Do I have to use (my) realtor?

Question

I just moved to the US last year and am a property virgin here.

I looked at a foreclosure a couple of months ago and met a realtor there who got me to sign what I know now as an `exclusive buyers contract`, no excuse as i`m a reasonably intelligent adult but he said it was a `no obligation` form and just a matter of normal procedure here and that I could walk away at any time...fast forward a few days and an email copy of what i signed was sent to me...looks like i`m on the hook for 6 months!

In the meantime I found a one acre lot which wasn`t for sale so I sent a letter to the owner asking if he would sell and he said he would, we met and walked the lot, i went to zoning and planning depts. and it looks all clear for me to build.

My question is, can I get this lot by just contacting a lawyer to sort things out or do I have to inform and involve ( my ) realtor? Bear in mind the realtor didn`t find the lot and knows nothing about it so I feel like he doesn`t deserve a cut. I also feel that I was somewhat duped into signing the buyers form as property purchase where I`m from is totally different.

Daniel Humphries · Answer

In Georgia you can get out of this agreement fairly easily. Just call the agent and ask him to send a termination of the Exclusive Buyers Agreement. You will both sign and done. On the other hand you could call him and say you found a property and have him help you put together the deal. First off make sure the seller is willing to pay a buyers agent commission. Secondly, let the agent know you're basically giving him this deal and in return you would like a deal when you want to list your next property.  Just an option, good luck!

Michael Woodward · Answer

@Al Brennan

No need to worry.  I'm a Realtor/Investor and this sort of thing is completely normal.  The reason the agent had you sign it was just to establish the relationship between you.  Most agents will also tell you that they will gladly let you out of the contract anytime, for any reason as a professional courtesy.  Being a high-pressure salesman as a Realtor will usually result in a short career because no one wants to be treated that way.  I'm sure if they said you could terminate the agreement, they meant it.

The agent/buyer relationship is intended for the purchase/sale of properties that are listed for sale (usually in the MLS) and on the open market.  The agent wants to know that if they spend a lot of time and money showing you houses, that you'll repay them for their help by letting them execute the eventual sale and collect a commission.  In your case however, you found an off-market property with no assistance from the agent so you are not automatically (or maybe even legally) obligated to pay them a commission.  It sounds like your agent is a reasonable person so you should just call them and explain what you found and ask them to terminate the contract.  I would be SHOCKED if they didn't release you with no argument at all.  Good luck!

Jean Bolger · Answer

First, I do think the agent pulled a fast one. But, in most US transactions, the buyer's agent actually receives their compensation from the seller (actually, from the seller's agent, who shares their commission on the sale as part of a co-op agreement.) What, if anything, does the contract obligate you to in terms of compensation?  Hopefully, you're not on the hook for anything. If your seller is not represented by an agent then he may be willing to pay your agent a small percentage to handle the transaction as a transaction broker- or, you could split a fee between you. It's all negotiable.

Now, if you just don't want to deal with this guy because he seems slimy -- and that would probably be my initial reaction -- then you can find out who his employing broker is and call and complain. If the guy you are dealing with IS the employing broker, or is an independent broker, then you would call your state real estate commission. Disclosure is a key element of the agent/principal relationship and he's in pretty clear violation of that, IMO. He would face possible censure or suspension of his license if you were to prevail in a complaint. At least, in my neck of the wood he would - the regulations vary somewhat from state to state so check with some local people rather than take my word the definitive statement on this.

Good luck!

Mindy Jensen · Answer

@Al Brennan, I am a licensed agent, and I am appalled at how this was handled. It does sound like this agent shoved a contract in your face. Terminating the contract should be simple, as @Daniel Humphries suggested. Either terminate it in writing of your own or ask if he has a form. If he gives you even one iota of grief about terminating the contract, go to his employing broker or the state licensing agency and file a formal complaint.

You should absolutely NOT bring him into this deal you found yourself, and I would recommend not doing ANY deals with him ever. He is shady and underhanded. You want an honest agent in your court.

Darrell Shepherd · Answer

Yeah, technically you are obligated, but only super crappy agents would try to make their living that way.  You should just get the termination signed.  If he wont, then talk to the broker, if they wont file a complaint with the RE Commission for misrepresentation.

Like has been said, the purpose of that document is to protect the agent in case they show you a lot of houses, then you go behind their back and buy one of them to cut out their commission.  It is not to give them commissions they didn't earn.  I'd laugh at this guy and tell him good luck with that in this scenario.

Adam Drummond · Answer

@Michael Woodward

I am a Realtor /Investor from S. Caroina.  "This sorta thing is completely normal".   I do realize that every state has different laws and contracts that each agent must abide by and use.  I find it hard to believe that this is the norm.  Honestly, when i first started as a Realtor I wanted every buyer to sign an agency agreement with me.  Now, I realize that not only are they "married" to me, but i'm "married" to them.  Years ago I stuck myself with terrible buyers that I would never sign to represent them now.  Back to my point..  pushing contracts in someone's face, and not explaining it to them seems unethical, and a bad business practice.  I'm not talking about you personally, Im just referring to your quote.

Adam

Adam Drummond · Answer

@Al Brennan

I've been a Realtor in SC for over 10 years.  First off... I can't believe (well, I can actually) that a Realtor would push that into your face and have you sign it so quickly without any explanation.  In SC, the only form that is required up front is an Agency form.  It basically discloses who is representing who, and states that the buyer can choose to be a customer or client (and the different levels of service to both).  On the buyer agency forms that we use.. there are certain boxes and paragraphs on the contract that discuss for sale by owners, and if/ how the Realtor will get paid.

Adam

Daria B. · Answer

Al-

Why did he say it was no obligation when there is an obligation for a certain time period? That seems intensional - can you talk to the broker?

I'd be interested to hear what other BP seasoned realtors / broker answer about this situation. I've always been leary about signing anything when it comes to open houses or just meeting new realtors.

When I found my realtor she didn't ask me to sign anything. She and I have a good working relationship and I've bought 2 homes through her so far and working on another. Now if I could just clone her to get into another market I'd be set! :) Haha

Ryan Dossey · Answer

I would imagine that you finding the property on your own, negotiating the deal, etc. would keep this separate from a traditional agent agreement. However review the document what does it say? You could speak with his brokerage about the form/feeling misled. I think you would be in the clear but I would read the document/consult your attorney prior.

Al Brennan · Answer

If I was buying a house which he found or if I found a listed house myself I would use him but it`s just the fact that this was `my` find and I have done all the groundwork.

Do I have to use (my) realtor?

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