Buyer's agent concerns?

[JimGa]

Hello all,

I have been working with an agent for around 5 months now and I have some concerns that I wanted to bounce off everyone. I am a new investor in real estate and found a local agent to help me find properties and to educate me on the market I am targeting.

My main concerns are these:

1) This agent failed to inform me that I would need to sign a formal Buyer's Agent Agreement (BAA) for her to act as a BA for me. I made it clear from first contact that I wanted a buyer's agent and she said they provide that service but never mentioned an agreement. That means she was essentially representing the seller/listing agent on any properties I inquired about over the 5 months. I was finally informed of this when another agent she works with met me at the second property I checked out.

2) Once I got a BAA from her it includes some questionable content. My two concerns are that if we got to contract on a home and I back out I have to pay whatever her commission would have been on the sale. Another is that she gets a commission on any property I find and purchase even if I found it on my own. Are those normal requirements in typical BAA's?

I just want to make sure things are legit before I proceed with this agent any further. Any advice would be greatly appreciated.

Thanks,

Jim

[Micheal Pannell Realtor]

1) This agent failed to inform me that I would need to sign a formal Buyer's Agent Agreement (BAA) for her to act as a BA for me. I made it clear from first contact that I wanted a buyer's agent and she said they provide that service but never mentioned an agreement. That means she was essentially representing the seller/listing agent on any properties I inquired about over the 5 months. I was finally informed of this when another agent she works with met me at the second property I checked out.

You dont have to sign anything for them to be your buyers agent. I dont make anyone sign anything

[JimGa]

Thanks Michael - I was told that any agent that I engage here automatically represents the seller's interest unless I sign a BAA with that agent. So if I want someone to represent my interest I would need a BAA.

Jim

[u2man]

Yes - pretty standard. Anybody can find a property on the mls or on their own. Shouldn't you be paying her for her expertise whether you find the property or not?

In most states the agent does represent the seller until a baa is signed. Alot of buyers want it both ways....not signing anything and representation.

Btw, five months seems like a long time that this agent already has invested into working with you (for free?) She shows you x amount of properties and then you find a property and she doesn't get paid?

[JimGa]

Yes I agree on using her expertise and her getting paid whether I find it or not. I am working with a consultant who use to be an attorney and that part bothered him more than me.

I don't mind signing a BAA and actually prefer to but just want to make sure I understand it completely and don't get screwed over. My main concern is the part that says I have to pay her commission if a deal falls through. It seems that in that situation the issue is b/t the seller and buyer and they can sue me but to have to pay the buyer's agent commission seems a little shady. I guess that is typical though.

Thanks,

Jim

[MLS Guru]

If the deal falls through and it's not your fault I don't see why you'd have to pay, but if you back out for no reason she still earned her commission.
That's the way I read it, this is not legal advice, ask your attorney to explain the wording to you.
Good luck finding the right property for you.

[JimGa]

You are correct and I was not specific on my second posting - the BAA states that if buyer backs out of contract then the buyer is responsible for paying the agent's commission.

I am assuming that is typical of most BAA's but wanted to confirm with others out there.

Thanks,

Jim

[RyanRE]

Jim ~ It might depend on the state, but I am pretty sure that the buyer's agent would represent you exclusively on all properties unless they showed you listings that they already represented the seller on. As far as your 2nd concern goes, I am not so sure that it is standard for you to pay the buyer's commission if you back out unless you breach the contract.

Regardless, I think that you made the correct move by contacting your attorney with your questions. Keep in mind that agents on this forum are not qualified to give you specific legal advice. However, we can point you in the right direction.

Good luck finding a great deal on a property.

[Morristown]

You are correct and I was not specific on my second posting - the BAA states that if buyer backs out of contract then the buyer is responsible for paying the agent's commission.

I am assuming that is typical of most BAA's but wanted to confirm with others out there.

Thanks,

Jim

I have been licensed in 2 states, and the language that you are pointing out is standard on the BAA in both states, though from what I know, it is highly unlikely that it is enforceable except under the most extreme situation. In any event the REALTORS broker would have to take you to Court, and that would be highly unlikely considering the broker and his/her offices reputation in the community.

Jim

[SLP-NYCT]

Jim,

You did leave out some important details like...WHAT STATE are you in?? In NY, YOU MUST sign a document indicating how you want the agent to represent you because by default, we represent the Seller. This document is not a BAA or in my case a Buyer Agency Contract or BAC, that is a totally separate document that clearly states the terms of the arrangement. I would not work as a Buyer's Agent without one because that way we each have a clear understanding of what is expected of the other.

As far as a Commission payable if you back out and finding property on your own: A contract is NEGOTIABLE! Negotiate! Some buyers what me to preview every house even if it is FSBO, others what me to only assist with houses that have Seller Representation. In just about every Listing Agreement, there is an optional IAW clause. That is the commission is only due and payable If As and When the title passes. Add that to yours. Unless you back out of deal after deal, there is no reason it should be due. You also want to see if you have to pay, if the seller is paying?