Georgia Real Estate Agents Law

[Herschel Kessler]

Hi all,

I purchased my first two properties using a real estate agent that typically buys for out of state buyers. HE charges the buyer a commission (aside from the typical 3% that an agent receives from the seller). I chose him because I needed someone with experience in buy and hold market in the rougher areas of Atlanta.

We went into this knowing I would plan to move on and purchase on my own. 

I'm trying to figure out a strategy so that I'm not locked into one specific agent, thinking this will allow me to make more connections for potential deals. Is this something not allowed by law? This also allows me to purchase FSBO or other non MLS deals without having to involve an agent.

When I was buying my own home (before getting into investing) my agent told me that legally, I need to sign exclusive or he can't do business with me. Is this true? If so, whats the work around? 

I understand the agent doesnt want me going behind his/her back but at the same time, if I find something thats off MLS, and he/she isnt involved, I shouldnt have to pay an agent fee.

Thoughts?

Herschel

[Azeez K.]

Hi @Herschel Kessler 

A little background: 

In Georgia there are two types of Buyer Brokerage Agreement used by Realtors 

1) Exclusive Buyer Brokerage Agreement: i.e I am going to get paid on any house you buy Mr. Buyer

2) Non-Exclusive Buyer Brokerage Agreement: Basically states that if I (Mr.Realtor) introduce you to the house you decide to buy ("procuring cause"), then I get paid when you buy it.

Having said that below are the responses to your question based on my knowledge (not a legal response simply discussion purposes): 

Q1. "I'm trying to figure out a strategy so that I'm not locked into one specific agent, thinking this will allow me to make more connections for potential deals. Is this something not allowed by law?"

Response:  Its allowed by law assuming you sign no 2) Non Exclusive Buyer Brokerage agreement you have the flexibility to specify the terms of the agreement i.e. you want Mr. Realtor to represent you for a specific property, specific time frame, specific zipcode, specific deal etc. You specify the terms after discussion with your Realtor. Essentially you are not locked in the agreement you can also terminate the terms based on mutual agreement so there is nothing that says you have to be married to one Realtor.  As an investor one Realtor may not be the best for all the areas you are investing. Real Estate is local so pick a real estate agent who knows his/her market inside out..select more on the experience and expertise in the area you are investing rather than "Oh he/she has a Realtors license." 

Q2. "When I was buying my own home (before getting into investing) my agent told me that legally, I need to sign exclusive or he can't do business with me. Is this true? If so, whats the work around?" Basically Georgia law prohibits a Broker (Broker A) from representing a buyer (You) as a client without entering into a written agreement. Not saying this happens all the time if you have a close friend/member etc then you may not sign a Buyer Brokerage Agreement. Typically, Realtors get the buyers to sign one of the agreements because they don't want to drive around Mr. Buyer and find out that Mr.Buyer goes with some other agent last minute so they have some legal recourse. Unless you sign the agreement the Realtor cannot provide you with any advice on Real Estate. The work around is you specify the terms of the Buyer Brokerage agreement i.e. you want the Realtor to represent you for 1,2,or specific property. 

Q3. "I shouldn't have to pay agent a fee"

Response: In most cases as a buyer you don't pay the agent a commission unless specified in the agreement. Most time the fee is paid by the seller when buying. 

Q4: "What would be the process of buying on the MLS if I don't have an agent? Do I need to sign a buyer/agent agreement on a house to house basis? "

Response: If you are doing a cash purchase then your lawyer drafts the contract and you are good to go (assuming all things legal). If you don't have an agent you may have to get your lawyer to draft a contract or use the contract provided by the sellers representative (which is not recommended) and have to pay the legal fees associated with the same. If you have a Realtor he/she could use the GAR form and do the contract that way. If your question is talking about access to MLS then you have to be a broker to get access to MLS or an agent under a broker. Most real estate agents for example can provide you access to MLS data. I am an investor and also a RE Agent so I can provide access to individuals for an app that lets them see all GAMLS, FMLS, Athens MLS data via an app or web.

If I were in your shoes I would test out different agents based on their experience and expertise in different farming areas that you plan on investing cuz you don't know what you don't know until you try. Think of it this way you have to create a team for your business and you are recruiting only the most talented and people who you can count on so it takes time to build a team. 

Hope this helps. Sorry for the long post