Is The Realtor I'm Dealing With Unethical/Sloppy, or Am I Wrong?

[Patrick M.]

My last few weeks in a nutshell:

1. Spot a REO good property on Zillow that is overpriced for local market.

2. Call Realtor on website, ask to be shown property.

3. Go and tour site, take some photos, ask some questions.

4. Follow up with additional requests for documents from Realtor while doing my due diligence, including lining up my lawyer and inspector.

Realtor sends me a form saying that he will represent me AND seller, and charge me a 3% fee. Realtor lets me know there is a $300 fee due to me at closing so that he can submit offers via a website to the bank AFTER I submit the offer.  

This man has done next to nothing other than show me the property. I am not under any obligation to have him represent me at all, am I? I believe I know more about the market than he does.

[Dawn Brenengen]

Originally posted by @Patrick M.:

The form is the NC Association of Realtor's standard form. His filled-out form has me listed as entering into a "Exclusive buyer Agency Agreement" and under section 4, COMPENSATION, it says "Buyer agrees that Firm's fee for services hereunder shall be in the amount of 3% of the purchase price." It has a subclause stating that if the compensation offered by the listing firm is less than the fee, that the Buyer and the Realtor's Firm agree the Buyer will pay the difference.

Under the Dual Agency section, he is encouraging me to check the box authorizing him to act as a dual agent. The section below that states: "Dual Agency Compensation. If the Firm acts as a Dual Agent (including designated agency) , the total fee the Firm expects to receive for its services in representing the buyer and the seller shall be 5% of the Purchase price. THIS WILL IN NO WAY AFFECT OR MODIFY THE AMOUNT OF FEE SET FORTH IN PARAGRAPH 4 ABOVE THAT THE FIRM EXPECTS TO RECEIVE FOR ITS SERVICES IN REPRESENTING BUYER UNDER THIS AGREEMENT." (That is the section in the above paragraph)

I've bought my current home and prior home FSBO with my lawyer, so I'm not interested in paying for handholding I don't need. Should I just tell him I am not interested in him being a Buyer's agent or a dual agent?

I'm familiar with this form.  This is just the buyer's agency agreement, and he can not submit an offer for you without you signing it.  The 3% commission he is referencing is what the SELLER usually pays, but if the seller does not pay, then you are on the hook for it.  If the seller only pays 2.5, then you are on the hook for .5.  

He likely wants you to agree to dual agency in case you decide you want to buy any of his listings.  This would be rare.  When I am working with retail buyers, I usually have them check exclusive agency because the likelihood that my buyer would buy one of my listings is very small.  However, when I am working with investors, I usually have them check dual because I often list rental properties from my PM clients.  I doubt any of my investor buyers would want to be excluded from me contacting them about it, simply because they don't want to be in a dual agency situation.

I'm not totally clear what the $300 fee is, but it sounds like something the site is charging him to submit, and he is simply passing that fee along to you.  This is not something that is a standard part of the agency agreement.