Can I still buy from wholesalers if I'm signed with a realtor?

Question

I've recently started looking into buying properties wholesale, since the numbers don't make sense for most of the MLS properties in my area.  However, the realtor I've been working with had me sign a "Residential Buyer Representation Agreement" when I made an offer last time, and I'm locked into this contract where my agent has the "exclusive right to represent buyer" in the market areas I'm looking to buy in.

Questions:

1. Can I still buy from wholesalers (either with or without the realtor's involvement)   if I'm locked into this contract with my realtor?

2.  If so, would my agent be entitled to commission from the wholesaler, or would the transaction be able to legally occur without the agent's involvement / the agent getting a cut?

Stephen Nicholson · Answer

If you buy an off-market property that is not on MLS I don't see why the realtor should be entitled to a cut. However if they have been doing a bunch of work for you I feel it's fair that they should be compensated in some way even if not a contractual requirement.

Ned Carey · Answer

Read your contract with the agent carefully. That is what governs your relationship.

You may be able to get out of the contract or change the terms. However make sure that is in writing.

Christopher Brainard · Answer

@Mina Summers

Unless the real estate agent is material to the transaction, they would have to make a grand argument to get paid. In this case, I would simply call the agent, let them know you're not going to buy a property off the MLS and that you're terminating their agreement. This happens all the time and shouldn't be a big issue.

-Christopher

Account Closed · Answer

@MJ Barnett so you feel you should get paid even though you weren't able to find a deal that makes sense for your buyer, and that buyer found a deal on his/her own? Ridiculous.

Drew Francis · Answer

@Mina Summers You didn't mention how you chose that agent. It might be in your best interest to find an agent that isn't exclusively using the MLS to find property. A good agent should be proactively prospecting to find business. By doing so you run across motivated sellers, distressed properties, owner financing possibilities etc. It sounds to me like you might look for a new agent.

Adrian Stamer · Answer

as an agent and an investor, what I recommend in the future when using an agent you should just sign the buyers representation agreement for specific properties they bring to you. So the agent will still get paid for any work they do for you, but you aren't limited to just the properties on the mls

MJ Barnett · Answer

Mina,

Re-read the Buyer's agreement. The Agent should be due a commission. The contract is put in place to protect the Agent from doing a lot of work and never getting paid for situations like this. Talk with the Agent and see what they say and understand they have put in good faith time and effort to assist you in buying a home.

MJ Barnett · Answer

Lloyd,

A Realtor works for free in the hopes that you are going to purchase. It is in the Realtor's best interest that they have a Buyer'a agreement signed because it explains that you as a Realtor are actually working for someone each day without pay and hoping to get paid. Many Realtors will work hours and days, weeks, months with a client who then says, oh, I found a house I liked and decided to buy without you because it wasn't something you showed me. However never thinking that the Buyer forgot to mention that they were looking at houses in XYZ town when they asked the Realtor to find the needle in the haystack condo in ABC town. So yes I do. I would assume you have never been a Realtor or worked for someone else before hoping to be paid?

Also, I have had clients who say they are investors and I understand that I am not going to have them sign a Buyer's Agreement and also not spend every moment I have finding them a property. For investors, when I find deals I send them to my investors. Because I know I may never find the right property at the right time for them.

So, Lloyd, if someone signs a Buyer's Agreement and then buys a property without paying a commission they are breaking the law in that agreement. You may think it's ridiculous though the person if thinking this was the way to go should never have signed the Agreement.

Just my opinion.

Ronald Bourgeois · Answer

Someday soon Real Estate will be 'a la carte'  the handwriting is on the wall.

-ron

MJ Barnett · Answer

If you haven't gone into escrow on a property or found one that your interested in at this time then just send in writing to cancel the buyer agreement or ask to have it altered that the agent only be paid on properties that they give you info on. That's how I have seen it work for Investors. This way you can honestly work with wholesaler's or with other investors to get a property at a better deal. Contracts can be canceled mutually. If the Agent doesn't want to cancel then talk with their Broker and explain your opinion.

Can I still buy from wholesalers if I'm signed with a realtor?

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