good records of the types of property that you are shown, offered to be shown, and how often you are called.

The contract may even have a section that covers how much of a fee will be paid if a for sale by owner FSBO is contacted. An agent who only shows listed properties may not be working to your best interest. That is the nature of the contract, to work for your best interest, and not the best commission deal for the broker.

Before you do something that may cost you a lot, follow the lead above and check with an attorney. At least the attorney will explain the contract, what you can expect, and what happens if things don't work out. Then you can suggest that the agent spend a little more time explaining his contracts to other clients.

 

[Steve_Tk]

In Ga you have 3 days to get out of any signed contractual agreement. Step to it!

Don't know about Texas thoughh.

 

[Howard Williams]

In a way it's good that you learned fairly early in the process one of the basic principals: don't sign anything you don't understand. Remember this as you continue through the process. It's not always easy.

That sure sounds good but in all honesty, how many of us read and understood all the documents we signed at closing? I know I sure didn't. The agent very briefly said what each was for. I had to trust them.

The experience I had with my agent was not very positive. It's a long story but the ending was happy enough so I just chalked it up as live and learn.

Hindsight is always 20/20 and wisdom comes instantly.

 

[Greg_Y]

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[Rives Elmore]

The way I understand it, the agreement you signed binds you to pay commision (taken care of by the seller 99.9% of the time) to the buyer agent on property he has SHOWN you. It should not keep you from using others buyers agents to look at different homes...thats the way it worked for me when I looked around.

 

[Robert_Z]

Thanks for the replies, everyone. I expressed my displeasure to my realtor, but I am sticking with him. I am not going to go with his tag-team loan officer though.

 

[Ryan Wright]

That sure sounds good but in all honesty, how many of us read and understood all the documents we signed at closing? I know I sure didn't. The agent very briefly said what each was for. I had to trust them.

That's right. These contracts are very long and full of legalise. They are difficult to understand. I think the bastards make them that way on purpose.