Buyer's agent concerns?

**JimGa** · 09-24-2008, 10:22 AM

Hello all,

I have been working with an agent for around 5 months now and I have some concerns that I wanted to bounce off everyone. I am a new investor in real estate and found a local agent to help me find properties and to educate me on the market I am targeting.

My main concerns are these:

1) This agent failed to inform me that I would need to sign a formal Buyer's Agent Agreement (BAA) for her to act as a BA for me. I made it clear from first contact that I wanted a buyer's agent and she said they provide that service but never mentioned an agreement. That means she was essentially representing the seller/listing agent on any properties I inquired about over the 5 months. I was finally informed of this when another agent she works with met me at the second property I checked out.

2) Once I got a BAA from her it includes some questionable content. My two concerns are that if we got to contract on a home and I back out I have to pay whatever her commission would have been on the sale. Another is that she gets a commission on any property I find and purchase even if I found it on my own. Are those normal requirements in typical BAA's?

I just want to make sure things are legit before I proceed with this agent any further. Any advice would be greatly appreciated.

Thanks,

Jim

**markbrian** · 09-24-2008, 12:54 PM

1-wrong, just plain wrong in my opinion. If she was representing you and not the seller, she should have gotten the Buyer Agency Agreement signed first.

2-Investor & Back out of contract? It should specify under what circumstances you would be penalized. If you cannot obtain financing, you are not so much backing out as hopefully had a contingency for financing in the offer. But she may worry you are looking to assign the contracts, and she is CYA in case that is what your intentions are. many investors look to get the property under contract, and then assign the contract, if they cannot find someone to assign it to, they back out. And the agent makes nothing, the sellers have taken their home off the market for nothing, etc etc.

Commissions on any property- that is because you hired her to represent you for every property. That means when you become aware of the property, she takes it from there, looking at sales history, comps etc. Just because you found it does not release her contractual obligation to represent you and work to get you the best deal and make sure it closes.

But #1 is a red flag. But you should insisted on her signing a BAA with you. Confused as to why she did not, many companies only pay Buyers Agents.

**jamesww** · 09-25-2008, 06:17 AM

The fact she had not had you sign a buyers agreement may not be any big deal. A large number of agents are week and have a difficult time asking clients to sign a buyers agreement. This is because alot of people do not understand why you need to have this agreement with your agent and so they balk when asked to sign one. With this being the case many agents just have this agreement signed when they go to write up the first contract.

The first part of the buyers agreement that you were presented with is sometimes in an agreement sometimes not. But, as Brian said you need to make sure that it spells out what would cause you to have to pay the commission despite not purchasing the property.

The third part of this agreement is very common and almost always included in any agreement that you would be asked to sign. Its not a big deal as long as you request that you have an option to exit the agreement if certain expectations are not met. Also make sure the agreement is short like say 3 to 6 months.

Good luck with your investing endeavors and if you have anymore questions feel free to stop by my real estate forum as I check it at least twice a day and I come by here hit or miss.

**Codythebest** · 09-25-2008, 06:26 AM

You know what?
Why don't you shop around for an agent before to shop for properties?
She's obviously not working for you, but for her wallet...

**BeyondThePen** · 09-25-2008, 11:01 AM

Originally Posted by jamesww

A large number of agents are week and have a difficult time asking clients to sign a buyers agreement. This is because alot of people do not understand why you need to have this agreement with your agent and so they balk when asked to sign one. With this being the case many agents just have this agreement signed when they go to write up the first contract.

I don't know that it's a sign of weakness in a lot of agents. But yes, MANY buyers read the fine print and freak. And they don't want to be tied to an agent...just in case they want to jump ship and go use another agent.

To the OP, that buyer's agreement is to protect the agent just as much as protection for you. So yes, an agent wants to make sure he/she isn't going to spend oodles of time with you only to have you go off and buy a FSBO without representation or something. You may be able to get that part stricken from the agreement, but again, it's protection for BOTH parties involved.