Realtor can't give me networking information?

Question

Hello,

I am currently in the process of looking for my first property, and am gathering my network of resources to use (realtor, inspector, lender, etc..)

I asked my realtor for information regarding a couple home inspectors she would recommend, and she said that until I filled out her paperwork saying I am exclusively her client she can't give me any of that information...

Is this normal? Or is this a red flag that I should maybe look elsewhere for a realtor..

Russell Brazil · Answer

Real estate agents make money purely off of their knowledge and information and network. If they give all that away for free, then you may have no use for their services. While I do recommend a lender right off the bat, Im usually not making a ton of introductions unless Im working with someone, as the power of my services is largely in that network, and mentioning me as a referral will often give someone different pricing than they would get on their own.

Catherine Emert · Answer

@Derek Hutson - I can honestly say I never do this. I do have a rule of 3 - every time I am asked for a referral I give a minimum of three contacts that past clients have had good experiences with. I have never told a client that I have to have them sign an agreement to get this information, nor would I ever. Maybe it's my personal feelings about it, but if I won't give information to someone until they sign, they will just find someone else who will. I would rather help my clients get the information they need to make educated decisions on what they intend to do.

Mike Cumbie · Answer

Personally I don't use exclusive buyers agreements in general. If I am working with someone just shopping around and calling a bunch of agents and looking at a house with me on Tuesday and then viewing a house with the sellers agent etc, I just stop working with them.

As far as just handing out sources there is no business where someone would just hand it out to a new contact. Go into a restaurant and love the Salmon. Start asking "Who is your fish supplier, can I get it at the rates you do, what's his name let me ask him myself so I can decide if I like his terms or maybe I can negotiate something that is more inline with my business"? Ask a contractor who they get siding from and who they should ask for for the best deal? When they call "Hey I hear you give a good discount to Contractor Fred who has worked with you for years and referred some top notch clients, well I met him yesterday and I think I want you to give me those rates too". I guarantee contractor Joe is not getting that pricing as you pester his contact. Mechanics parts supplier, Dairy farms veterinarian,

People don't want their name traded on unless we haev a real relationship.

just my 2 cents

Jonathan Greene · Answer

Walk away from that money-grubbing agent BS. Someone who knows how to nurture a relationship is all about giving upfront and not forcing you to sign something before even giving you a referral for a future inspector that you would likely work with together. She will be trying to get you pay a buyer's premium and other garbage. Dump her, find someone who cares about the relationship and not a meaningless piece of paper.

Steve K. · Answer

Colorado is a little different than other states because in order for an agent to represent a buyer here we are technically supposed to have a buyer's agency agreement signed, and the form we are supposed to use is called the Exclusive Right to Buy Agreement, otherwise we are considered to be in the default working relationship which is as a "transaction broker". As a transaction broker we are not supposed to work for either party in a transaction at any time, yet remain completely neutral. We're not supposed to advise on price, negotiate on a client's behalf, give our opinion on a property, or anything that an agent typically does for their clients. One way to think of a transaction broker's responsibility is they are supposed to be impartial, like a referee, while as a buyer's agent we can play on your team.

A lot of agents here don't even know all of this of course, and many will wait until putting an offer in to establish buyer's agency, however every transaction has to have one signed at some point unless the agent is acting as a transaction broker (similar to dual agency in other states, which is illegal in Colorado unless the agent stays completely neutral throughout the entire transaction). So @Nicole Heasley, you would have singed one here any time you used an agent to buy. The way we are taught in school and the way the commission wants us to operate is to get an exclusive signed at the beginning of the relationship, once we are truly working with a buyer as their agent. Again, not every agent in Colorado does this and some probably don't even know we're supposed to but technically we are. So Derek's agent is just following the rules.

Another reason she probably wants it signed is that her brokerage also most likely requires it. Because of the liability involved, most brokerages here want their agents to have documentation formalizing their working relationship with their clients, otherwise by state law they remain in the default working relationship, which again is transaction broker. A brokerage carries some risk if they have agents working with clients as one would in a buyer's agency relationship when they are technically still transaction brokers.

Another reason Derek's agent probably wants him to sign an exclusive is because she's a professional, does this full time as her career, has bills to pay/a family to feed and doesn't want to waste her valuable time answering lots of questions, giving valuable advice, analyzing properties, sharing her valuable knowledge, sharing her network of contacts, building what she believes is a mutually-beneficial relationship, and showing/writing offers on multiple properties only to have Derek buy a place with his cousin Ralph without paying her a penny.

I never had a problem signing an exclusive when working with agents to buy properties before I got licensed, and now as an agent I of course prefer having one early on in a relationship, not only because CO frowns upon not having one legally, and my board of Realtors and brokerage also require me to have one, but also because I like to know I'm actually working with someone. When I work for somebody to find a property, I work to find a property. I do a much better job if I know my buyer is as committed to me as I am to them. I also want to be able to advise them without infringing on the limitations on what a transaction broker is supposed to do.

The exclusive protects both parties, because the buyer knows I'm working on their team alone, not a little bit for them, a little bit for the seller, a little bit for myself by looking to potentially double-end the deal.

In my experience most agents will allow an unhappy client to break an exclusive if they are not happy with their service. I will even write into the agreement "buyer has right to terminate within 24 hours notice if they are unhappy with agent's services". If a client has objections, they can ask their agent to write in additional provisions for whatever reasons they have for not wanting to sign the agreement. They could ask for an out if they're unhappy with her service, a reduced timeline, an exception if they are working with an agent in a different market or for a different product in the same market (example: one agent for their residence, a different one for an investment property), if they buy directly from their uncle who is a builder, etc. But technically you're supposed to have one in Colorado once you start working in a capacity that goes beyond a transaction broker's duties, so Derek's agent is not doing anything unordinary by asking him to sign one.

Account Closed · Answer

I'm not a realtor but in my day job I have lots of desirable contacts and that question often comes up. I simply say "if we decide to work together, you get access to my entire rolodex, shall we start the process"? If the answer is "yes" I pull out the agreement for their approval and then start answering all of their questions. If they say, "we'll I'm not ready quite yet" I say "fine, let me know when you want to get started". Why would I want someone I hardly know calling & wasting the time of one of my contacts?

It's also great for qualifying leads. I'm more interested in knowing if they are a "hot" lead or a "not" lead. If they aren't ready, I'm spending my time and expertise and contacts on someone who isn't in the buying zone and I'm thereby neglecting someone who needs my services and will pay for them.

JR Hinds · Answer

Personally, I would take that as a sign that the realtor would be difficult, and thinking in terms of what they can get out of you rather than how they can serve your needs. In my business, we give a lot of free recommendations and advice. Sometimes business comes back and sometimes it doesn't, but the focus is on serving the needs of the client. Businesses with that mindset will have a much better chance of sticking around.

Ryan Evans · Answer

I never ask for buyer's agreements and they're meaningless anyway. You can back out at any time. Though, I don't just give up my contacts to some new client at the drop of a hat either.

The reason being, most new investors/clients that reach out and want all my contacts never end up buying property. If someone already owns property or is actively buying then I give out names. Otherwise, they're going to call all my contractors and expect them to go out to properties and give free bids. They're going to call my attorney and try to pick his brain for an hour. They're going to call my PM recommendations and take their time up as well.

None of those are bad things, but if I gave out referrals every time I was asked, then all of my contacts would have a part-time job fielding calls from people who 9/10 times don't buy anything. That makes me look bad and then my relationships get ruined. That's probably where your agent is coming from.

You can find your own lender up front. As for the inspector, PM, etc., those can always come later. She might not be the best agent for you, but be sure to look at it from her angle as well!

Joe Splitrock · Answer

I am not a realtor, but I do get other investors asking for my contacts. I am generally protective of what referrals I give. I have referred people who turned out to be unreliable and wasted my contacts time. It made me look bad. If you want a referral, you need to prove to me you are legitimate and you need to offer some value in return.

Realtors only get paid when selling houses. Some may answer your questions and help you with the hopes you work with them. Even if they don't make you sign something, you should be serious about working with them before asking for things in return.

This needs to be a give and take. If you want someone to help you, offer something in return (like signing an exclusivity agreement). Otherwise you are just using people. If that is your intent, just use Google to find your team.

Kai Kopsch · Answer

@Derek Hutson she probably works with the Sandler Sales Method it called "Don'tspill your candy in the lobby!" in my area around 5-10% and mostly more successfully agent work like this its the same as some agent are not going to show properties without pre-approval letter or proof of funds. I would recommend do your research if she is worth it. I work differently but can understand Agent working like that.

Realtor can't give me networking information?

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