Buyers pushed into signing agreements with realtors

May 27 2008 by Ellen Roseman

In my latest class, Buying the Right House at the Right Price, I talked about how you can get better representation from real estate agents if you sign a contract to work with them exclusively for a specific period — say, two to to three months.

You can work with other realtors during that time. But the agent legally bound to represent you will earn a commission on any deals you make, even if not involved.

Some people in the class said they felt pressured to sign buyer’s agreements right away. Then I heard from someone who had agreed to sign an exclusive contract with a real estate agent that lasted for more than nine months.

This seemed to me an abuse of a system designed to improve life for home buyers. And in her case, there was an ethical issue about how the contract was prepared.

Here’s the story below. I’d like to hear what you think.

17 comments

  1. Another Realtor

    Jun 4 2008

    Though I’m glad to see that other Realtors are using the Buyer Representation Agreement, either a relationship is working or it isn’t.

    Has the original poster actually spoken to her/his Realtor and told them that he/she isn’t happy, and that the “more than six months” box wasn’t initialled as it should have been?

    I used to work without these agreements. No more. That being said, if someone who has signed the agreement told me that they weren’t happy with my services, I’d either let them out of it, or see if they’d like to work with someone else from my brokerage. There’s no sense working with someone that doesn’t like you – but the lines of communication have to be open.

    If you don’t tell me you’re unhappy about something, I have no way of knowing otherwise.

    That being said, the document in question is very intimidating to the layperson. If you’ve got questions about it, ask before signing it. There are too many sleazy Realtors out there – just in it for what they perceive as big easy bucks. You have to be careful who you sign anything.

  2. Lynn

    Jun 7 2008

    I was lucky when I bought my condo. I dumped realtors who wanted me to sign 3 month contracts with them.

    I found a great realtor (from a major realty company) who only required me to sign agreements on condos I was making offers on, saying that she was representing me on the purchase of that specific condo.

  3. tom

    Aug 15 2009

    Realtors live in lala land. Buyers contracts are not enforcable by law. You cannot change the laws of your region no matter what industry you are in. Fact of the matter is a person can fire a buyers agent or terminate a sales agreement with a simple YOU’RE FIRED. Thats the law. No act or realtor self help group overides the law. The only thing that can bite you is when one realtor shows you a property and you buy from another realtor. Obviously thats fishy. However if you have a buyers agreement with a realtor who keeps showing you bad areas of crap houses – or worse – wants you do send them listing you want to see – you can fire them and buy whatever you want. The buyers agreement is only good for properties they introduce you to. You could be visiting a property with your buyers agent, excuse yourself and go view a house accross the street and they get NOTHING. They must introduce you. So feel free to fire an agent that isnt working and go somewhere else. If they cause problems down the road, and some do, sue them. Realtors cannot make up new laws. All contracts fall under contract laws of what is legal and enforcable. Just like any service – you can fire whomever you like for non performance. It might say 180 days on teh contract but so what? If they are not performing you give them notice of termination. Thats the end of that in the eyes of the law. If you go and buy something they showed you then you have a problem. They showed you and they should get paid. If you go out, start fresh and buy they have no legs to stand on as you found your own property. Its just like when store make up return policys. Fact is all juristictions will have laws about theis that all merchants must follow. If there is a return policy by law than you cannot legally say \no returns\. Same thing. WHat happens here is realty agencies bully people who are ignorant. You can sue them when they act like this and the more the harass you the more legal clout you will have. Hit them hard. Any agent worth their salt will not want a buyers contract. For one good reason. They will feel you out while you feel them out. If you go out a few times and its not working a good agent will have no desire to waste their time either. Bad agents love contracts. They promise the moon and then goof around. They get you do look thru the MLS and email them. These clowns should be erradicated. If a brokerage hires them that brokerage should be avoided. Remax for instance aquires smaller firms and with them lots of rodents – in my opinion.

  4. Frustrated

    Aug 26 2009

    Our agent Jeff B promised to help us with closing costs but we have not seen any money from him yet. It has been a month since our closing and he is avoiding calls from us.

    He pressured us to sign a contract with him to make him our buying as well as selling agent. We ended up purchasing a brand new construction and it cost us 3.5%, even though ususally new construciton does not require a buying agent.

    We could have saved a lot of money if he had not locked us into that contract. It was very unfair of him. He also suggested we use his lawyer and the trusting people that we are, we agreed. He told us it would be $1,500, but it ended up being $3,800.

    Can we pursue any legal action?

  5. Jenny

    Mar 29 2010

    I am not happy with our realtor. We just recieved an e-mail to sign a transfer of listing, as our current listing broker is selling to a different broker.

    Could I not sign? Would this give me a chance to let go of this realtor?

    We signed a 6 month listing, which still has 3 months to go. We need to find a realtor that can work to sell this property.

  6. Terry

    Nov 5 2010

    We moved the in-laws from Ont and have power of attorney. We then we refurbished their house and signed a exclusive contract with a realtor outside of the area. After several mistakes, such as, realtor listing it sight unseen at too high of a price, then the realtor took close to a month to correct the re-listing price.

    The realtor’s in the area wouldn’t show the place even to a per-qualified buyer. When we finally get a per-qualified buyer in and bidding, our realtor failed to let this buyer know that we (realtor and us) had worked out a way to accept his last offer. Since she was acting for both, she had agreed to reduce her commission by 3 thousand, we never heard anything about this again. We also asked about 15 questions about closing costs we should know about along with advertising and the lack of it. We were ignored.

    Another buyer offered a good deal with a 6 week waiting period to closing while they do the usual finance and home inspection that should have been done in 3-4 weeks. The buyer does the home inspection on the 22nd, when all their conditions should have been already met. They then ask for an amendment to the contract adding a buyer as the bank wanted them on the title, there was no mention at anytime about more time being needed.

    The buyers then came back asking for 2 more weeks meaning the closing date doesn’t change just the financing completion due to there lawyer being busy. They stated the lawyer in the town was not being co-operative and stated he was too busy. We told them they had more than enough time to contact another lawyer and that 2 more weeks was unacceptable. On the 1st. The finally show proof of financing recognizing the 19th. As a closing date. Again we were ignored.

    We are the only ones being hurt with making payments instead of paying off mortgages, line of credit, etc… After asking our realtor to go and ask for costs she refused and told us to sue them for our 2 weeks we’ll be out and then had informed me that by not signing the new amendment we are holding things up and can be held liable for their costs.

    Our realtor then suggested we call the buyer’s realtor and talk with them and see if we could come to an agreement. I couldn’t figure out why she was suggesting this as this was her job to be the go between and the person who has the know how.

    When this didn’t work she called our lawyer/notary and had her call and pressure us. While we were still trying to decide on what to do, our realtor using emotional black mail, called the gentleman (who is looking after the house) to have him call and ask our in-laws to sign the deal behind our backs and not to talk to us at all.

    We emailed the realtor and her boss letting them know that we are going to file a complaint and that the buyers should have had it together before now and for not dealing in good faith. We would sue for cost plus if we had to settle for less than the agreed amount since it is so late in the year.

    The owner of our realtors company calls and explains that because they failed to meet their conditions on the 22nd, the deal was null and then proceeded to tell us that we didn’t agree to the extension for their financing that it was again null and no one could sue any one.

    I told him that all this didn’t add up and we should have been informed of this earlier. He agreed that both realtors has made many mistakes and he didn’t understand why our realtor did what she did. The owner said the closing date was unreasonable and they should have known this in the first place.

    Meanwhile our realtor had told us this should have been closed long time ago and that we had made no mistakes at all. At this point I was to confused, I told him we will sign based on his information but are going to file a complaint with the real state board and contact a lawyer about the actions in this mess.

    I then realized that we did agree to their financing amendment but not to the amendment where it is OK for them hire a lawyer when every one knew they couldn’t close by the date they had asked for and agreed upon in the first place.

    Can I go after the realtor for bad faith and breach of contact? What can I ask for in damages? What other resources can I contact for satisfaction?

  7. FirstTimeBuyerFlorida

    Jan 13 2012

    I recently started looking for a home in Florida. I contacted an agent requesting information on a particular house. The agent then emailed me a Loyalty Agreement and said if I wanted to work with her to sign and return. I could not find anything on the internet on this type of agreement and It looked harmless so I signed it and returned it to her. I am regretting the decision now and am being told by the realtor that they will recieve a 25% commission if I go to a different realtor. Here is the agreement I signed. Is this legal and there are no dates, so it last forever? I can never purchase a house through anyone else?

    Christina Daniels’ Loyalty Agreement
    My duties to you:
    1. I will respond to your phone call or email within 24 hours.
    2. When I am not available, there will always be a Panama City Real Estate Team member available to assist you.
    3. I will always be honest with you.
    4. I will search the MLS daily and inform you of all new homes that meet your criteria.
    5. I will contact you frequently & keep you updated throughout your home buying process.
    6. I will provide you with a list of qualified lenders/vendors.
    7. I will guide you through the contract and closing process including monitoring deadlines, the home inspection, and negotiations on your behalf.
    8. I will provide you with an experienced closing coordinator to ensure a seamless and smooth transaction.

    Buyers Obligations:
    JUST CALL ME IF YOU FIND YOURSELF INTERESTED AFTER:
    • You hear about a property for sale
    • You see a sign – For Sale by Owner or Any Other Realtors’ Sign
    • You want to visit any open house
    • You see an ad
    • You want to tour a new construction project

    Agent Signature: _______________________________
    Buyer Signature: _______________________________
    Date: ________________________________________

  8. Win west

    Feb 15 2014

    I signed a buyer’s agreement with my agent, but then I found a property listed on the MLS by Comfree.

    I am dealing directly with the owner of the property. The real estate agent has not been involved through any part of the process.

    Do I have to disclose the buyer’s agreement to the seller/owner? Please respond.
    Win

  9. Ellen Roseman

    Feb 23 2014

    Hi Win, if you buy the house from the person selling through Comfree, the real estate agent will insist on getting a commission because you signed an agreement for exclusive representation (even though the agent didn’t do any work).

    Agents learn about house sales through the Multiple Listing Service. And if they are representing you, they will demand that they get a commission, which usually comes out of the selling price.

    so, yes, you should tell the seller about your buyer representation agreement, since you may have to submit a higher bid in order to pay the real estate commission.

  10. Taylor

    Jan 14 2015

    I’m a first time home buyer and new to the whole process, so I ended up signing a buyer’s agreement. I thought it was normal, but after doing more research, I regret the decision.

    The good thing is the agreement expired recently and I want to look for a new realtor. I would stay with my current realtor, but I started looking in an area he is unfamiliar with and I feel like I am doing all the work, just short of going inside the homes.

    Since the agreement has expired, I assume I can freely look for a new realtor with a different brokerage firm. However, I want to make sure there isn’t anything hidden in the agreement I may have overlooked.

    Is this something I should have a lawyer look at before finding a new agent or am I free to look for a new agent?

  11. RK

    May 5 2015

    What is the maximum length of an exclusive buyer’s agreement? I signed one more than a decade ago and do not remember the terms

    Thank you
    RK