EXCLUSIVITY AGREEMENT WITH BROKER/REALTOR

[Atanas Angeles]

Hey Everyone!

I have purchased a few properties in the past, and this time around I got into contact with an agent who claims that they will find me an off market property at discounted price for us to fix and flip. We were asked if we would be comfortable with an EXCLUSIVITY AGREEMENT. I thought that I would be ok with it. A day later I received it, read through the contract, and I was shocked by the limitations. It’s for a period of 365 days, and it shall automatically renew. The area covered is a rather vast area in Los Angeles. Further: "if the buyer sell or lease the property purchased, the buyer (me) shall retain the services of the same agent as the listing broker/agent." 

I had also mentioned to the agent in our conversation that our strategy is to purchase 2 properties within 12 month period or less. This Exclusivity Agreement was such a turn off, makes me doubt the agent. So many events will change in 365 days, and I will evolve as an investor tremendously , I could not possibly sign an Exclusivity Agreement with these terms, it has too many limitations.  I'm a serious buyer, I am not a first time buyer that needs someone to hold my hand, I know exactly what we are looking for, and whoever delivers I will close on it.  We only had 1 conversation with the agent then a marriage for a year? What are your thoughts?

Thank you for your time in reading and expressing your opinion.

[Mike Velez]

Last year I was working with an investor looking for vacant buildable land locally. Found them a great property, was on the MLS listed at $950k. We were cash buyers offered $850k, seller refused spent many more weeks researching, investigating, showing properties. They told me they were going to wait on moving forward. A few month later I noticed that original property sold for $875k. My buyers. Either the seller's agent or the buyers contacted one another and got under contract. In real estate we understand that there are no guarantees. However, when someone does something unscrupulous there's no recourse for the broker without some type of agreement in place.

I'm not sure exactly what form you were presented with, but the standard CAR form that will protect both the buyer and the broker is the BRBC (Buyer Representation and Broker Compensation) agreement. It specifies the parameters of the property type, location, price point that are subject to the agreement. There's a way to fill it out that protects the broker for the actual work they perform but gives the buyer flexibility to not have to pay the broker if they didn't have a hand in finding the property. If Paragraph B (2) is checked then it does become exclusive and irrevocable but can still be cancelled unless C(2) is checked also. Then it really is exclusive. 

I'd be interested in helping you and won't check of either B2 or C2 :) Cancel anytime. Let me know.

Good Luck.