Should we have a buyer's agreement with our realtor?

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My husband and I are looking to buy a home in the near future. Our realtor is pressuring us to sign a buyers agreement before making an offer on a house. We have never used this type of agreement before and aren't sure of the benefits. From what I have read it sounds like just another way for the realtor to make money. Does anyone have any advice?
should we have a buyer s agreement with our realtor, real estate
  27 answers
  • EXIT Realty Preferred EXIT Realty Preferred on Apr 09, 2014
    I can only speak from how things are in NC but a Buyer Agency agreement protects the buyer. Until under buyer agency the agent is representing the seller.

  • Lela Lela on Apr 09, 2014
    It's been awhile since I had my Lic, so I dont remember everything, But do some research, talk to other Realtor's & if this one is putting pressure on you and you're uncomfortable, walk away. You can also contact the local board this Realtor is with and talk to them (you dont have to name names)..... .. Good Luck !

  • Diane Woods Diane Woods on Apr 09, 2014
    By signing a buyers agreement you are having the Realtor work for you. The agreement enforces feduciary responsiblities, meaning they have to have your best interest as a priority…kind of like hiring a lawyer. They have to be loyal to you, do what you ask, maintain confidentialy, etc. They negotiate on your behalf, do research about the home for you, make sure the transaction goes smoothly, and make sure you get the best deal. Of course they would want to be paid for their time. In our state, the seller is responsible for the Realtor fees, so most likely this won't affect you financially to use a Realtor. Our broker (company) does not allow us to make an offer on a house for our buyer without a buyer representation agreement. Is assures everything stays professional and everyone knows where they stand. Realtors watch out for problems and guide you how to avoid or fix them. Be aware that if you walk away from this house, in most cases you still maintain the same Realtor, no matter what house you buy.

  • Jessie Jessie on Apr 11, 2014
    Never, it's like saying I will only shop at Walmart !

    • Diane Woods Diane Woods on Apr 13, 2014
      @Jessie I'm not sure I even understand what you mean. Realtors have access to the database of ALL houses listed for sale in the multiple listing service…where all Realtors enter their properties. We don't just sell inventory of our listings. As a matter of fact, Reators talk amongst themselves constantly searching for property other agents have listed, or know are coming on the market that might fit the buyer clients they are working for. I see houses sell a lot like thise, even before they are advertised a day on the market. Another reason to have a agent represent you as a buyer.

  • Legalities concerning these agreements vary state by state and the agreements themselves vary between agencies/brokers. Our Broker also does not allow us to present an offer on behalf of a Buyer unless we have a signed Buyer's Exclusive Agency Agreement, as well as a lender pre-qualification. Our agreement protects the Buyer by expanding upon the agent obligations already listed on our state's legally-required agency/dual agency agreements, which must be signed by the Buyers, Agent, and Broker. Additionally, it contains a time limit, property description criteria, price and area range, commission clause, and escape clause for both the Buyer and Realtor in case of irreconcilable differences. The Buyer is assured the Realtor will perform the listed obligations using all resources at their disposal and to the best of their abilities. If they fail to perform, barring uncontrollable outside factors, the Buyer can void the agreement. Likewise, the Realtor is protected from Buyers walking away from the professional relationship established, because they don't like a particular outcome, IF the outcome is proven to be beyond the control of the Realtor. Realtors are not compensated for any time or expenses until after closing, so the Exclusive Agency Agreement provides them some assurance that they will be paid for their considerable efforts, as long as they do their job to the best of their abilities and meet or exceed their clients expectations, as clarified on the agreement. The agreement we use is drafted in such a way that it provides a win/win for all parties involved. I second the recommendation that you do your due diligence by consulting with your state's real estate commission and others as you see fit. In closing, I will add that I never pressure a client to sign any document. I am honest and straight-forward about the documents they are required to sign, and which are optional, making sure they understand exactly what each document says and what it means to them. I wish you all the best in reconciling this situation and buying the home that is right for you and yours!

  • Jessica C Jessica C on Apr 11, 2014
    Thanks so much for all the information, it's been very helpful!

  • Bobby Dee Bobby Dee on Apr 11, 2014
    If you want the real estate agent to represent you and safeguard your best interests, this is the way to go. Most of the time, the agent is paid by the seller when she/he brings the buyer anyway, so you get the benefit of her/his representation for free. If the agent is representing you, they are responsible for verifying the information the seller or seller's agent gives you, basically watching your back. And since he can show and sell you anything that is listed no matter what agent it is listed with, it's not limiting you to only houses listed with him or his office, so it's not really comparable to only shopping at Walmart :)

  • Fred Van Allen Fred Van Allen on Apr 11, 2014
    Seasoned, experienced agents use them, to the benefit of themselves and their buyer. Newbies don't use them.

  • Sandy Rudolph Sandy Rudolph on Apr 11, 2014
    Basically, it means the Realtor will get paid if you buy a home, even if you do not end up buying it from him.

  • Diane Woods Diane Woods on Apr 11, 2014
    I think you have to understand real estate agents can only work for one 'side' at a time. I can list someone's house for them, and can only represent that seller in a transaction because I work for them. If someone approaches me to help them buy a home, that is my role with them. I cannot change sides. I show them all houses that fit their needs. I am not allowed to sell my own listings, as a matter of fairness and legality. Using an agent is for your benefit, research proves it.

  • Jeanette S Jeanette S on Apr 12, 2014
    This is a new thing since I was in the buying market years ago. If you feel uncomfortable, read carefully what you sign! Some of these agreements are nothing more than you have to pay that realtor a commission whether they find you your house or not. Sometimes you can work with an agent a few times but they do not seem to be able to find exactly what you want...you need to be able to walk away and look for another agent. Don't obligate yourself to one agent too quickly...there are a lot of great people out there to help you.

  • Mary Mary on Apr 12, 2014
    I believe the agreements I have seen require the buyer to pay agent for any purchases even if purchasing a for sale by owner. I would never sign one just for the fact that the realtor may not find what you want or they may not fit you as a buyer. Some don't work that hard and leave people hanging. Some are amazing and work like crazy. You need to be able to choose another realtor if the one you have isn't working for you.

  • Trish Trish on Apr 12, 2014
    Your realtor is "pressuring" you to sign an agreement? Find another realtor!

  • Jonda Jonda on Apr 13, 2014
    Never!! I have had realtors who want yin to sign these and then they get lazy ...I would find houses they didn't fund or look for

  • Jonda Jonda on Apr 13, 2014
    Never sign these. Realtors want you to sign these and then they get lazy. I would find houses they didn't find or look for. But then they get paid for me finding the house I found. I say if the realtor finds me a house they deserve the commission. But if I do extra work and find a house that they should have found and shown me to begin with and I bring it ti them...why should they makevthousands of dollars

  • Real estate transactions and professionals are governed by national and state laws, as well as rules and regulations of state real estate commissions and local real estate boards. State laws vary on certain issues from state to state. Dual Agency (the legal responsibility of an agent or Realtor to represent both the buyer and seller in a transaction) may not be allowed in TN, but is allowed in many states. As a Realtor, I take Dual Agency (allowed in LA) very seriously, because all parties are depending upon me to represent their interests and negotiate a fair and legal transaction to the benefit of all involved. Additionally, as corrective response to problems with Dual Agency in the past, these professional relationships are very closely monitored by governing authorities to ensure compliance and proper representation of the parties. Buyers and Sellers know up front that I am representing both of them and agree to same in writing. I find that I am able to negotiate better deals for all concerned, because I know each party's situation and what is most important to them. I am not allowed to disclose anything about one party to the other, unless given express permission to do so. However, I may know that the Buyers will not have a lot of extra cash to purchase appliances after closing and that the Sellers have already picked out appliances they want to purchase for their new home. Without disclosing personal information, I can enhance the bargaining position of both parties by negotiating that the Sellers include the home's appliances in the purchase price, rather than lower the price of their home. The Buyers like it because, in their situation, a higher mortgage is not an issue, but the upfront expenditures are. Likewise, the Sellers may prefer to get more cash out of their home and to allow them to purchase the appliances they want. If it's a win/win, we do it. If not, we don't, because all parties must benefit and agree to the terms. @Jonda , I'm sorry you have apparently had a bad experience. Finding the right home for Buyers is the easiest, and most fun, part of the process. Over 85% of Buyers shop online before contacting a real estate professional, and yes, sometimes they find the home they wish to buy. That's just the first step. The agent/Realtor is the coordinator of the transaction, making sure the mountain of paperwork flows according to numerous deadlines and verifies all of it is correct. The Realtor orders, coordinates everyone's schedules, and attends various inspections (of the home itself, termite, septic, site surveys...), coordinates the appraisal, researches and helps correct any issues that (usually) arise, sends or delivers lots of documents, goes to the courthouse to pull legal documents, provides all parties with necessary information, and is the one person everyone from the septic vendor to the attorney calls anytime they need something, because they know the Realtor is the only one who doesn't get paid until the deal is closed and will do whatever it takes to make it happen at the wishes of all parties. The Seller pays the commission fee and the Buyer benefits from free representation by the agent/Realtor, which ensures they are legally protected throughout the process. The commission is split between the agents and each of their brokers, so my portion of the full commission is much smaller than you might think. I work 14-16 hours, 6-7 days a week, and honestly earn every commission dollar, from which I pay all of my own expenses. I'm explaining, not complaining. I LOVE my chosen profession, but it is widely misunderstood and not for the feint of heart. I've read that less than 35% of those who enter the real estate profession are still active after one year and that appears to be accurate based upon what I've seen in our market. @Jessica C the bottom line is that you need to carefully read the agreement your agent or Realtor (yes, there is a difference!) wants you to sign. If you are uncomfortable with it or don't fully understand all of it, you should have it reviewed by LOCAL legal counsel or ask your state's real estate commission to review it for free. Also, understand that agents sometimes put in untold hours of work on behalf of clients, who for various reasons, don't buy or sell a home and for which they are never paid. It's only natural that we want to protect ourselves from lost, uncompensated time. However, you need to protect your interests and if you are not completely comfortable with your agent/Realtor and don't fully trust that they are advocating for you, you should find another with whom you have a better rapport. I wish you all the best and hope you find the home that is right for you and yours!

  • Diane Woods Diane Woods on Apr 13, 2014
    I'm sorry some have a negative opinion of a real estate agents. Just like any profession, there are good ones and bad ones. Some agents are more concerned about churning through clients and just making money. You need one that is in it to help people, not just sell brick and mortar buildings. A Realtor's job isn't just to find and sell houses. There are inspections, mortgages, zoning, contingencies, repair issues, laws, etc. Even if a buyer finds the home they wish to purchase, that's only a fraction of the transaction. Remember you have power in the agreement you sign too. If something is in it that you don't like, you can change it, add a clause, have it reviewed by an attorney, etc. It's a mutual agreement, not just a one way to benefit the Realtor. If you are unfortunate to get Realtor that isn't doing his/her job, they are not lliving up to the agreement, and you can get out of it. You can write the agreement with a time limit, to be used only for one property, exclude FSBO's, etc. There are different types of buyers agreements, and you can write in an escape clause in any one of them. It's a mutual agreement, and you should use it to your benefit. It's protection for you and should have your best interest included. If you find a FSBO that you end up buying, in many cases the seller still pays a Realtor fee. Quite honestly, in this situation a Realtor can be even more valuable. There is not a professional representing the seller, so the buyers agent steps up even more to make sure the process is done legally, and in their buyers best interest. The seller of the home may be fending for himself. I hope the process goes well, and you can pass on that there are some good hearted, hard working Realtors.

  • Fred Van Allen Fred Van Allen on Apr 13, 2014
    In SoCal, we have two types, one is an exclusive buyer agent relationship, the other is agent gets paid for just showing the houses with the buyer.

  • Jane R. Jane R. on Apr 14, 2014
    Don't sign anything with a realtor. It limits your ability to shop around and purchase from whoever you please unless he gets paid a commission. You can look at all homes for sale on any realtors site without his help. However he might be able to find what you're looking for quicker than you can. I prefer to shop around on my own.

  • L L on Apr 15, 2014
    We started looking for a new home a year ago. The realtor that we had, showed us many, many homes for sale. Plus we got new listing immedately from his office. Not once did he or his company ask us to sign with them as an agent, until we put an offer into a home. At that time, we were asked to sign with this agent, as he would be continuing to help us through the buying process. You basically are locked into not looking at homes from other agents. If that home fell through, we were locked into that agent for 4 months from the date we signed. Are you looking to buy a home very soon? A lot of time and effort goes towards a realtor. And only gets paid, IF you buy a home. We did much of the searching ourselves without our agent, just driving by, stopping at open houses, but never told anyone how serious we were in purchasing a home. That way, realtors that we met left us alone. With the days of MLS via internet, buyers can now look themselves online if a home appeals to them. It takes a realtor to set up the appointment to show you the home and represent you, if you decide to put in an offer. Let us know what you end up doing.

  • Lilo Clacher Lilo Clacher on May 25, 2014
    I'm a Real Estate agent in Southwest Florida. I have never ask my buyers to sign an agreement. The way I feel is that if I give my all to my clients they will buy through me. Worked for me for 18 years and haven't lost a buyer yet.

  • Michele Webler Michele Webler on May 29, 2014
    There are pluses and minuses to a buyers rep agreement. As an agent (and I'm not a lazy one) it does help protect a lot of your hard work. I don't usually ask for one until we are ready to make an offer. Some brokers (my boss) do require one to come in with the offer. So that sometimes depends on the brokerage and there policies and it can change between states or offices. I'm dual licensed in 2 different states and the rules and required paperwork are totally different in the 2. On both of my states you (the buyer) can determine how much lea way to give on one whether it is for a "specific" property, certain locations certain time frames etc. And you as the buyer can always "fire" your buyers agent at any time. So if you get stuck with a lazy one by all means fire it. For those of us that are not lazy nothing worse then to gather a ton of information for someone send them properties for a year and then have them go cheat on you and make an offer with the first open house they walk into with an agent that they have never talked to. That is very disappointing as no house closing no paycheck.

  • M.s.Woods M.s.Woods on Jan 17, 2016
    I wouldn’t sign a buyer’s agreement. That can limit you to using one agent to find your home. However, if you intend to use more than one agent to show you properties, tell each agent of your intention to use other agents. That’s the fair thing to do. It gives each agent a chance to decide if they want to work with you knowing that they may lose any chance of being compensated for the time they spend scheduling showings and touring properties. REALTORS that can afford the loss, if you purchase with another REALTOR, will take the risk and show you homes. Those that can’t afford the loss, will find someone else to work with as a buyer’s agent.

  • Gerald Bouthner Gerald Bouthner on May 09, 2016
    Not all Realtors require a Buyers Agreement from their clients. There are tons of Realtors that will represent you without that requirement. If the services provided are professional, timely, satisfactory, there would be no reason that I can think of that they would lose you as a client. Realtor should just make it known how the process works. That they are on commission, will work hard on their clients behalf, won't get paid unless in the end you use them.

  • JD Powers JD Powers on May 14, 2016
    I am a Realtor in NC , by law if we work with a Buyer we are required to sign a contract agreement in order to make any offers on any property, now that doesn't mean you have to sign an "exclusive agency" agreement, there are contracts out there that say you are using this agent to represent you on this 1 property. It doesn't have to be a 1 year, 6 months or 3 month contract ... You can tell your Agent that you only feel comfortable with signing a contract with them for the amount of time it takes you to close on the property you choose to buy. If you feel that your Agent is "pressuring" you to sign a contract, it is possible that it's just the way their firm has taught them to do business. You need to find out what the Firm's policy is on representation. Keep in mind, in some states if you do not have a signed contract with a Realtor then that Agent works for the Seller and has no obligation to keep your best interests in mind. You don't want that, you want an Agent who will represent you in the fullest capacity. If you sign a contract with an Agent and you end up not liking your Agent ask for a Termination of Contract, if your Agent refuses to let you out of your contract ... You #1 don't ever have to work with them if they are that dense #2 go to the firm's Broker and ask them for the Termination agreement. I personally do not ask for a signed contract with a Buyer until they tell me they want to hire me or we go to a house they want to write an offer on and I explain to them that signing a contract with me means that I will represent them as their Agent and do my best to get everything they need in the contract and negotiate for them with the Sellers Agent. In NC, we have a form that is not a contract called "Working with Real Estate Agents in NC". This form requires a signature of the Buyer or Seller, but it only is an admittance that the Agent has described Agency Relationships in NC. It clearly states "This is not a Contract of Service" ... It still throws people off and they refuse to sign, but if the Agent tells the Client about the form correctly then the Client or Prospect will not be so reluctant. I have been a licensed Agent in NC for going on 14 years and our laws change, but they are there for everyone's protection, the Client and the Agent. If you don't feel comfy with your Agent, find a new one. You'll see that many, if they are following their laws will ask you to sign a contract to legally represent you, when they ask is all a matter of judgement or their Firm's policies. Good Luck to you and get good representation from someone you like and trust will get you what you want in your next home!!

    • See 1 previous
    • JD Powers JD Powers on Jan 01, 2017
      Your Agent probably sent you forms when you made the offer to buy the home you're closing on. It is NC law to have #1 the Working with Real Estate Agents form signed within 3 days of contact with any Client and #2 it protects the Agent and the Buyer during a sale to have the representation form (Exclusive Right to Represent Buyer) completed so that nothing happens during that sale that might hurt or hinder the sale. I'm sure you signed it. Ask your Realtor for a copy. If your Agent isn't a Realtor but a licensed Agent they may have asked you to sign a different form but you should get a copy.

  • Harold Allain Harold Allain on Dec 31, 2016
    Yeah! My friend has also recently hired a Realtor and he didn't required any buyers agreement. They represent you with out that too. Agents like http://century21cedarcrest.com/selling-home-property-essex-county-nj/ helps us to buy property in different states and regions.

  • Lynne Webb Lynne Webb on Jan 01, 2017
    That realtor wants to get paid for his/her hard work. Without a signed document, she has no contractual agreement. If you like working with her, and she's doing her job matching you with the best house for your buck, you should enter a contract with her. At closing, and only then, will she earn her keep. Though I am not a realtor, it's a hard job keeping the peace between buyer and seller and making sure all the i's are dotted and t's crossed. She's working in your behalf. She's in your corner.