All Forum Posts by: Nick Louie

A 7 month term sounds overly onerous. I agree, it's important to due our due diligence before signing an exclusivity agreement. 

Do you recall the precise terms of the exclusivity period? For instance, did the exclusivity period prohibit you from purchasing a property in any manner, either by yourself or through another agent that listed property your agent did not list? 

I think an exclusivity arrangement is acceptable, but it has to be drafted properly. Most of the time, the agents have boilerplate templates, and they don't want to change the terms. But all contracts are negotiable. 

Thanks for sharing here. Just out curiosity, how long is your exclusivity period? Feel free to give a range if you'd like to keep confidential. In my instance, the exclusivity period was three months. 
 

I agree. I think it also just comes down to the language within the agreement. In my instance, the language put a limit on the duration of the exclusivity, and it was a short period. I found this acceptable because I like the buyer agent and the team. 

For the commission arrangement, I felt like the terms of the contract weren't overly aggressive, but it definitely wasn't market standard. My stance is if the buyer agent wants a guaranteed 2%, then they need to help me locate a property where the seller is offering this commission with the listing agent. The terms in the contract, as stated, essentially said I had to personally guarantee the buyer gets 2%, and if the seller gives less (e.g., 1.5%), then I have to make up for that .5% at closing, which could be added onto my mortgage (that I need to pay back eventually). 

If the buyer agent is getting a guaranteed 2% + exclusivity, then I could imagine they definitely have an incentive to get the ball rolling. But the problem for the buyer agent is the market is competitive. At the outset, it's difficult to justify this arrangement, when other brokers are even going so far as to offer rebates on commission fees. It's also hard to demand these type of "aggressive" terms before demonstrating value or distinguishing your services from the other agents in the market. This has been my introduction into the world of real estate investing. Game on! 

Hi Jared - I agree with you on this. It seems strange to me that I would have to make a binding offer without knowing my mortgage interest rate..Also, how and when should I shop my pre-approvals around without knowing the rate...

Hi BP Community,

I'm a first-time home buyer in New York City. I was wondering whether a pre-approval letter from a bank should always contain the pre-approved amount plus the interest rate for the duration of the term? 

My lender told me that I cannot lock a rate until you are in contract to purchase. Is this accurate? 

Thanks! 

Regards,

Nick

@Joe Norman

Great advice! Thanks. I’ll let you know how it goes!

@Joe Norman

Thanks Joe. This approach is very reasonable. If the seller isn’t offering to cover the buyer agent’s commission, then the agent should notify the buyer beforehand, so the buyer can determine whether to submit an offer.

So before the agent submits an offer on behalf of the buyer, we would all know whether the seller will cover the buyer agent’s fees, correct?

@AJ H. Thanks! I agree with this. So you agree that type of arrangement isn’t “customary” in most markets, or at all right?

Just curious, how would you evaluate whether a buyer’s broker would be worth assuming this type of obligation?

Hi BP Community,

I was wondering whether it's customary (in your respective communities) for a first-time home buyer to work with a buyer's agent and agree to exclusivity for 3 months and to pay the agent 2%. In this situation, the 2% would be deducted from the seller's closing costs, but in the event the seller doesn't give 2%, then the buyer would have to cover the buyer agent's commission by including the costs in the mortgage. 

From searching on the BP forums, I know whether to enter into exclusivity for 3 month is subjective. But whether to agree to cover 2% commission fees is more questionable. I was just wondering the BP community's thoughts on this payment arrangement. 

Thanks! 

Hi Georges - thanks for your reply. Do you work as a lender in NYC? 

My understanding is that I wouldn't be able to just apply for down payment assistance right? I would need to apply for my home loan with SONYMA, and this mortgage product has income limits, therefore, the down payment assistance program also has income limits...

My income would disqualify me.