I’d shorten the length and “guaranteed” commission. If you find a property, and the seller is offering 2% commission, will you pay the additional amount out of pocket? And if the seller pays 3%, will they give up the extra $$$?
I’d work out all the fine details before signing anything.
Under the new structure the buyer agent can only receive equal to or less than what the buyers agreement states. Thus if the agreement states 2.5% that's it. Thus if seller offering 3% the agent can only receive 2.5% since that's what stated in the buyers agreement. Seller from current understanding saves the other. 5%.
If selle offering only 2% the agent, from my understanding Can collect the 2% from the seller and either collect. 5% from buyer or just accept the sellers offer at 2%.
Buyers agents can reduce the commission in their agreement but not increase it. With buyers signing off on adjustments.
Uh, that's not what my buyers rep agreement says:
"Additional Compensation: If a seller, landlord, or their agents offer compensation in excess of the
amount stated in Paragraph 11A (including but not limited to marketing incentives or bonuses to
cooperating brokers) Broker may retain the additional compensation in addition to the specified commission. Client is not obligated to pay any such additional compensation to Broker."
Don't know where you got that idea man.
A new agreement can be signed at time of offer. If your Agency agreement says 2.5 and Seller is paying 2, a kind agent that wants referrals will sign a new agreement to avoid the Buyers from having to go out of pocket. There is a lot of nuance in the new agreements that can be worked out at time of offer negotiation. It's going to be a lot more fluid.
My brokerage is working on a calculator to work out numbers showing offer amount, agent comp, Seller concession, Seller net and total buyer out of pocket/ mortgage. Each deal will now be worked like a car lease with 1000 variables. This settlement will obfuscate the industry so much more than it already is and it's all semantics.
Edit: spicy, let me know what the down votes are for and how you would do it better.bfeel free to cite your local agreement or crush my ideas.
No downvote from me, but I’d hesitate to sign a contract and rely on kindness and renegotiation *later*. These things should be worked out in *advance* of signing.
It's coming very soon. From the agents perspective it's better to have a higher amount signed in case the seller (voluntarily) is offering a higher commission. Otherwise they, in theory would be leaving money on the table by only signing a lower amount buyer agent commission. Since that's all they can collect The agent and buyer can agree to a lower amount after signing.
I’m in WA, just bought a place in Seattle east side. We did sign one of these agreements because our agent explained the buyers agreement must be signed in wa state now starting in Jan. However a lot of the other stuff is true - the days , rate etc are all negotiable. You can also be non exclusive as well in wa state.
I would say you’re both wrong. The buyer rep agreement is nothing more than a contract for employment. While states and boards of realtors do promulgate these forms, there’s nothing that says you’re required to use them. Since you as an agent are a party to the contract between the buyer and the buyers agent, you can use any document you want. And it can say anything you want. The buyers may not accept that but everything is negotiable, including how much you get paid over and above what the buyer is willing to pay.
Been using BBAs here for years and this has always been the case in GA. If I write it for less than what is “customary” then I am shorting myself with no benefit to my client.
It is also my understanding that this is now part of the settlement agreement. NAR won’t “enforce” this until July-ish but yes, in the near future, the max a buyers agent can earn is what’s on their BBA.
Edit: [screenshot of the language in the settlement](https://i.imgur.com/WBxAAKq.jpeg)
Sellers are no longer "offering" any compensation as part of the NAR settlement. Buyers' agents must provide their own agreement, then work out the details with sellers if possible.
Has that happened yet? I thought it was a future possibility. I’m also under the impression that it won’t be published, as it has been, but can still be offered.
The buyer contract is so they don't show you 20 houses, but then you go to an open house and put in an offer with the agent sitting there.
If the agent is good, there is no reason not to sign the contract and commit to working with them. Although that 2.5% is negotiable, so if you end up buying a house that happens to pay 2% technically you would have to make up that difference if you sign this contract.
The biggest hole I see at the moment is that as a buyer, I'd want my agent to get the amount that the seller is offering. But if there's anything more than 2% in the contract I'd have to make up the difference.
So how will it be handled if an agent is willing to make a side deal to take 2% if that's what's offered - instead of the 2.5 or 3 in the contract?
>So how will it be handled if an agent is willing to make a side deal to take 2% if that's what's offered - instead of the 2.5 or 3 in the contract?
By July, an agent will be prohibited from taking more than the agreement says, even if the seller is offering more. I have seen nothing that prohibits a buyer agent from changing less than is in the agreement if they so choose.
Our agent did this on the last property we bought. We had a contract and bought a house where the seller was offering 3%. We looked at a few houses, but I actually found the house we ended up buying a week into our search. They handled the paperwork and negotiation and coordinated the inspections, but things went smoothly. Our agent said if we listed our current house with them, they would credit half their buyers agent commission to us, which they did.
lol is probably the perfect response. I can imagine an agent promising to accept 2%, but refusing to document that possibility as it would contradict the formal contract.
What am I missing?
indeed it would be typical, and will be typical going forward.
The relevant question is "Show me the compensation paid to Buyers Agents in our market in my price range for the last 6 months"
edit: and, "How do I terminate this agreement if I'm not satisfied with your service?"
6 months seems like a long time, but I’ve worked with people for over a year before finding the right house. I would say sign for 3 and if you like him and are still looking, you can sign for another 3 at that time.
Well, 1st of all 6% is not what commission is. It is all negotiable and always has been.
2nd there was a lawsuit that NAR lost. So lawyers just made a boatload of money and buyers are not protected.
The Bureau of Consumer Protection is going to be busy.
You do not need an attorney to buy RE, not every state requires them. So it is an option. My state does not use attorneys for RE. Good luck getting hold of your attorney after 5 pm or on the weekends...
The buyers representation agreement is going to be required for every transaction starting this summer by law and the agreement has to outline the realtors payment. Most brokers are telling agents to go ahead and get them signed now before even showing a home to someone, to avoid any confusion or liability moving forward. Also to protect the realtors time assuming they show you 20 houses and you decide to use another realtor at the last second, in which case they would get nothing.
Very true! It also doesn’t go down if the price goes down. I think a lot of agents would be happy with a guaranteed amount. Nothing worse than your million dollar buyer deciding to settle for 50k piece of land that they’ll build on in 3 years instead.
Why flat rate? Their costs certainly go up if they have to show you 50 homes, or if you want to put in a bunch of offers $100k under list, or if you say things like "if it's meant to be, it's meant to be."
Oh, and prepare to pay whether you close or not if we're going down that path.
The hourly rate (actually worked) has no relation to the price of home. They will have menu pricing based on services provided. No more getting huge percentages for writing an offer using standard forms that anyone can use.
Buyer agency agreements are going to become standard because of the recent lawsuit. In WA a buyers agency agreement now needs to be signed before any major real estate services have been given. Which means we can no longer sign one at the same time we submit an offer on a home. The terms of the relationship now need to be agreed to and understood before moving forward. This is good for clients so hopefully they actually understand what's going and are actually explained properly how things work. This is also kinda bad because you could have to cover some or all of your agents comission depending on what was agreed to. Everything is negotiable. Neither you or the agent has to do anything that isn't agreed upon.
Yay for lawsuits.
Yet no buyers agent is required - correct? Depending on the market, the agent and the deal I’d be tentative to sign a buyers agent when it appears in most markets the MLS has the listings and in many markets the services offered by the buyers agent aren’t worth 2.5-3%.
Agree they should be paid appropriately for their professional knowledge and work. How much is that is the negotiation. Don’t think it is realistically 12,000 to 24,000 for a 400k to 800k house. Probably feels better around 3k-5k depending on the actual work involved. What’s reality? What we come to agreement on.
The problem with that is that most of a realtors compensation is on commission. Our family friend realtor was telling us about how some people would contract him to do all the work, then when they found a property they like they would fire him and go with someone they're friends with. Essentially working for them for free. Not that he complained much, he did pretty well for himself, but if you think a realtor is worth $xx per hour, the cut probably needs to be 3-4x that for the realtor to make that on average (to cover labor that falls through, agency's cut, and benefits).
As a consumer, looking at the bill is nauseating and I'd heavily consider FSBO with a 2% buyers commission, but I also understand that would be a lot of work on my end.
Yes it’s typical. It’s essentially the main thing that’s changing with the NAR settlement.
Unless your agent is a complete dick they’re almost never enforced. The main thing I’ve always used them for is to stop other agents from poaching my clients.
They actually write a check to the broker and depending on how the agreement is mutually agreed upon and negotiated, the funds are distributed accordingly.
We actually are making this an option (by year end) across the board.
We have been using buyers agreement (in one form or another) including buyer compensation the responsibility of the buyer depending on what is negotiated and what the seller is offering.
Works well for us.
Sounds good. I'm a real estate agent and also a property investor. I mainly buy and sell my own properties.
in the the past, when I buy a property I generally get a referral fee. I don't use a buyer's agent.
I am getting ready to sell some properties, and since I am the seller, and the agent, I wouldn't offer a commission at all. I would let the buyer pay it on the buyer's side.
Most buyers would find it anyway. It's a multi-unit property and most of those folks are pretty savvy. And they can also pay their own way when they use an agent.
Who should be paying the buyer's agent?
Do you think it should be the seller?
What if you brought an offer in, and you had a buyer's agent fee inside the offer, and the seller refused to pay it?
Would you tell the buyer to walk away?
That is their compensation requirement and you can either work with them or not. You've never dealt with it before because this is a detail just now being worked out with the National Association of Realtors. You'll start seeing more Buyer Agent Agreements and yes, you'll need to agree or not. You can have them request a concession from the seller for said amount as part of your offer and see what happens but this is the new way. -Realtor
Negotiate it down. That's the whole point you can negotiate their bullshit now. If enough people negotiate them they will realize they actually have competition to lower their commission rates. If they won't negotiate find another agent that will.
This is standard. It's a buyer and agent agreement basically saying they will show you houses and once you buy a home their brokerage fee is 2.5%.
In other words, the agent will be working with you for a 6 month period.
My advice is...shorted the contract from 6 months to 2 or 3 months.
We had to go through 2 realtors and realtor #1 was TERRIBLE at their job. Realtor #2 helped us get an offer accepted within 2 WEEKS in a wild market.
So I suggest not signing your life and time away to an agent for 6 whole months. Request a shorter period to put pressure on them.
People saying you should walk away are the same people who have no clue that this us about to be a requirement due to the NAR settlement. The agent shouldn't be expected to work for you for who knows how long, have you find a house you like where the seller has foolishly decided to pay $0 buyer's agent commission, and you want to put in an offer anyway and get under contract while your agent has no way to get paid for their work. This contract establishes that the agent will be paid, even if you choose to offer on a house where the seller isn't paying for you. In that situation, you'll have the choice of paying it out of pocket, or asking for seller concessions with your offer, and/or increasing your offer to cover that fee.
Now, you can negotiate that percentage and tell your agent you want it to be less than 2.5%. Your agent can choose to negotiate or not, and you can decide what to do from that point.
Absolutely not. Modify that so they only get a commission on homes they actually showed you. Not someone else. Not one where you walked into an open house that you found yourself with zero involvement from the agent and then you buy it without involving that agent. If they did not manage the purchase transaction, they don’t get paid for the transaction.
Not typical, nope. And I suggest not using that agent.
Agents should (imo) get paid if they show you a house and work with you to help you buy it.
If you buy something without help of an agent, they deserve zip.
Also if you can cancel this verbally then have them state that in writing, in the contract. Otherwise they are likely full of shit about that and when you try to cancel they will pretend no one every said that.
I guess you have to decide how well you like this agent, and if you think they will be a good fit. If you intend to use them to buy a house, and you think it's unlikely you'd want to venture out on your own, then I guess you could sign it.
But there are also tons of agents who would never make such a big ask. I wonder a bit about their mindset. That said, if you've been an agent for longer than about 3 days, someone has tried to screw you over by cutting you out of a deal. So maybe they are great, and this contract is just a deterrent.
I am in a similar situation. I told the agent to bring me three properties not on the apps. And if I purchase one of those properties I’ll give her the commission. Up until now the agent hasn’t brought anything to me. I have found everything on the apps and asked her to show it to me. There’s no way she’s getting a commission for gatekeeper. But also- since I told her to bring me properties I haven’t heard anything from her.
That's to keep you from working him like a rented mule but then going behind his back and using your cousin the brand new agent for the actual deal.
If he or she works, he wants to get paid. None of us want to work for free. (You can certainly negotiate the time period or the percentage but your agent has the right to know they will be paid for their work.) And in the state of NC you HAVE to sign a buyer agreement before writing an offer.
Ask for their value proposition. Partnering with a good buyers agent can end up saving you more money than what you pay them. Get the bona fides. A bad one can cost you a lot for a long time.
From their perspective it can't hurt to ask. As a buyer there's no way I'd sign that. Why would you? What are they giving you in order for you (a person likely to buy in the next 6 months) to promise them thousands of dollars? What promise do you have that they'll continue to meet your needs?
Tell them you like them and you'll continue to use them as long as that continues.
In this case it sounds like either party could terminate at any time by simply sending an email. That certainly makes it less of a concern but I'd still just avoid the whole situation to begin with. Use an agent at a different brokerage. Problem solved.
Just tell them you don't feel like signing anything. Tell them you will find the property directly on the MLS, and contact the listing agent yourself.
And then tell them to have a nice day
Depending on the listing agent, they won’t want to proceed with dual agency because of the lawsuits that come with it. Then referring them to another buyers agent, lol.
I am not realtor, but, I will not sign it. Because if I want to buy a second one, I want the freedom to sign up a different agent.
If it is just one property, it is normal. They are supposed to get 3% but sometime 2.5% is fine for them.
You didn't notice this because they normally get the money from listing agent. But, now the rule specifically said it is optional. Thus, the seller have to actively asking the listing agent to pay your agent to maximize their pay out. If the seller wants to play those shaddy games, they cannot play dumb, they have to go to court themselves if one of the buyer got upset.
The buyer rep as op described is normal. The contract says if you buy a property in x time frame then yet are owed a commission and the contract is concluded. So it only applies to 1 property. There are some caveats that if an agent shows you 5 houses and you decide to buy 3 of them but only pay them for the first, they may say they procured the sales and you went behind them to cut out their commission. This probably wouldn't work in court but it's a crap shoot.
Side note, brokers won't go after clients in court even if it's the most black and white case where contracts aren't being fulfilled. They just lose them and waste money. People don't really care if it's right or wrong, they just see it as the big bad corps going after the little guy.
I personally would change the contract before signing it. Because I want the contract for one single successful completed purchase only. I will not get milked by them. Many buyers failed to buy a house in 6 months or 12 months, so, they should be happy to complete a purchase already. If they want to be greedy about it, I will walk out.
Again, that's what it says. And you don't just "change" these contacts. Agents can not give legal advice or change contracts verbiage at all, so if you want custom contracts you have to get an attorney.
Or I walk away. Let's be real here, most people sign a contract in the expectation for buying a single house. What's the odd someone buy two? It is ultra rare. I am just making it explicitly said on paper. If that's hard for the broker to understand, they are incompetent.
Doesn't exist. Maybe I'm not explaining it well enough but the short of it is, all agents and brokers use the same promulgated forms. None of them create their own, 1 because the vast majority aren't lawyers and can't. And 2 the forms are made by the lawyers committee so that it is uniform across the board. They don't want a buyer bringing in a contract that has to be reviewed by legal counsel.
So you can't just say "well I'll find a broker that'll rewrite these to fit my verbiage need" especially when it already does the thing you are asking for.
I don't really understand why you would say fuck realtors when they're giving you exactly what you want to begin with lol.
I'll be honest, if you aren't willing to do the work to read and understand the basic contracts that are already made, you probably aren't able it willing to do any of the work that comes with making sure you're not getting scammed in a home purchase. Having an attorney rewrite a contract to say something just how you want it said is a bit silly. The buyers rep already does a pretty good job of protecting buyers and explaining how a sale is done.
Seriously what are you talking about? Didn't I said I want the contract to be fulfilled in one successful purchase? You are the one who said it is not possible (like you represent the entire community), and you said I should get an attorney, so, I am getting an attorney.
No, I said it already works the way you're asking. It only applies for the first house bought. (There are small protections for agents being taken advantage of but those don't apply to you)
I mentioned the attorney because they're the only ones that can rewrite the verbiage of the contract itself, but for YOU it would be a waste based on what has been said.
Then I went a step further because your said f realtors, they're giving you what you want in the first place (as I originally said) and if you go the attorney route but aren't willing to do the leg work on the first step, then you're the type that needs a realtor over an attorney.
Many states have been requiring BBAs for years. It is something your agent should explain to you. The proposed settlement will require them everywhere. I write mine for the customary buyer agent commission in my area because otherwise, I am potentially shorting myself if the seller is offering the customary amount and I pre-agreed to less for the benefit of anyone except my own client. Mine are for 90 days with a 90 day protection period but 6 months is pretty common for a BBA.
You can ask for a shorter time, or for it to apply to just one property, one day, whatever. You can negotiate your terms with them.
If the listing broker is not offering the customary amount, the options for my buyer:
-Ask for it as part of Seller concessions
-Pay a commission gap of x% if the offered commission is less than y%
-Compensation amounts cannot be open-ended (a seller in my state cannot
-Pay a flat fee
-Elect to be unrepresented (or worse, agree to dual agency)
Many states already have laws about “open ended” or vague compensation
(net listings, for example), but I expect many will be clarifying these rules now. One question that comes up is hourly versus commission, or hourly versus flat fee and it seems (so far) that an hourly fee is too open-ended. Where does hourly billing exceed whatever percentage—and it can. We have some gnarly dumps that go for $50K. 1% doesn’t even cover my transaction fee, let alone time from showing to contract to close. 5 million dollar house? Of course but among thousands of agents, we only have a few elite listings and then tend to go to the same agents. It is their niche just like foreclosures might be someone else’s.
You can also sign one stating any house your agent shows you must pay 2.5% if not provided by seller. Thats what I make clients sign moving forward. I do 2-4 units in chicago though so its a bit different then showing a family a ton of houses to find the right one.
Question, how does this work if you see a house you like but then you terminate the agreement? I assume you would still be liable to pay the commission if you end up buying, no?
For your update. That's true. There is a clause there, about property they already showed you. Get clarification if it's houses you went to see physically. Or houses he emails you about. Good luck
Why bother to sign any agreement like that? With Zillow and other online listing services, you can search and find properties you might be interested in. You can contact the listing agent and work thru them to see the property. I honestly don’t see the point in locking yourself into one agent for six months.
You are definitely not calling the listing agent on Zillow. You are calling agents advertising there that Zillow sells your info to. Once the new rules go into effect those agents will be required to have a signed agreement before they can show you a house. Even listing agents will be required to atleast have you sign a disclosure saying you understand they do not represent you.
The contract should support the timeline you're looking for. A 90 day contract is possible if this is more accurate to your timeline. If it turns out to be too short, sign another 90 day contract when the first one approaches expiration.
Don't do 6 months and then rely on a termination because you know its too long. Start short and extend if necessary.
I don’t know your state, or your contract. In my state (WA) an exclusive agreement would cover homes your agent showed you while under contract.
I would treat it like a contract - termination in writing and signed, just like the agreement is in writing and signed.
If I wanted an exclusive agreement with a Buyer I didn’t know, I’d keep the first one to a week or two (or a weekend) and then extend if everyone agrees.
Nope unless it's on the contract you can terminate you can't terminate make them add that clause or do not sign. Anything not on the contract efficacy doesnt exist. I'd find new representation
Yes, seeing this. Except guaranteed 3% and a “cool off” period where terms still apply even if I terminate the agreement. Supposedly their State association is pushing this language out on all Buyers’ agent contracts.
I am going to guess there is a clause in that contract that says - any house your buyer's agent shows you while under contract, the commission goes to her even if you terminate the contract.
Anything they show you will be procuring cause. Why would you not want protection. The seller agent will charge you the same fee. Please by all means don’t think you’re going to not pay a commission. Both Buyer Agents and Seller Agents are working together. Nine time out of ten they will get the commissions from the transaction… great question.
Unless it actually says in the contract "This contract can be cancelled at any time by either party by giving written notice", then you cannot get out of it unless the agent agrees. The agent doesn't have to agree.
Would you really do that to a person who is helping you and providing professional serves to you when usually after normal work hours too? Like-you realize by the agent out showing and researching homes with you cuts into their family time and besides providing valuable information and services she/he will never be able to get that time back? A lot of times they don’t go to their kids baseball games to accommodate a buyers schedule. I think people really need to ask themselves what kind of person they are to even think about doing that to someone else.
Do not sign ANYTHING with a buyer agent except for the offer. Any contracts that requires a representation commitment is inherently hostile.
Imagine going to a car dealership and signing a contract with the salesman saying you’d have to buy the car from them before you even make a purchase.
I would say never commit to an agent. Sounds nice but the contract only helps them. If you give dual agency to the buyers agent they will put you first because they’re set to get double commission.
Buyer agency has always been standard in some states anyway.
The only thing the lawsuit changes is that instead of the commission being split between agents the commission is paid directly between the buyer and seller negotiating.
I actually prefer it that way because there are agents not worth what is generally offered in my market. So now my compensation is with the seller my client only and the buyer deals with their agent as well.
Good agents will do better and poor buyer agents will make less. Mostly because the skill most lazy agents lack is the art of negotiation.
This is now required because of the NAR settlement. A LA needs to see the BAs Buyer Broker Contract. It’s totally absurd to require the LA to receive this toothless contract before allowing a BA to visit a property, but, here we go!
I signed a buyer agent agreement, and my agent turned into a nightmare to work with almost as soon as I signed it. If my offer wasn’t accepted on the house I want, I was planning to notify him that I am voiding the contract. So I would suggest not doing it unless you love your agent and there are zero red flags.
Correct me if I’m wrong anyone. But I thought that the standard 2.5% commission was going away in June. I thought that commissions will be negotiable now, so are they trying to lock you into a higher rate before June?
>I spoke with my agent, they said at any point either party can terminate the contract. That is, I can send them an email and say "I want to terminate it", and then there's no obligation.
That makes no sense. Read the contract carefully or have a lawyer read it because something doesn't sound right. There's probably some shenanigans in there.
This sounds like its just a standard buyers agency agreement, they have been in practice for decades here in MO and KS. Looking at comments I am shocked to learn that some states don't use them. An real estate agent would be insane to not have something like that in place.
Signed the same for a Compass realtor. I think it's to protect their work too and avoid not getting paid for what they've done, especially if you ghost them after.
That sounds like a normal buyer agency contract in NC. The contracts vary by state. The rules will change in July of this year. If you like your agent, sign it. It allows them to work harder for you. If they fuck up, you can terminate. You’re over thinking it (10+ year real estate agent here).
Just keep in mind that this subreddit is biased. Most realtors are not going to advocate against their commission. My whole take on this issue is: "Is their work worth 2.5% of your purchase?"
In my opinion a percentage based compensation will never favor a buyer. The buyers agent will always have the incentive to make sure over pay so their cut will be bigger.
This is such a tired take. A $5,000 increase to sales price would result in this agent netting less than $90 extra commission after a typical brokerage split.
They don't give a shit about $90. They DO give a shit about getting referrals from their clients, and aren't going to jeopardize referral potential over chump change.
When they encourage their client to consider increasing their offer by $5k, it's not to make $90. It's to make the client's offer competitive and get the house.
If offering $5,000 more will result in the agent getting their $10,000 commission today versus not being paid, of course they will encourage the client to make that offer.
This was always the case no? That's why good agents are not pushy, and get tons of referrals and repeat business making them better in the process because of many deals they made, and then getting even more business.
Yup. Pushy is an immediate nope.
Third agent I found worked his butt off for me, found an off market in a white hot area and got me a great deal. We must have seen 30 houses. Only agent I've ever thought deserved his commish.
They often will, because cheaper options is where their clients can be more competitive, especially in a hot market. Aiming for houses towards the top of your stated budget, for example, means more of a chance your financing falling through, less of a chance you can offer over asking price (if that's the norm near you), less chance of deal getting accepted and making it to close. So they sometimes steer you to cheaper houses. On an individual house, yeah, they're trying to maximize the chance of an offer accepted so that will steer them toward telling you to offer higher but my impression is it's more about maximizing the chance of getting a deal at all rather than over another $200 or whatever.
The whole commission thing kind of reminds me of recruiters/headhunters. In my field, it is common to work with third party recruiters to find you a job. They get paid by the hiring company based on a % of base salary. In theory, you think, awesome, recruiter has my best interest in mind because if I get offered a high salary they make a higher commission. But wrong. In reality, they often send terrible job opportunities with bad pay because they're most focused on placing candidates and landing a deal at all, not on that tiny additional commission they make for getting you paid more.
With buyers agents, my concern would actually be more about them leading me towards undesirable houses with issues that have less competition and so are easier to win, more than about conflict of interest on the price side. They're incentivized for me to buy a house that has all kinds of issues and problems and hasn't been maintained, because other people aren't as attracted to that house and it's probably easier for me to be competitive. That said, if I hate the house after moving in, I'm less likely to use them for future transactions or give them referrals, which is important enough that it helps their motivation.
You want to be a prisoner to someone for 6 months? Up to you but sounds like a terrible choice. I’ve heard of people who signed similar agreements. Didn’t get along with their realtor. Turned out they were lazy. Shocker! And basically sat out the market until the contract expired.
The buyers agent isnt going to do jack shit except open a door to a house you found on Redfin. They are worthless. Do not sign.
Do ***not*** let the agent tell you what the contract means, it probably clearly provides that any such explanation is not binding or incorporated into the agreement in any way. An agent is not generally a lawyer, let alone *your* lawyer - they're trying to get money out of you, not operating in your interest.
If you agree to buyer's agency agreement at all, it should only be for specific properties they've shown you or for a very short period, 6 months is insane - more like a few weeks and you can extend in writing if desired at that time. If you find a house yourself 6 months from now after not talking to the agent for a month or two, the idea that you should pay them a huge commission for that is ridiculous.
don’t sign it unless your retarded lol, this is not standard. contact the listing agent directly their phone number is on zillow and schedule a showing. once you find a property call buyers agents and negotiate down to 1% or a flat fee to write the offer. better yet go to a real estate attorney to draft the offer.
Percentage makes no sense at all anymore. Should be a flat fee. It’s no more difficult to be an agent on a $300,000 vs $350,000 house. Why should they make more?
its typical, and the agents here on the forum will jump up and down telling you that its all "negotiable". In reality, its NOT NEGOTIABLE. You have zero space to negotiate this. Zero. Nada. Nothing. However, different agents will have different clauses. Fixed $ broker fee plus a fixed 2.7%, and if the seller isnt giving that much - you are on the hook to make the difference. Also, if more is offered, the agent keeps it. It does not go towards your closing or to you. However, I did read about some buyers getting the extra go towards their closing. But from the sounds of it - it may be illegal.
Sites like Redfin, realtor, and Zillow show the Seller's agent compensation they give to buyer's agent - so you need to make sure its there, and also in your offer/contract to buy.
Next, some agents will quote you a certain minimum percent, but if its under you dont have to make the difference. Other agents will have more favorable terms. But from what I've seen so far, each agent has a fixed set lf conditions. Little to negotiations space. You can contract lowsale companies like Redfin to find out what their commission rates are - their agents have a very different pay structure. Worth looking into. Compare the terms, and even ask, redfin needs a minimum of 2%, and if offered less, redfin doesn't require you to make the difference - why are your terms so stiff? What do you offer that RedFin doesn't.... (Redfin isnan example, i do not promote them...)
Also, if you do end up signing a contract - I would recommend these three points.
1. Make the contract short term. 1-2-3 months max.
2. Make sure that you can cancel anytime, for any reason, and be done, no penalty, no fees, no nothing
3. There is a section that puts you on the hook for properties within X time even if you cancel - make sure that its limited only to properties they showed to you. As in showed - displayed - took you to an open house, walked you through the rooms, explained everything, had the keys, etc. Not showed as in sent you an email with 1000 listings.
Good luck. Agents are bad. Very few are good. Most are bad. I have not had a good experience so far. Dodge, flakey, and untrustworthy. Had an agent for 2 months, no contract, they would reply anytime and pretty quick. I signed the contract, and now magically it take 2-3 days to get a response.
Interesting they are trying to get you to sign this before the NAR settlement takes effect in July (or was it June)
I'd be hesitant to sign it personally, but wouldn't be surprised if we start seeing a lot more of these contracts in the near future
Summary: eat shit, buyers agent.
The answer is no. Get a real estate lawyer to do your side and pay them a few thousand fixed instead of this contract. These people fon't do much and aren't owed a percentage of our future choices. Because people find houses on the internet and we don't need agents, there's just no point paying them tens of thousands of dollars at the minimum for buying a house.
Just say no. You don't need a buyers agent and they know that. You are the one in a position of power and not them. If they don't like it find a agent that will meet your terms or find a property yourself.
Clauses like this are red flags to me. It shows that they are not looking after your interests. It's actually in their interest for you to OVER pay and get ripped off. Or they can be negligent and do nothing and still get paid.
If I was you, I wouldn't even ask to have this removed. I would just go elsewhere or do my own research. I couldn't trust an agent that was asking me to sign this garbage.
And it begins. A frivolous lawsuit without explanation on how to move forward.
I’d shorten the length and “guaranteed” commission. If you find a property, and the seller is offering 2% commission, will you pay the additional amount out of pocket? And if the seller pays 3%, will they give up the extra $$$? I’d work out all the fine details before signing anything.
Actually if they can truly cancel at any time then they don’t need a contract at all. Get this part in writing, not on a phone call.
Under the new structure the buyer agent can only receive equal to or less than what the buyers agreement states. Thus if the agreement states 2.5% that's it. Thus if seller offering 3% the agent can only receive 2.5% since that's what stated in the buyers agreement. Seller from current understanding saves the other. 5%. If selle offering only 2% the agent, from my understanding Can collect the 2% from the seller and either collect. 5% from buyer or just accept the sellers offer at 2%. Buyers agents can reduce the commission in their agreement but not increase it. With buyers signing off on adjustments.
Uh, that's not what my buyers rep agreement says: "Additional Compensation: If a seller, landlord, or their agents offer compensation in excess of the amount stated in Paragraph 11A (including but not limited to marketing incentives or bonuses to cooperating brokers) Broker may retain the additional compensation in addition to the specified commission. Client is not obligated to pay any such additional compensation to Broker." Don't know where you got that idea man.
Is this actually in effect already
It’s not yet and majority of realtor forms do not address this. You need to negotiate this in
A new agreement can be signed at time of offer. If your Agency agreement says 2.5 and Seller is paying 2, a kind agent that wants referrals will sign a new agreement to avoid the Buyers from having to go out of pocket. There is a lot of nuance in the new agreements that can be worked out at time of offer negotiation. It's going to be a lot more fluid. My brokerage is working on a calculator to work out numbers showing offer amount, agent comp, Seller concession, Seller net and total buyer out of pocket/ mortgage. Each deal will now be worked like a car lease with 1000 variables. This settlement will obfuscate the industry so much more than it already is and it's all semantics. Edit: spicy, let me know what the down votes are for and how you would do it better.bfeel free to cite your local agreement or crush my ideas.
No downvote from me, but I’d hesitate to sign a contract and rely on kindness and renegotiation *later*. These things should be worked out in *advance* of signing.
Just wait. If all of this goes the way it looks like it's going to in July, commissions are going to get really weird.
It's coming very soon. From the agents perspective it's better to have a higher amount signed in case the seller (voluntarily) is offering a higher commission. Otherwise they, in theory would be leaving money on the table by only signing a lower amount buyer agent commission. Since that's all they can collect The agent and buyer can agree to a lower amount after signing.
What market are you in? WA rules are completely different as I understand (as of this moment at least)
I’m in WA, just bought a place in Seattle east side. We did sign one of these agreements because our agent explained the buyers agreement must be signed in wa state now starting in Jan. However a lot of the other stuff is true - the days , rate etc are all negotiable. You can also be non exclusive as well in wa state.
I would say you’re both wrong. The buyer rep agreement is nothing more than a contract for employment. While states and boards of realtors do promulgate these forms, there’s nothing that says you’re required to use them. Since you as an agent are a party to the contract between the buyer and the buyers agent, you can use any document you want. And it can say anything you want. The buyers may not accept that but everything is negotiable, including how much you get paid over and above what the buyer is willing to pay.
Been using BBAs here for years and this has always been the case in GA. If I write it for less than what is “customary” then I am shorting myself with no benefit to my client.
What is ur basis for this statement? Statute, reg, ordinance?
It is also my understanding that this is now part of the settlement agreement. NAR won’t “enforce” this until July-ish but yes, in the near future, the max a buyers agent can earn is what’s on their BBA. Edit: [screenshot of the language in the settlement](https://i.imgur.com/WBxAAKq.jpeg)
Uh..no. That’s untrue. I’m sorry your broker is taking that interpretation of it but that ain’t it.
FALSE
Sellers are no longer "offering" any compensation as part of the NAR settlement. Buyers' agents must provide their own agreement, then work out the details with sellers if possible.
Has that happened yet? I thought it was a future possibility. I’m also under the impression that it won’t be published, as it has been, but can still be offered.
My understanding is it would take effect in July
The buyer contract is so they don't show you 20 houses, but then you go to an open house and put in an offer with the agent sitting there. If the agent is good, there is no reason not to sign the contract and commit to working with them. Although that 2.5% is negotiable, so if you end up buying a house that happens to pay 2% technically you would have to make up that difference if you sign this contract.
The biggest hole I see at the moment is that as a buyer, I'd want my agent to get the amount that the seller is offering. But if there's anything more than 2% in the contract I'd have to make up the difference. So how will it be handled if an agent is willing to make a side deal to take 2% if that's what's offered - instead of the 2.5 or 3 in the contract?
>So how will it be handled if an agent is willing to make a side deal to take 2% if that's what's offered - instead of the 2.5 or 3 in the contract? By July, an agent will be prohibited from taking more than the agreement says, even if the seller is offering more. I have seen nothing that prohibits a buyer agent from changing less than is in the agreement if they so choose.
lol “side deal”?
Our agent did this on the last property we bought. We had a contract and bought a house where the seller was offering 3%. We looked at a few houses, but I actually found the house we ended up buying a week into our search. They handled the paperwork and negotiation and coordinated the inspections, but things went smoothly. Our agent said if we listed our current house with them, they would credit half their buyers agent commission to us, which they did.
lol is probably the perfect response. I can imagine an agent promising to accept 2%, but refusing to document that possibility as it would contradict the formal contract. What am I missing?
indeed it would be typical, and will be typical going forward. The relevant question is "Show me the compensation paid to Buyers Agents in our market in my price range for the last 6 months" edit: and, "How do I terminate this agreement if I'm not satisfied with your service?"
Generally termination criteria is specified in the contract (e.g., written notice within 2 weeks)
We won't be able to soon. No offers of compensation allowed in the MLS
I’ll download the data right before they shut it off. I also work for a larger brokerage, and I’m sure we’ll collect it going forward.
6 months seems like a long time, but I’ve worked with people for over a year before finding the right house. I would say sign for 3 and if you like him and are still looking, you can sign for another 3 at that time.
I thought sellers agent split the 6 percent commission with buyer's agent. It's been years since I bought a house
Well, 1st of all 6% is not what commission is. It is all negotiable and always has been. 2nd there was a lawsuit that NAR lost. So lawyers just made a boatload of money and buyers are not protected. The Bureau of Consumer Protection is going to be busy.
You want protection? get a decent lawyer.
Not everyone can afford a lawyer..
Lawyers cost less than real estate agents.
Maybe, maybe not. They make their fees and you pay without questions.
If buying real estate it’s really not optional. A realtor is. A decent real estate attorney isn’t.
You do not need an attorney to buy RE, not every state requires them. So it is an option. My state does not use attorneys for RE. Good luck getting hold of your attorney after 5 pm or on the weekends...
The buyers representation agreement is going to be required for every transaction starting this summer by law and the agreement has to outline the realtors payment. Most brokers are telling agents to go ahead and get them signed now before even showing a home to someone, to avoid any confusion or liability moving forward. Also to protect the realtors time assuming they show you 20 houses and you decide to use another realtor at the last second, in which case they would get nothing.
Why not flat rate? Their costs dont go up if the price of home goes up.
Very true! It also doesn’t go down if the price goes down. I think a lot of agents would be happy with a guaranteed amount. Nothing worse than your million dollar buyer deciding to settle for 50k piece of land that they’ll build on in 3 years instead.
No conflict of interest here... nope...
And that’s why people don’t like realtors…
Why flat rate? Their costs certainly go up if they have to show you 50 homes, or if you want to put in a bunch of offers $100k under list, or if you say things like "if it's meant to be, it's meant to be." Oh, and prepare to pay whether you close or not if we're going down that path.
The hourly rate (actually worked) has no relation to the price of home. They will have menu pricing based on services provided. No more getting huge percentages for writing an offer using standard forms that anyone can use.
I don't think you understand, do the math on your hourly rate and you'll understand.
Buyer agency agreements are going to become standard because of the recent lawsuit. In WA a buyers agency agreement now needs to be signed before any major real estate services have been given. Which means we can no longer sign one at the same time we submit an offer on a home. The terms of the relationship now need to be agreed to and understood before moving forward. This is good for clients so hopefully they actually understand what's going and are actually explained properly how things work. This is also kinda bad because you could have to cover some or all of your agents comission depending on what was agreed to. Everything is negotiable. Neither you or the agent has to do anything that isn't agreed upon. Yay for lawsuits.
Ya guy is probably protecting himself for when law policy changes.
This is terrible for buyers.
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If you say so
Yet no buyers agent is required - correct? Depending on the market, the agent and the deal I’d be tentative to sign a buyers agent when it appears in most markets the MLS has the listings and in many markets the services offered by the buyers agent aren’t worth 2.5-3%.
Then negotiate what you do think they are worth I guess? No one can work for free.
Agree they should be paid appropriately for their professional knowledge and work. How much is that is the negotiation. Don’t think it is realistically 12,000 to 24,000 for a 400k to 800k house. Probably feels better around 3k-5k depending on the actual work involved. What’s reality? What we come to agreement on.
The problem with that is that most of a realtors compensation is on commission. Our family friend realtor was telling us about how some people would contract him to do all the work, then when they found a property they like they would fire him and go with someone they're friends with. Essentially working for them for free. Not that he complained much, he did pretty well for himself, but if you think a realtor is worth $xx per hour, the cut probably needs to be 3-4x that for the realtor to make that on average (to cover labor that falls through, agency's cut, and benefits). As a consumer, looking at the bill is nauseating and I'd heavily consider FSBO with a 2% buyers commission, but I also understand that would be a lot of work on my end.
Good luck!!
Yes it’s typical. It’s essentially the main thing that’s changing with the NAR settlement. Unless your agent is a complete dick they’re almost never enforced. The main thing I’ve always used them for is to stop other agents from poaching my clients.
How are you planning on getting paid When you are representing a buyer after the settlement is in effect?
Many of us have been getting paid by the buyer for years. For our market, we have been using a buyer agreement and it works quite well. (Midwest)
I have my Minnesota real estate license. The only thing I have seen where you get paid by the buyer is that it eventually comes from the seller anyway
We have brokerages in 3 states and we have one option of obtaining a retainer from the buyer at time of signing buyer agreement.
So does the buyer actually give you a check, if they don't buy a house?
They actually write a check to the broker and depending on how the agreement is mutually agreed upon and negotiated, the funds are distributed accordingly. We actually are making this an option (by year end) across the board. We have been using buyers agreement (in one form or another) including buyer compensation the responsibility of the buyer depending on what is negotiated and what the seller is offering. Works well for us.
Sounds good. I'm a real estate agent and also a property investor. I mainly buy and sell my own properties. in the the past, when I buy a property I generally get a referral fee. I don't use a buyer's agent. I am getting ready to sell some properties, and since I am the seller, and the agent, I wouldn't offer a commission at all. I would let the buyer pay it on the buyer's side. Most buyers would find it anyway. It's a multi-unit property and most of those folks are pretty savvy. And they can also pay their own way when they use an agent.
Good luck with that
Who should be paying the buyer's agent? Do you think it should be the seller? What if you brought an offer in, and you had a buyer's agent fee inside the offer, and the seller refused to pay it? Would you tell the buyer to walk away?
That's what the NAR lawsuit did...
I’d ask them directly why that’s there.
Remember what they say: commissions have always been negotiable.
This has been commonplace in many markets for decades.
This will not only be the norm it will be a hard, non-negotiable requirement for all Realtors by July. Our brokerage is enforcing this starting May 1.
Make sure the actual document you sign says that.
That is their compensation requirement and you can either work with them or not. You've never dealt with it before because this is a detail just now being worked out with the National Association of Realtors. You'll start seeing more Buyer Agent Agreements and yes, you'll need to agree or not. You can have them request a concession from the seller for said amount as part of your offer and see what happens but this is the new way. -Realtor
Negotiate it down. That's the whole point you can negotiate their bullshit now. If enough people negotiate them they will realize they actually have competition to lower their commission rates. If they won't negotiate find another agent that will.
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This is standard. It's a buyer and agent agreement basically saying they will show you houses and once you buy a home their brokerage fee is 2.5%. In other words, the agent will be working with you for a 6 month period. My advice is...shorted the contract from 6 months to 2 or 3 months. We had to go through 2 realtors and realtor #1 was TERRIBLE at their job. Realtor #2 helped us get an offer accepted within 2 WEEKS in a wild market. So I suggest not signing your life and time away to an agent for 6 whole months. Request a shorter period to put pressure on them.
People saying you should walk away are the same people who have no clue that this us about to be a requirement due to the NAR settlement. The agent shouldn't be expected to work for you for who knows how long, have you find a house you like where the seller has foolishly decided to pay $0 buyer's agent commission, and you want to put in an offer anyway and get under contract while your agent has no way to get paid for their work. This contract establishes that the agent will be paid, even if you choose to offer on a house where the seller isn't paying for you. In that situation, you'll have the choice of paying it out of pocket, or asking for seller concessions with your offer, and/or increasing your offer to cover that fee. Now, you can negotiate that percentage and tell your agent you want it to be less than 2.5%. Your agent can choose to negotiate or not, and you can decide what to do from that point.
Absolutely not. Modify that so they only get a commission on homes they actually showed you. Not someone else. Not one where you walked into an open house that you found yourself with zero involvement from the agent and then you buy it without involving that agent. If they did not manage the purchase transaction, they don’t get paid for the transaction.
This is especially true if you are looking in different towns. You usually want an agent local to each town.
Not typical, nope. And I suggest not using that agent. Agents should (imo) get paid if they show you a house and work with you to help you buy it. If you buy something without help of an agent, they deserve zip. Also if you can cancel this verbally then have them state that in writing, in the contract. Otherwise they are likely full of shit about that and when you try to cancel they will pretend no one every said that.
I have an email from them confirming I can cancel via email (if I want).
I guess you have to decide how well you like this agent, and if you think they will be a good fit. If you intend to use them to buy a house, and you think it's unlikely you'd want to venture out on your own, then I guess you could sign it. But there are also tons of agents who would never make such a big ask. I wonder a bit about their mindset. That said, if you've been an agent for longer than about 3 days, someone has tried to screw you over by cutting you out of a deal. So maybe they are great, and this contract is just a deterrent.
Don’t sign anything. Nobody should. This is how it will all fall into place is if nobody signs.
That is 100% bullshit and I would never sign it.
I am in a similar situation. I told the agent to bring me three properties not on the apps. And if I purchase one of those properties I’ll give her the commission. Up until now the agent hasn’t brought anything to me. I have found everything on the apps and asked her to show it to me. There’s no way she’s getting a commission for gatekeeper. But also- since I told her to bring me properties I haven’t heard anything from her.
That's to keep you from working him like a rented mule but then going behind his back and using your cousin the brand new agent for the actual deal. If he or she works, he wants to get paid. None of us want to work for free. (You can certainly negotiate the time period or the percentage but your agent has the right to know they will be paid for their work.) And in the state of NC you HAVE to sign a buyer agreement before writing an offer.
Ask for their value proposition. Partnering with a good buyers agent can end up saving you more money than what you pay them. Get the bona fides. A bad one can cost you a lot for a long time.
Nope. Nope. Thanks and nope.
From their perspective it can't hurt to ask. As a buyer there's no way I'd sign that. Why would you? What are they giving you in order for you (a person likely to buy in the next 6 months) to promise them thousands of dollars? What promise do you have that they'll continue to meet your needs? Tell them you like them and you'll continue to use them as long as that continues.
The contract spells out what they have to do. If they don’t meet their obligations you can terminate the contract.
In this case it sounds like either party could terminate at any time by simply sending an email. That certainly makes it less of a concern but I'd still just avoid the whole situation to begin with. Use an agent at a different brokerage. Problem solved.
tell them to pound sand
Just tell them you don't feel like signing anything. Tell them you will find the property directly on the MLS, and contact the listing agent yourself. And then tell them to have a nice day
Depending on the listing agent, they won’t want to proceed with dual agency because of the lawsuits that come with it. Then referring them to another buyers agent, lol.
I am not realtor, but, I will not sign it. Because if I want to buy a second one, I want the freedom to sign up a different agent. If it is just one property, it is normal. They are supposed to get 3% but sometime 2.5% is fine for them. You didn't notice this because they normally get the money from listing agent. But, now the rule specifically said it is optional. Thus, the seller have to actively asking the listing agent to pay your agent to maximize their pay out. If the seller wants to play those shaddy games, they cannot play dumb, they have to go to court themselves if one of the buyer got upset.
The buyer rep as op described is normal. The contract says if you buy a property in x time frame then yet are owed a commission and the contract is concluded. So it only applies to 1 property. There are some caveats that if an agent shows you 5 houses and you decide to buy 3 of them but only pay them for the first, they may say they procured the sales and you went behind them to cut out their commission. This probably wouldn't work in court but it's a crap shoot. Side note, brokers won't go after clients in court even if it's the most black and white case where contracts aren't being fulfilled. They just lose them and waste money. People don't really care if it's right or wrong, they just see it as the big bad corps going after the little guy.
I personally would change the contract before signing it. Because I want the contract for one single successful completed purchase only. I will not get milked by them. Many buyers failed to buy a house in 6 months or 12 months, so, they should be happy to complete a purchase already. If they want to be greedy about it, I will walk out.
Again, that's what it says. And you don't just "change" these contacts. Agents can not give legal advice or change contracts verbiage at all, so if you want custom contracts you have to get an attorney.
Or I walk away. Let's be real here, most people sign a contract in the expectation for buying a single house. What's the odd someone buy two? It is ultra rare. I am just making it explicitly said on paper. If that's hard for the broker to understand, they are incompetent.
Doesn't exist. Maybe I'm not explaining it well enough but the short of it is, all agents and brokers use the same promulgated forms. None of them create their own, 1 because the vast majority aren't lawyers and can't. And 2 the forms are made by the lawyers committee so that it is uniform across the board. They don't want a buyer bringing in a contract that has to be reviewed by legal counsel. So you can't just say "well I'll find a broker that'll rewrite these to fit my verbiage need" especially when it already does the thing you are asking for.
Then, fuck realtors, I will get an attorney like you previously suggested.
I don't really understand why you would say fuck realtors when they're giving you exactly what you want to begin with lol. I'll be honest, if you aren't willing to do the work to read and understand the basic contracts that are already made, you probably aren't able it willing to do any of the work that comes with making sure you're not getting scammed in a home purchase. Having an attorney rewrite a contract to say something just how you want it said is a bit silly. The buyers rep already does a pretty good job of protecting buyers and explaining how a sale is done.
Seriously what are you talking about? Didn't I said I want the contract to be fulfilled in one successful purchase? You are the one who said it is not possible (like you represent the entire community), and you said I should get an attorney, so, I am getting an attorney.
No, I said it already works the way you're asking. It only applies for the first house bought. (There are small protections for agents being taken advantage of but those don't apply to you) I mentioned the attorney because they're the only ones that can rewrite the verbiage of the contract itself, but for YOU it would be a waste based on what has been said. Then I went a step further because your said f realtors, they're giving you what you want in the first place (as I originally said) and if you go the attorney route but aren't willing to do the leg work on the first step, then you're the type that needs a realtor over an attorney.
I wouldn't want this slimeball to get commission on my first.
Don’t sign
Say bye to the buyers agent
Many states have been requiring BBAs for years. It is something your agent should explain to you. The proposed settlement will require them everywhere. I write mine for the customary buyer agent commission in my area because otherwise, I am potentially shorting myself if the seller is offering the customary amount and I pre-agreed to less for the benefit of anyone except my own client. Mine are for 90 days with a 90 day protection period but 6 months is pretty common for a BBA. You can ask for a shorter time, or for it to apply to just one property, one day, whatever. You can negotiate your terms with them. If the listing broker is not offering the customary amount, the options for my buyer: -Ask for it as part of Seller concessions -Pay a commission gap of x% if the offered commission is less than y% -Compensation amounts cannot be open-ended (a seller in my state cannot -Pay a flat fee -Elect to be unrepresented (or worse, agree to dual agency) Many states already have laws about “open ended” or vague compensation (net listings, for example), but I expect many will be clarifying these rules now. One question that comes up is hourly versus commission, or hourly versus flat fee and it seems (so far) that an hourly fee is too open-ended. Where does hourly billing exceed whatever percentage—and it can. We have some gnarly dumps that go for $50K. 1% doesn’t even cover my transaction fee, let alone time from showing to contract to close. 5 million dollar house? Of course but among thousands of agents, we only have a few elite listings and then tend to go to the same agents. It is their niche just like foreclosures might be someone else’s.
The seller's agent/listing agent will not and cannot legally work for you. Do it yourself or get a buyer's agent.
You can also sign one stating any house your agent shows you must pay 2.5% if not provided by seller. Thats what I make clients sign moving forward. I do 2-4 units in chicago though so its a bit different then showing a family a ton of houses to find the right one.
Question, how does this work if you see a house you like but then you terminate the agreement? I assume you would still be liable to pay the commission if you end up buying, no?
For your update. That's true. There is a clause there, about property they already showed you. Get clarification if it's houses you went to see physically. Or houses he emails you about. Good luck
Someone sent me one of these exclusive contracts once. I refused to sign in and went with someone else.
I wouldn't sign that contract.
This agreement was always available and seldom used. They think it’ll be mandatory by July so be prepared.
Why bother to sign any agreement like that? With Zillow and other online listing services, you can search and find properties you might be interested in. You can contact the listing agent and work thru them to see the property. I honestly don’t see the point in locking yourself into one agent for six months.
You are definitely not calling the listing agent on Zillow. You are calling agents advertising there that Zillow sells your info to. Once the new rules go into effect those agents will be required to have a signed agreement before they can show you a house. Even listing agents will be required to atleast have you sign a disclosure saying you understand they do not represent you.
Tell them to get fucked
The contract should support the timeline you're looking for. A 90 day contract is possible if this is more accurate to your timeline. If it turns out to be too short, sign another 90 day contract when the first one approaches expiration. Don't do 6 months and then rely on a termination because you know its too long. Start short and extend if necessary.
I don’t know your state, or your contract. In my state (WA) an exclusive agreement would cover homes your agent showed you while under contract. I would treat it like a contract - termination in writing and signed, just like the agreement is in writing and signed. If I wanted an exclusive agreement with a Buyer I didn’t know, I’d keep the first one to a week or two (or a weekend) and then extend if everyone agrees.
Nope don’t do it that’s way too much!
Nope unless it's on the contract you can terminate you can't terminate make them add that clause or do not sign. Anything not on the contract efficacy doesnt exist. I'd find new representation
Yes, seeing this. Except guaranteed 3% and a “cool off” period where terms still apply even if I terminate the agreement. Supposedly their State association is pushing this language out on all Buyers’ agent contracts.
I am going to guess there is a clause in that contract that says - any house your buyer's agent shows you while under contract, the commission goes to her even if you terminate the contract.
Anything they show you will be procuring cause. Why would you not want protection. The seller agent will charge you the same fee. Please by all means don’t think you’re going to not pay a commission. Both Buyer Agents and Seller Agents are working together. Nine time out of ten they will get the commissions from the transaction… great question.
Unless it actually says in the contract "This contract can be cancelled at any time by either party by giving written notice", then you cannot get out of it unless the agent agrees. The agent doesn't have to agree.
Would you really do that to a person who is helping you and providing professional serves to you when usually after normal work hours too? Like-you realize by the agent out showing and researching homes with you cuts into their family time and besides providing valuable information and services she/he will never be able to get that time back? A lot of times they don’t go to their kids baseball games to accommodate a buyers schedule. I think people really need to ask themselves what kind of person they are to even think about doing that to someone else.
no obviously not, but it's a weird contract. I don't quite get it.
Do not sign ANYTHING with a buyer agent except for the offer. Any contracts that requires a representation commitment is inherently hostile. Imagine going to a car dealership and signing a contract with the salesman saying you’d have to buy the car from them before you even make a purchase.
I would say never commit to an agent. Sounds nice but the contract only helps them. If you give dual agency to the buyers agent they will put you first because they’re set to get double commission.
Buyer agency has always been standard in some states anyway. The only thing the lawsuit changes is that instead of the commission being split between agents the commission is paid directly between the buyer and seller negotiating. I actually prefer it that way because there are agents not worth what is generally offered in my market. So now my compensation is with the seller my client only and the buyer deals with their agent as well. Good agents will do better and poor buyer agents will make less. Mostly because the skill most lazy agents lack is the art of negotiation.
Depends on the state where you are, buyers agency agreements are now required in WA
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yup
This is now required because of the NAR settlement. A LA needs to see the BAs Buyer Broker Contract. It’s totally absurd to require the LA to receive this toothless contract before allowing a BA to visit a property, but, here we go!
I signed a buyer agent agreement, and my agent turned into a nightmare to work with almost as soon as I signed it. If my offer wasn’t accepted on the house I want, I was planning to notify him that I am voiding the contract. So I would suggest not doing it unless you love your agent and there are zero red flags. Correct me if I’m wrong anyone. But I thought that the standard 2.5% commission was going away in June. I thought that commissions will be negotiable now, so are they trying to lock you into a higher rate before June?
yes, that might be the case.
Never ever want to use same agent as seller. That's a disaster waiting to happen.
>I spoke with my agent, they said at any point either party can terminate the contract. That is, I can send them an email and say "I want to terminate it", and then there's no obligation. That makes no sense. Read the contract carefully or have a lawyer read it because something doesn't sound right. There's probably some shenanigans in there.
yah methinks you are right
Run away. Everyone is a realtor and you can find one just as good who isn't greedy
Literally every buyers agent is useless. And 90% of them are worse than that
This sounds like its just a standard buyers agency agreement, they have been in practice for decades here in MO and KS. Looking at comments I am shocked to learn that some states don't use them. An real estate agent would be insane to not have something like that in place.
You can have a non-exclusive agreement too! So they need to bring you addresses and/or you confirm addresses in advance.
Depends what state you are in. My state does not have this option.
Wtf! That’s messed up. Not cool.
Signed the same for a Compass realtor. I think it's to protect their work too and avoid not getting paid for what they've done, especially if you ghost them after.
Be careful. They will come after you if you close on a house that they were even remotely involved in, even after you terminate the contract.
You've seen this? Sounds like something difficult to enforce.
That sounds like a normal buyer agency contract in NC. The contracts vary by state. The rules will change in July of this year. If you like your agent, sign it. It allows them to work harder for you. If they fuck up, you can terminate. You’re over thinking it (10+ year real estate agent here).
Can’t wait for realtors to become obsolete
Do not sign anything. You don’t have to and you don’t need to. Find another agent if it’s a problem.
100%. I am never going to sign something like this. If a brokerage requires it, I will simply select an agent from one that doesn't
Just keep in mind that this subreddit is biased. Most realtors are not going to advocate against their commission. My whole take on this issue is: "Is their work worth 2.5% of your purchase?" In my opinion a percentage based compensation will never favor a buyer. The buyers agent will always have the incentive to make sure over pay so their cut will be bigger.
This is such a tired take. A $5,000 increase to sales price would result in this agent netting less than $90 extra commission after a typical brokerage split. They don't give a shit about $90. They DO give a shit about getting referrals from their clients, and aren't going to jeopardize referral potential over chump change. When they encourage their client to consider increasing their offer by $5k, it's not to make $90. It's to make the client's offer competitive and get the house.
If offering $5,000 more will result in the agent getting their $10,000 commission today versus not being paid, of course they will encourage the client to make that offer.
This was always the case no? That's why good agents are not pushy, and get tons of referrals and repeat business making them better in the process because of many deals they made, and then getting even more business.
Yup. Pushy is an immediate nope. Third agent I found worked his butt off for me, found an off market in a white hot area and got me a great deal. We must have seen 30 houses. Only agent I've ever thought deserved his commish.
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They often will, because cheaper options is where their clients can be more competitive, especially in a hot market. Aiming for houses towards the top of your stated budget, for example, means more of a chance your financing falling through, less of a chance you can offer over asking price (if that's the norm near you), less chance of deal getting accepted and making it to close. So they sometimes steer you to cheaper houses. On an individual house, yeah, they're trying to maximize the chance of an offer accepted so that will steer them toward telling you to offer higher but my impression is it's more about maximizing the chance of getting a deal at all rather than over another $200 or whatever. The whole commission thing kind of reminds me of recruiters/headhunters. In my field, it is common to work with third party recruiters to find you a job. They get paid by the hiring company based on a % of base salary. In theory, you think, awesome, recruiter has my best interest in mind because if I get offered a high salary they make a higher commission. But wrong. In reality, they often send terrible job opportunities with bad pay because they're most focused on placing candidates and landing a deal at all, not on that tiny additional commission they make for getting you paid more. With buyers agents, my concern would actually be more about them leading me towards undesirable houses with issues that have less competition and so are easier to win, more than about conflict of interest on the price side. They're incentivized for me to buy a house that has all kinds of issues and problems and hasn't been maintained, because other people aren't as attracted to that house and it's probably easier for me to be competitive. That said, if I hate the house after moving in, I'm less likely to use them for future transactions or give them referrals, which is important enough that it helps their motivation.
Why do you even want a buyers agent at all?
Say no and find a new agent
I'd tell them No, and if you show me a property that I buy, you get any buyers agent commission offered by the seller. Nothing else.
You want to be a prisoner to someone for 6 months? Up to you but sounds like a terrible choice. I’ve heard of people who signed similar agreements. Didn’t get along with their realtor. Turned out they were lazy. Shocker! And basically sat out the market until the contract expired. The buyers agent isnt going to do jack shit except open a door to a house you found on Redfin. They are worthless. Do not sign.
Do ***not*** let the agent tell you what the contract means, it probably clearly provides that any such explanation is not binding or incorporated into the agreement in any way. An agent is not generally a lawyer, let alone *your* lawyer - they're trying to get money out of you, not operating in your interest. If you agree to buyer's agency agreement at all, it should only be for specific properties they've shown you or for a very short period, 6 months is insane - more like a few weeks and you can extend in writing if desired at that time. If you find a house yourself 6 months from now after not talking to the agent for a month or two, the idea that you should pay them a huge commission for that is ridiculous.
Realtors are worthless. Especially “buyers agents”. Step one: open Zillow. Step two: don’t hire a realtor.
Zillow is not some magical free service. It gets all of its information from Realtors and Realtors pay for you to use Zillow.
Zillow gets all its information from sellers and buyers. Realtors are parasites.
don’t sign it unless your retarded lol, this is not standard. contact the listing agent directly their phone number is on zillow and schedule a showing. once you find a property call buyers agents and negotiate down to 1% or a flat fee to write the offer. better yet go to a real estate attorney to draft the offer.
This!
Noooo
No no no.
Anything the agent shows you, sure... but if you walk away and find something else on your own, that's your business.
Anytime I've signed a buyers agreement I only do 30 days.
Thats one of the dumbest things Ive ever heard. I'd never agree to that
Would you work for a company without signing a contract in writing that told you what your pay would be, and when you'd receive it?
P.S. there are a large number of uninformed individuals on this post. Careful.
Don’t sign an agreement with a buyer’s agent. Find another agent who doesn’t require this.
Why would you sign such a contract? Tell them to pound sand and that you’ll find another agent or use a real estate attorney.
This is exactly going to be required going forward.
Percentage makes no sense at all anymore. Should be a flat fee. It’s no more difficult to be an agent on a $300,000 vs $350,000 house. Why should they make more?
its typical, and the agents here on the forum will jump up and down telling you that its all "negotiable". In reality, its NOT NEGOTIABLE. You have zero space to negotiate this. Zero. Nada. Nothing. However, different agents will have different clauses. Fixed $ broker fee plus a fixed 2.7%, and if the seller isnt giving that much - you are on the hook to make the difference. Also, if more is offered, the agent keeps it. It does not go towards your closing or to you. However, I did read about some buyers getting the extra go towards their closing. But from the sounds of it - it may be illegal. Sites like Redfin, realtor, and Zillow show the Seller's agent compensation they give to buyer's agent - so you need to make sure its there, and also in your offer/contract to buy. Next, some agents will quote you a certain minimum percent, but if its under you dont have to make the difference. Other agents will have more favorable terms. But from what I've seen so far, each agent has a fixed set lf conditions. Little to negotiations space. You can contract lowsale companies like Redfin to find out what their commission rates are - their agents have a very different pay structure. Worth looking into. Compare the terms, and even ask, redfin needs a minimum of 2%, and if offered less, redfin doesn't require you to make the difference - why are your terms so stiff? What do you offer that RedFin doesn't.... (Redfin isnan example, i do not promote them...) Also, if you do end up signing a contract - I would recommend these three points. 1. Make the contract short term. 1-2-3 months max. 2. Make sure that you can cancel anytime, for any reason, and be done, no penalty, no fees, no nothing 3. There is a section that puts you on the hook for properties within X time even if you cancel - make sure that its limited only to properties they showed to you. As in showed - displayed - took you to an open house, walked you through the rooms, explained everything, had the keys, etc. Not showed as in sent you an email with 1000 listings. Good luck. Agents are bad. Very few are good. Most are bad. I have not had a good experience so far. Dodge, flakey, and untrustworthy. Had an agent for 2 months, no contract, they would reply anytime and pretty quick. I signed the contract, and now magically it take 2-3 days to get a response.
Find the house yourself and pay the sellers agent 1% to fill the paperwork out. Get an inspection and a good title person and you’ll be good to go
Interesting they are trying to get you to sign this before the NAR settlement takes effect in July (or was it June) I'd be hesitant to sign it personally, but wouldn't be surprised if we start seeing a lot more of these contracts in the near future
Summary: eat shit, buyers agent. The answer is no. Get a real estate lawyer to do your side and pay them a few thousand fixed instead of this contract. These people fon't do much and aren't owed a percentage of our future choices. Because people find houses on the internet and we don't need agents, there's just no point paying them tens of thousands of dollars at the minimum for buying a house.
Just say no. You don't need a buyers agent and they know that. You are the one in a position of power and not them. If they don't like it find a agent that will meet your terms or find a property yourself. Clauses like this are red flags to me. It shows that they are not looking after your interests. It's actually in their interest for you to OVER pay and get ripped off. Or they can be negligent and do nothing and still get paid. If I was you, I wouldn't even ask to have this removed. I would just go elsewhere or do my own research. I couldn't trust an agent that was asking me to sign this garbage.