HOW DO I GET OUT OF THIS SITUATION!!!

Question

I am not sure what to do! I am a new investor who has been trying to get started in the Real Estate Bussiness by buying property. I started working with a new to the Real Estate bussiness Agent and that did not work out for what I am trying to do as an investor. The other day I met a Real Estate agent at an REI Club meeting and I got his card. I sent him an e-mail telling him that I was a new investor and he started sending me properties. At one point he said why don’t you come in to my office so we could talk about your investment strategies etc. I went into his office ½ hour into the conversation he pulled out a contract for me to sign stating that he is going to represent me, he gets 3 % if I sell a property and in addition I was to pay him $495.00 but he was giving me a deal of 295 because I belong to the REI club. I being new to this went ahead and signed it and told him I was going to mail him a check (I thought this was something that happened in the bussiness). I sent the check and did not think anything of it. I was having dinner with my friend and he says to me I want you to call this broker friend of his, he is going to work with you trying to get some deals etc. I told him what I did and he told me I had entered into a legal agreement with this Broker( I thought Real Estate Agent) as it says in the paper and I cannot do anything without him getting involved or he will sue me. I asked my friend what if I wanted to wholesale deals he said the same applies. I am about to join a mentoring program and we will be doing deals with them, so I will have to share profits with my mentor and with my Broker Real Estate Agent?. In addition my friend looked at the contract and it says that I am bound to the contract even 90 days after the expiration date which is December 26, 2007. Can someone advise me as to how I get out of this arrangement, at first I did not think anything of if but now I feel trapped. I will like to have the flexibility to work with whom I choose without getting sued by the Broker Real Estate Agent.. Please Help.

Account Closed · Answer

Find an agent that doesn't require one. I know agents that won't open a door until they get a buyers rep agreement signed. My feeling is that if I need a contract to bind a buyer to working with me then I'm not doing my job. If the buyer is comfortable with your performance in working for them then you shouldn't have to hold them to a contract. If you are not doing due diligence for them, then they should have the opportunity to find someone who will. The only time I use them is on a new construction where the builder requires it for their documentation. Even then I don't have them sign it until a day before closing.

Account Closed · Answer

Ha Ha, did you ever see Randy Quaid in Caddy Shack 2?

Adam Cormier · Answer

I suppose the laws change from state to state, however in Colorado the Buyer Agency and Listing contracts can be cancelled at any time. I can fire my clients for being meat-heads, and my clients can fire me for being incompetent. Just get it in writing that you wish to terminate the contract, and both of you sign it... including his managing broker (if there is one). This is just my opinion. p.s. I never charge my clients a standard fee. I get paid for doing a good job, not convincing people to sign a piece of paper. Edit: I just read the other posts, and yes the 90 day hold-over period is strictly for the properties that he has shown you. In fact, as far as i know he can only sue you for the commission if you purchase a property that he showed you through another broker. Other than that, he would file a complaint with the real estate commission and sue the broker on the grounds of Sign Crossing, which didnt appear to happen because you sought out the other agent... not the other way around. So like i said, just cancel the contract and move on - yes you lose a few hundred bucks but that is the cost of education sometimes :) And again, these are the laws here in Colorado as I understand them... it could be completely different in other states.

Josh Hay · Answer

I hope that in your REI club you told everybody this guy is a shady. The 90 days after your contract should only be for properties he has provided you. Look into, I don't think it is for properties others have shown you at the end of the contract. Like it was said before, go to his broker and save all correspondence.

Anthony Sulecki · Answer

I like the way you think. To hell with the scumbag.

Account Closed · Answer

Check to see if the agent/broker is operating under his own license or if he is working under another broker. If the later you have someone else to complain to. You also can file a complaint with the local RMLS if the agent is a member. Likely the agent will want to tear up the contract and refund anything you have paid already. Until you understand more you also should avoid signing. Even being a wholesaler implies that you understand how to use contracts to your advantage. I am sure you will figure it all out but you just need to move slower so you can read everything you are expecting to sign or use. John Corey

Dolores Ruiz · Answer

I know I should have said can I take this home and look it over and I will get back to you. I have learned a valuable lesson as a beginner investor dont sign anything without consulting with someone that knows about real estate or a lawyer. Thank god this mistake is only costing me $295 which I willingly handed over to this unscrupulous person. I know I should do all that you talk about in your e-mail (sounds really good) but greedy people like him hang themselves without the help of someone like me. The question to the forum is can I get out of this now so I can do other things like tell him this is not working out and he agrees to release me, or can he release me from the contract? I need to be let out because I dont trust him anymore and I am MAD that this is his approach. thanks allo for your responses.....

Tom C · Answer

If you have a scanner, put it out here. I am sure someone here will find a loop hole to get you out.

Dolores Ruiz · Answer

Thanks all for your replies....Thanks TC great idea I will try to find a scanner and do that.

Tom C · Answer

Yea I have an idea. You walk in his office and grab him by the neck and smack the piss out of him for taking advantage of you. Then you tell him that he is fired and if you hear or see him again your going to burn his house down with him in it. Theres only one way to deal with people like this and thats by playing their game. Of course I really don't mean you should do the above. Perhaps you can just ask him nicely to disregard the contract and you will still pay him for the homes he finds for you and you purchase. Or go buy a bag of pot, break it up in a bunch of little bags and put it in his office and call the cops.