Did this realtor screw me?

Robert_Z · 04-18-2003, 05:11 PM

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 · 04-18-2003, 05:18 PM

Quote:

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 · 04-18-2003, 05:28 PM

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 · 04-18-2003, 07:07 PM

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 · 04-18-2003, 09:04 PM

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.

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Tim Morton · 04-18-2003, 09:40 PM

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 · 04-18-2003, 09:46 PM

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 · 04-19-2003, 12:55 AM

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 · 04-19-2003, 01:24 AM

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 · 04-19-2003, 01:28 AM

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.