Hello, I'm looking for some feedback on a buyer's agent contract I'm
thinking of signing.

1) It's asking for a 6-month exclusive buyer's agent agreement. That
seems long to me; when I sold my last house I signed a 3-month
agreement with a seller's agent. I plan on asking this buyer's agent
if he will go for a 3-month agreement. What is standard? What is
likely to be his response to my request?

2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

thanks in advance, everyone.

SB

In article .com,
wrote:
Hello, I'm looking for some feedback on a buyer's agent contract I'm
thinking of signing.

1) It's asking for a 6-month exclusive buyer's agent agreement. That
seems long to me; when I sold my last house I signed a 3-month
agreement with a seller's agent. I plan on asking this buyer's agent
if he will go for a 3-month agreement. What is standard? What is
likely to be his response to my request?


This is reasonable to ask. He will accept or refuse, depending on how strongly
he wishes to do business with you. Six months is rather long, but there's
not a 'standard'.


2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.


You want him to work for free? What he is saying is that if for some
reason the seller will not pay him, then you will have to. This seems
reasonable.


3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?


This is unusual, but what does it say the fee is for? Again, he may
remove it or he may not.


4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.


Absolutely. However, why do you care if it's more attractive to the
seller's agent? Are you comfortable with dual agency? Wouldn't it be
better to have your own agent? Are you hoping that the seller's agent is
going to give you a kickback? By the way, you are obligated to tell the
seller's agent that you are working with an agent if you are in fact doing
so. However, if there's no contract then you aren't working with anyone.


Dimitri

wrote...
Hello, I'm looking for some feedback on a buyer's agent contract I'm
thinking of signing.

First, ask for a summary of your state regulations regarding buyer's agents.
They vary considerably, and you don't want to be trapped into something that
is outside normal bounds for your area.


1) It's asking for a 6-month exclusive buyer's agent agreement. That
seems long to me; when I sold my last house I signed a 3-month
agreement with a seller's agent. I plan on asking this buyer's agent
if he will go for a 3-month agreement. What is standard? What is
likely to be his response to my request?

I wouldn't sign a 6-month agreement; 3 months is plenty. If you don't like
his performance for whatever reason, you don't want to be stuck for 6
months.


2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

Is there anything in the contract that describes the common situation where
the commissions are already included in the selling price of the house? It
appears you may be liable for a commission above and beyond the selling
price. If so, I'd be VERY wary...


3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

I haven't seen it in TX, NM, or WA.


4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

If you have already found a house, you likely don't need a full-service
buyer's agent, and he likely won't have earned a full commission, as he
would if he was working with you for 3 or 6 months. If you think he might
be of value in negotiating price & terms on this house and helping with
closing, you might try a "test case" on this particular agent, and ask what
he would charge for a 1-time consultation on the house (I've had real estate
agents try many times to gain a "one time" agreement when my house was
FSBO). Who knows... You might be able to agree to a fee ($199?) plus a
certain percentage of the savings he gets you under a particular price
point... If he simply tells you to jump in a lake, you know you need to
look for another agent anyhow.

Thanks for your reply, Dimitri.

D. Gerasimatos wrote:

You want him to work for free? What he is saying is that if for some
reason the seller will not pay him, then you will have to. This seems
reasonable.


No, I don't want or expect him to work for free. But as I said, the
contract also offers the "Seller MAY pay; Buyer is NOT obligated to
pay" option. Since, in 99.9% of the cases, the sales commission will
be standard and the seller's agent will split the fee in a standard
fashion, it's those 0.1% situations I'm concerned about. This clause
seems designed to protect the agent at the expense of the buyer. But
isn't it more in the agent's purview to ensure ahead of time that their
fee will be paid by the seller? I mean, I certainly don't have the
knowledge or means to ensure that. They are the professional in the
game, not me, and it seems part of their job should be ensuring that
they are dealing with reputable selling agents or sellers who will pay
their fee.


This is unusual, but what does it say the fee is for? Again, he may
remove it or he may not.

No, he doesn't say what the fee is for. So I have asked him that
question.

Absolutely. However, why do you care if it's more attractive to the
seller's agent? Are you comfortable with dual agency? Wouldn't it be
better to have your own agent? Are you hoping that the seller's agent is
going to give you a kickback?

None of those things. But don't you think a seller's agent dealing
with a prospective buyer who has no agent, will be more motivated to
help that buyer be successful since the seller's agent will keep the
whole commission? I once bought a house without my own agent. The
listing agent, in order to get his clients to accept my (low) offer,
knocked down his sales commission a couple of points. That's an
example of what I'm talking about.

Hi John. This is all taking place in Colorado.

John Weiss wrote:

Is there anything in the contract that describes the common situation where
the commissions are already included in the selling price of the house? It
appears you may be liable for a commission above and beyond the selling
price. If so, I'd be VERY wary...

Man, I've never heard of this (commissions included in selling price).
How do I as a buyer get made aware of this?

I do plan to ask this agent about the situation where he is both the
buyer's agent and the listing agent. According to language in the
contract, he then becomes a "transaction broker" and is an advocate for
neither me nor the seller!! How in the world can that possibly be?

Anyway, thanks for your input.

SB

writes:

Hello, I'm looking for some feedback on a buyer's agent contract I'm
thinking of signing.

1) It's asking for a 6-month exclusive buyer's agent agreement. That
seems long to me; when I sold my last house I signed a 3-month
agreement with a seller's agent. I plan on asking this buyer's agent
if he will go for a 3-month agreement. What is standard? What is
likely to be his response to my request?

Dependson the area. 6mo isn't uncommon around here, but I'd always
push for a 3mo max if a buyers agent insisted on a contract. I
bought my last home with a buyers agent without a contract with him.
He took a risk there though, but in return, I only asked him to show
me houses I was interested in buying, and only soaked up his time on
like 6 showings--all in the neighborhood in which he lived.


2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

thanks in advance, everyone.

SB


--
--
Todd H.
http://www.toddh.net/

writes:

2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

Not standard around here. I'd cross that out.

4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

Absolutely yes.

However, was this a FSBO house or an MLS listed house? If the latter,
whatever agent showed you that house has dibs on commission regardless
of whether you're later under contract with someone else. If it was
FSBo, and you don't wanna end up essentially paying your agen'ts
commission in teh form of a higher price, absolutely make that offer
prior to signing that agreement. Because if the realtor finds out
about the sale, they can and will go after that commission, and the
way yours reads, it'll come out of your pocket, not the sellers.

--
Todd H.
http://www.toddh.net/

Todd H. wrote:
writes:

2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.".

If that is what the contract literally says, then I'd find someone who
can write a contract that is clear and makes sense, as that clause IMO
is unclear and can be taken many ways. It should spell out exactly
what the commission is and say that the commission will be paid by the
buyer only if it is not paid by the seller.

I'd also find an agent that doesn't have some $199 garbage fee with no
explanation at all in a contract. Why do business with someone who
can't write a clear contract and thinks it's OK to put charges in a
contract without any explanation or justification of what they are for?







This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

Not standard around here. I'd cross that out.

4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

Absolutely yes.

However, was this a FSBO house or an MLS listed house? If the latter,
whatever agent showed you that house has dibs on commission regardless
of whether you're later under contract with someone else. If it was
FSBo, and you don't wanna end up essentially paying your agen'ts
commission in teh form of a higher price, absolutely make that offer
prior to signing that agreement. Because if the realtor finds out
about the sale, they can and will go after that commission, and the
way yours reads, it'll come out of your pocket, not the sellers.

--
Todd H.
http://www.toddh.net/

Hi.

I've read through the replies, and the only additional advice I have is
that if you are unsure about the terms of the contact, take it to an
experienced real estate lawyer and discuss your concerns before you sign.
It could be money well spent on peace of mind.



) writes:
Hello, I'm looking for some feedback on a buyer's agent contract I'm
thinking of signing.

1) It's asking for a 6-month exclusive buyer's agent agreement. That
seems long to me; when I sold my last house I signed a 3-month
agreement with a seller's agent. I plan on asking this buyer's agent
if he will go for a 3-month agreement. What is standard? What is
likely to be his response to my request?

2) The agent is asking for a fee that he says is standard in this
area (slightly less than half of the normal sales commission). The
contract has a clause that says "Seller may pay, but Buyer is OBLIGATED
to pay.". This is selected in lieu of "Seller may pay; Buyer is NOT
obligated to pay.". The latter seems more reasonable; why should I be
obligated to pay my agent the sale percentage he is requesting, if the
seller won't go with what's customary for this area? After all i
cannot comple the seller to pay anything.

3) There seems to be a "junk fee" in this contract that says at
closing, the Buyer (me) will pay the buyer's agent $199. I am going to
ask him to remove this. Is it standard?

4) I recently saw that a house I looked at months ago has a price
reduction, and I scheduled an appointment to look at it again. If I
have signed a buyer's agreement at the time I look at this house, am I
obligated to tell the listing agent that fact? What happens if I
decide I want to buy this house? I'm thinking I should look at it
again BEFORE signing this buyer's agreement, so in case I decide to
make an offer, it will be more attractive to the seller's agent.

thanks in advance, everyone.

SB

wrote...
Hi John. This is all taking place in Colorado.

Man, I've never heard of this (commissions included in selling price).
How do I as a buyer get made aware of this?

I do plan to ask this agent about the situation where he is both the
buyer's agent and the listing agent. According to language in the
contract, he then becomes a "transaction broker" and is an advocate for
neither me nor the seller!! How in the world can that possibly be?

Real estate law has evolved toward consumer protection over the past 10-20
years, but it is still very localized. What is true in WA or NM may not be true
in CO...

In all listings I have made as a seller (WA, VA, TX, NM), all realtors'
commissions were included in the selling price and were deducted from the
seller's proceeds at closing. The standard language divided the commission (in
the 6% range) equally between the buyer's and seller's agents. It is all
transparent to the buyer.

In all cases where I have bought a house, I have paid no direct commissions.
All were treated as above.

In WA, the agent retained by a buyer now has a fiduciary responsibility to the
buyer. The real estate firms I have dealt with will assign a separate agent in
the case where a buyer bids on a house where the buyer's agent also happens to
be the listing agent.

I don't know if you really need to "hire" a buyer's agent in CO. You better ask
around at a couple large real estate firms...

In article .com,
wrote:
D. Gerasimatos wrote:

You want him to work for free? What he is saying is that if for some
reason the seller will not pay him, then you will have to. This seems
reasonable.


No, I don't want or expect him to work for free. But as I said, the
contract also offers the "Seller MAY pay; Buyer is NOT obligated to
pay" option.


Why would a buyer's agent in his right mind want to choose that option?
That would amount to a risk of working for free. Right?


Since, in 99.9% of the cases, the sales commission will be standard and the
seller's agent will split the fee in a standard fashion, it's those 0.1%
situations I'm concerned about. This clause seems designed to protect the
agent at the expense of the buyer.


Yes, it is. However, does it seem unfair? I think you would agree that
it it would be fair to pay him for services rendered. So what's the
problem with the clause? Are you hoping that in that 0.1% situation
you won't have to pay him?


But isn't it more in the agent's purview to ensure ahead of time that their
fee will be paid by the seller? I mean, I certainly don't have the
knowledge or means to ensure that. They are the professional in the
game, not me, and it seems part of their job should be ensuring that
they are dealing with reputable selling agents or sellers who will pay
their fee.


No. If the agent finds a property through, say, the MLS then all is well,
because the selling broker is offering part of his fee for finding a
buyer. However, what if he finds you a house that's, say, For Sale By
Owner? How can he ensure ahead of time that that owner is willing to
pay? All he can do is have *you* sign a contract saying that if the
owner won't pay then you will.



This is unusual, but what does it say the fee is for? Again, he may
remove it or he may not.

No, he doesn't say what the fee is for. So I have asked him that
question.


What was the answer?


Absolutely. However, why do you care if it's more attractive to the
seller's agent? Are you comfortable with dual agency? Wouldn't it be
better to have your own agent? Are you hoping that the seller's agent is
going to give you a kickback?

None of those things. But don't you think a seller's agent dealing
with a prospective buyer who has no agent, will be more motivated to
help that buyer be successful since the seller's agent will keep the
whole commission?


What do you mean by 'be successful'? If you mean 'make the sale' then
yes. However, working hard to make the sale may not be in your best
interests. I am not saying that dual agency doesn't ever work, but as a buyer
I think I'd rather have my own agent.


I once bought a house without my own agent. The listing agent, in order to
get his clients to accept my (low) offer, knocked down his sales commission
a couple of points. That's an example of what I'm talking about.



Right. A kickback, like I said.


Dimitri