Exclusive Buyer Agency Contracts. Don’t Sign Them… Yet.

Update 9/2015 to this 2007 post. Frankly.com, the unique home search site will now be exclusively for the benefit of our clients after a 10 day no obligation trial, that means signing one of these contracts. Read below to better understand it, and watch this VIDEO on why.

What is an “Exclusive Buyer Agency Agreement”?
This is a contract that a buyer is oftentimes asked to sign by a buyer agent Realtor. In part it commits the buyer to use this one agent exclusively for several months.

Why in the world would you sign this?

How could signing all your rights away ever help you, the buyer? Where is the “What’s in it for me?” in that proposition?

Don’t you still want to be able to:

  • Use another Realtor if you don’t like this one?
  • Buy a FSBO and have no commission be paid!
  • Bypass the buyer agent and make the listing agent give me the commission?
  • Walk into a New Construction and sign papers, who needs a Realtor for that? I got them down $50k!
  • Have 2 or 3 eager Realtors compete for your business. Each one working their tail off to find you that hidden gem. Doesn’t cost you anything, so why not? (just like the Double Agents show, where 2 Realtors compete: see Video)
  • If you find the home, why should he get paid anything?
  • Why sign an “exclusive” agreement, when you can sign a “non-exclusive” agreement?

And that sales pitch is so hoaky sometimes:

  • “My broker requires it before showing you anything.”
  • “This is standard.”
  • “If you don’t sign this, then I am legally working for the seller. If you sign this, it acknowledges that I am working for you, the buyer.” (my favorite, as the law reads, it is true, but in reality, it is just a pitch)

What a ton of B.S.

So let me know if I missed anything. All of the above is the typical viewpoint of the buyer right? I know it well. I grew up with it. My mother was the most cynical person and would never sign one of these agreements. She didn’t see the “how can this help me.” In part it is the Realtor’s fault for not explaining the process clearly.

But, and here is the big butt, I have seen the other side! It isn’t always as shady as it initially appears and it can help the buyer.

As a Realtor, many newbies feel bad getting their clients to sign these contracts. Sometimes they let it slide, until one day they understand why it protects the Realtor. Then I’ll go into how it helps the client.
What? This exclusive contract can help the buyer? How in the world is this going to come around full circle? Ah, the suspense.

  • Background story: I was helping some clients buy a home in 2004. Many buyers might think we are paper pushers, but some of us Realtors go above and beyond. Including once driving to Chantilly to take 100+ photos of the interior of one unit. Why? Because of Sucky Listing Agents. The agent only had 1 photo, and the buyer was out of town, so I created a virtual experience for them. (I do this for all of my buyers, I take about 50-100 photos of EACH place we see together and I create on online private album for them to remember everything. Does your B.A. do this?)Anyhow, we put an offer in on one place. We didn’t get it. I’m ok with that. I could have talked them into a higher price, and won, but I didn’t do that. I worked for their best interest, not mine. Then they found a For Sale By Owner. It was literally 20% overpriced (as many FSBOs are). They had me run the numbers and do a full analysis on the neighborhood etc. I even helped them talk through what they wanted to offer. I warned them no matter how upgraded it was, it was a really high price. It was like buying the best house in the worst neighborhood. They decided to offer anyhow.I then get an email the next day saying that my services were no longer needed(You’re fired), they had bypassed me and bought the FSBO for $30k over what it should go for. Payment to Frank was $0, (hours wasted). Buyer overpaid $30k. Having some consolation knowing they overpaid= Priceless.

Since then I require my clients to sign an “Exclusive Buyer Agency Agreement” early on. Not before the first showing, like some, but shortly thereafter. I give them enough time to feel me out, but I can’t invest a ton of time with a customer that is still shopping around agents and might bolt at any moment. A catch 22 of sorts.

So, ok, you got screwed, that sucks, help me understand how this helps me, today’s buyer?

  1. The contract outlines what the agent gets paid. Mine says 3%. And that means if a listing is offering 2% (only a few homes do), my buyer pays the balance, and if there is a FSBO offering 0%, my buyer pays the full 3%.

Wait a second, that sucks. I’ve always been told that the “seller pays.”
Again, a sales tactic brainwash: “Buyer agents are Free.” Don’t believe that. Guess who is writing the check/loan for a $400,000 house? Guess where the Realtor fees get drawn from at closing? Correct, that check. You are indirectly paying for all the fees.

  1. b. Wait it gets better. My exclusive agreement also states that if the buyer compensation exceeds 3%, the rest is rebated to the buyer! See (Shady Realtor Bonuses? 10%!! Free Cruise? Be Aware.“) Isn’t it great… no… just normal… that you have a contract that outlines what your Realtor is getting paid? Overpayments/bribes go back to the buyer, and there are no behind the scene shenanigans going on. (Buyer benefit 1: The buyer agent’s commission is fixed and you aren’t pushed into a property that bribes the agent)
  2. The agent can remove the fear in the back of their head that their client will walk, and they can give unbiased advice.Come on, human nature is going to kick in. How can you ask a Realtor “What would be a good deal for this”, (a question I don’t directly answer, but that is a long story) knowing t
    hat if the buyer doesn’t buy this place, the buyer still has the right to snatch up another place and fire the agent. How can an agent be aggressive for you if their commission might drop from $10,000 to $0 if they tell you the truth and guide you through a lower bid? It just can’t happen. The agent in this situation is NOT WORKING WITH THEIR BUYER, BUT AGAINST THEIR BUYER. This does NOT help the buyer. (Buyer benefit 2: Buyer agent is working FOR the client, not competing against them).
  3. Double their efforts. What Realtor in their right mind is going to go above and beyond and try to find you houses that are off the market or spend too much time on a buyer that doesn’t see the process as a team effort? I oftentimes send out letters to entire communities that my buyer likes. And that works. Usually for every 10 MLS places I show, I’ll scrounge up 1 or 2 places that are yet to be listed, withdrawns, FSBOs, or another hidden gem. Without that commitment from the buyer, I’d see it as a waste of time, or too risky. (Buyer benefit 3: More time invested in finding you more places equates to a better price or more inventory/options.)
  4. Help you or help another committed buyer? A good buyer agent will be turning away clients, or referring to another good agent, when they get too busy. If you want a new Realtor that has nothing better to do than drive you around forever on the 50/50% chance you will use them, great, but why not use a Realtor that respects your time as well as their own time and puts his foot down and sets guidelines for the work that they perform?

What about non-exclusive buyer agency agreement? I heard some agents will use that. Doesn’t that help me while protecting me?

All that does is a) squelch the “I work for the seller” trick and b) outlines how the Realtor gets paid. Both good things, but knowing that the buyer might go buy something after seeing something at an Open House or a new construction without them, the bias will still be there for you to buy quickly and for a higher price.

What about New Constructions, isn’t it better if I’m Realtorless?
Almost always the price for the buyer is the same with or without a Realtor (wow a pitch that you might have heard, that is essentially true). But, yes, on a rare occasion the sales office might get a bonus if they sell a unit to you without a Realtor, but who cares? You still don’t have anybody working for your best interest. Who cares if you got them to drop $50,000, a good Realtor might be able to say “Wait, in another community across town, they have been dropping $100,000!” or “Don’t believe their comps, they are illegally not posting the seller subsidy (see Beware: New Constructions Illegally Not Disclosing Seller Subsidies). Recently I helped a client get a new construction for $10,000 under the price he was initially told was non-negotiable AND I wrote into the contract a clause that allowed him to exit the contract if the prices of the condos continued to drop (a pricing guarantee). That single handedly could save him $40,000. And all you thought we did was show up with a smile and cash our check? What about the Jaguar the money I saved you can buy? Will I get a free ride at least?

Also in one case with an Arlington new condo, is the sales office going to tell you about how the building was almost condemned and slated to be destroyed because it was sinking? Um, I don’t think so.

What about bypassing the buyer agent and making the listing agent give me the commission? Heck even Money recommended this step (see article)
From somebody that has been in over 10 national publications, (CNBC, WSJ, NYTimes etc) magazines sometime give new reports a “beat” to cover. Sometimes they are not experts and they think they can jump in and reinvent the wheel. This reporter is an idiot. When a listing agreement is signed, it is between the seller and the agent. If an offer comes in with 3% back, the buyer can’t simply void the listing agreement. The offer is netted out and the listing agent can still get their double commission. Even if they don’t still get it all, (oftentimes they do) you still have nobody representing you to help you get the best price and help you avoid all the shady Realtors tricks that are out there (DOM fudging, etc). Who cares if you “save 3%” if a good buyer’s agent might have been able to get you 5% or more?
What about these FSBOs, isn’t it better if I find one without a Buyer Agent?
Yes. In theory. But those FSBOs tend to be cheapskates. This is fine, but cheapskates (like my mother!!) are notorious for overpricing! Great you “save” on Realtor fees, but you get a horrible deal. With a Realtor who is on the same team as you, can help you evaluate the pros and cons of that unit and also strategize how you can get the seller down. No not just with a low offer, but other ways. I love dealing with FSBOs that think they know it all. My client pays the Realtor fee (wink wink) but then they get the place for $50k under true value.

Again, yes, signing the agreement might preclude you from buying a gem FSBO that is underpriced and not offering Realtor commissions. That is a “risk” that you have to understand and be willing to accept, in trade for the other benefits of having a dedicated Realtor.

Buyer’s can’t have it both ways. You can’t expect an agent to work their tail off for you, offer unbiased data analysis, and offer aggressive negotiations while the agent knows you hold an “out” card. What, is the agent expected to just cross his fingers that his time invested will work out favorably? Is it worth holding onto that out card? That is up to the buyer, and if they see any value in their agent.
To recap: I’ve put myself in the buyer’s shoes. I know where they are coming from and their hesitations. I can understand and respect that initial
viewpoint. Now put yourself in the shoes of the agent. How likely is that agent going to be to help you try and fight for an extra $5,000 or $10,000 off? Human nature would kick in and say, “Why should I be aggressive on this offer if they might just go elsewhere if this deal doesn’t happen?”

If I sign one, when should I sign it?

  • Wait until you are comfortable with your agent.
  • Even if the agent didn’t ask for one, consider signing one before you put in an offer. That way you are saying a) “What are you getting paid?” b) “Don’t worry, I will use you, now tell me honestly about the value of this place.”

Good luck. Hopefully after reading the rest of this blog that highlights the insider tricks of Realtors, you will better understand why this exclusive buyer agency contract is requested by some and required by others and how it ultimately helps the buyer.

Also make sure to leave a comment and read others comments.

– Written by Frank Borges LL0SA- Broker/Owner FranklyRealty.com
703-827-4OO6 Please report all typos, I don’t like looking stupid. If you like this post, sign up for new blogs daily.

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98 Responses to “Exclusive Buyer Agency Contracts. Don’t Sign Them… Yet.”

  1. Karen says:

    RE: Procuring Cause Experience as the Listing Agent

    A couple years ago I served as the listing agent on a property. I was absolutely –slam dunk — the “procuring cause of the sale. The purchaser found the property through my advertising and told me so and said she was not working with an agent. I helped her quite a bit, several emails about the property, etc. She & her husband wanted to buy the house.

    Then I get a call from an agent at a big prestigious brokerage who tells me she wants to fax me her client’s offer. I mentioned I have another Purchaser interested who will be writing very soon.

    Receive the Contract and it’s the same Buyer I’d have been “working with” who’d come to my Open House (through my advertising). I asked the agent when she signed the BAA with this buyer. She said: “like everyone, the same day we wrote the contract.” I said: “well, not like me.” I was really pissed. This was a situation in which the buyer would be getting money back through a relocation company if she used this brokerage. In reality, she had a crappy agent who did nothing for her until it was time to write the offer.

    Then the Agent’s Broker sends me an email w/attached letter for me to sign stating that his agent was the “procuring cause” of the sale. I said: “no, of course i won’t sign that. it’s not true.”

    I also told him that I’m letting this go — not signing some untrue doc — but I won’t challenge it re: “procuring cause” Why? Because my client was a senior citizen who’d moved to assisted living. . .and she needed the sale.

    I’d worked really hard on prepping this house for sale — even painting the front door & removing the storm door myself b/c the workmen didn’t do it and the Open House was the next day. I staged it, marketed it and held Open Houses every weekend for months. . .but I sacrificed the 3% sales side — that I’d earned — b/c it was in the best interest of my client, the seller. The other agent might have tried to get the buyer to buy something else. . .and I didn’t want to risk it. Made no difference to the seller. Either way she was paying 6%.

    Very complicated – our business.

  2. les says:

    I have purchased a few homes and sold a couple. I hope to continue to do so. I search the internet relentlessly to find what I want(LOVE THIS SITE). I have phoned listing agents about their listing and asked questions of them not necessarily expecting to write an offer with them. I just like getting answers quickly/directly. I have never felt I was unethical or even unfair for doing so. I figure that’s what they are paid to do by the seller as a listing agent- make the listing as attractive as possible to any prospective buyer. It seems to me that you prepped the house, painted the door, and had open houses because that’s what listing agents do for their client. Please let me know if this practice is viewed as unfair in most agent circles.

  3. […] commission is NOT the reason your agent is discouraging Short Sales. See also the benefits of an exclusive buyer agency agreement, see blog […]

  4. Paul says:

    Hello. I live in California and I just signed about three pages of a Buyer’s Agent contract because I want to purchase an income property. I did this less than 24 hours ago. But I have changed my mind and do not want to work with this person, or at least under an exclusive agreement right now with him. How can I get out of the contract? I did not walk away with any copies (he said he will PDF email me my copies); we transacted in a Starbucks where he wanted me to meet him and no where on his card is there an address. Also, he had me sign an agreement that if I purchase a property through another agent because I am not happy with his performance, I have to pay him 2 ½ % of the purchase price. Hope you can advise me.

  5. Ann says:

    Hello. I live in California and I signed exclusive Buyer’s contract agreement with a broke because I need for my 1031 exchange purchase an income property. I did this for 2 months. But I have changed my mind and do not want to work with this person or at least under an exclusive agreement right now with him. Now I have brought a income property to another agent. I am not happy with his performance; I have to pay him 3 % of the purchase price. Hope you can advise me. I have RE license but never active.

  6. […] but we won’t get into that part now). While it might sound risky to eventually signing an Exclusive Buyer Agency Agreement (#1 on google for that phrase by the way, in case you want to be impressed by SEO), it can actually […]

  7. Mona says:

    If I researched properties and then contacted a Buyer’s Agent to make an appointment for me to view the property..and then make an offer on the same property, do I need to sign a buyer’s agreement ? I did all the research. All he did was call the seller’s agent and make an appointment for me. I said I would go through him to make an offer. But he says that is not legally possible. That I would have to sign a Buyers exclusive contract in order for him to make an offer for him. Is that true ?

  8. FranklyRealty.com says:

    Perhaps he is grasping on a hyper technicality that if you aren’t a signed client, then he works for the listing agent as a sub agent. Which nobody does.
    In my opinion it is a trick.
    You can always sign the agreement “only for this house” but if your actually read this blog, you will see how you then can’t ask “what should I offer” or “is this a good deal” or get any advice. WHY? Because he knows if you don’t buy this place, he will likely lose you. So he can’t be honest.

    And agent that knows you will stick with them, can be more honest and not be scared you will ditch them.

    See the video on popcorn agent.

    Great question.


  9. […] second potential buyer will submit, preferably with their buyer’s agent (which should be an exclusive agent), a regular 20+ official contract with an addendum that outlines the details of the “back up […]

  10. EP says:

    “You can’t expect an agent to work their tail off for you, offer unbiased data analysis, and offer aggressive negotiations while the agent knows you hold an “out” card. What, is the agent expected to just cross his fingers that his time invested will work out favorably?”

    In a word…YES! Every other business has this problem. The yogurt shop down the street has to wow me, or I walk. They didn’t expect the town to sign a monopoly agreement before they built the store, hired the employees, and then hoped the customers would respond. Why are realtors immune from the risk inherent to the free market? Did you ever have a car salesman require you to sign something before he’d show you any cars?

  11. FranklyRealty.com says:

    Hey there EP.
    Love that you submitted a comment. Our job is to inform you and obviously the message was lost, because your comment misses a few HUGE components. Hopefully you will get the AHA moment, but maybe not.

    The difference is (good) agents have what is called a “fiduciary duty” to you. We advocate for you, not against you (ie us vs you, which is the scenario you are creating). Just last week I talked two people out of buying. They thought they wanted to buy, but they had all the wrong reasons. What ice cream salesperson has done that for you recently?

    We don’t “sell” you something like a car salesman does. The car salesman doesn’t go with you to 10 different car lots from 10 different companies and answer your question about which dealership or car to buy from.

    So, EP, do you REALLY believe that if you call 5 random agents to show you 5 different places, that all/one of those will see you as a dedicated or serious client? A customer they are willing to help for 5 months and talk you out of a few places? All with no commitment? You really think one of those will “wow” you by talking you OUT of buying a home for whatever reason? If so, then that is not realistic.

    And I’m not sure if it was clear, but we don’t make you sign a 6 month agreement on day one, right when you meet us. But if we have been spending a few hours together, and you like what you hear and see…. yes, we need to know you are a true client. Otherwise, we have other clients that need attending to.

    Proceed with your approach. See how it goes. And the moment you ask for “advice”, hopefully I will be in the back of your head saying “This guy knows I have no loyalty to him, so what is his incentive to talk me out of buying this moneypit? What is his incentive to stick with me in the long run and give me a long term, best for my scenario, answer?”

    And if you do find a great agent that is willing to work that way… then you should use them! But guess what, business is great. We aren’t starving like the press likes to say we are. We will just focus on the clients that value our opinion, insight and see us as a partner in acquiring this entity called a home. Any agent worth their salt will ask you and require this. They value their time and have been burned too many times by a buyer that didn’t fully get it. After working with us for 3 months, suddenly walked into a house and bought it. “oops” they say. Well we have to protect ourselves from that, and part of the contract is understanding that we aren’t a “house per house” agent, we are a long term “entire process” agent.

    I hope you will debate me on the other blog posts. There are many that I suspect you might disagree with. Hopefully though in the end, you will see value and think “Hum, I might actually be better off if I worked with people that weren’t trying to sell me on something, were sharp and on my side.”

  12. Lisa says:

    I see your point, but I actually disagree. I am an artist by trade. I spend hours up front making pieces to sell, with no guarantee that anyone will buy what I make. I spend hours networking and building relationships and advertising and all that as well… still with no guarantees.

    Sure, buyer’s agents would LOVE to have a guarantee that buyers will work with them exclusively. But is that the only way they can be honest and work for the buyer’s best interest? NO! The agent can certainly choose to be honest (or dishonest) with or without an exclusive agreement.

    In fact, it has been my experience that those who have an exclusive agreement provide the lowest quality service. For instance, I was looking to buy an investment property and put in an offer through a particular agent. I had done all the legwork to find and research this property. The agent had me sign the agreement in order to put in the offer. Then, he told me that I could not offer on any other properties while I still had a standing offer on the first. However, the bank took months to get back to us. During this time, I lost out on many better properties. This is just one example of how an agent can actually become MORE dishonest once he has an agreement.

    Bottom line – an agent is either an honest person, or a dishonest one. The agreement does not make the person an honest person… it just gives them more rights. I think most real estate agents are like sales people – they don’t mind lying to make a buck. If you find an honest one, my guess is that they won’t ask for a contract, because they know that in most cases, their honesty will cause buyers to want to buy from them.

  13. CD says:

    I really like your insight on needing a buyer’s agent agreement. I like the fact that it will make them work hard for me. BUT what if they don’t? What if I sign an exclusive buyer’s agent agreement and the person turns out to be too busy because they signed on too many clients, or something happens to them in their personal lives and they can’t fulfill my expectations? Is there anyway to write contingencies in the contract, like I must be shown a certain amount of properties per month, or, I don’t know, something that makes them stay committed. I understand they want the commission but if I signed with them exclusively then basically they can take their sweet time, up to “six months” to find me a house and still get commission. In other words I have loyalty if you are willing to work hard for me too, but BAs have a “jump ship and I still get mine” clause why can’t I? I don’t want to sound combative, because I am not trying to be! I reallly like your blog:)

  14. yupai says:

    We did sign the “PENNSYLVANIA Exclusive Buyer Agency Contract” until we first gave an offer on 11/5/12 for bank-owned WeatherStone 204. we thought that the exclusive contract is only for the property on which we were giving the offer. On that evening we were going through quite a load of paperwork, we couldn’t possibly go through every word in one or two hours even we read it we still don’t understand what it present. We thought that it is reasonable for realtor to have exclusive right on the property we made offer. The contract the realtor wanted us to sign on that particular point of time when we made offer is misleading and confusing.

    We gave offers three times through this agent but unfortunately none of them went through. I think that shows we really want to buy a house.

    this year we start to working with another agent, I sent an email on Feb 1, 2013 to let my realtor know we are working with another agent. and she did not mention it to me that we had signed the “exclusive contract” and I am not allowed to work with another agent or complaint about it. So we think we did our job to let her know our status.

    yesterday she called us and got mad and she wants our agent’s contact info. How would we do? should we give her the contact info?

    If I were to use you or cheat on you, I could have sent you an email to terminate our exclusive buyer/agent relationship without telling you the fact that I already gave an offer.


  15. FranklyRealty.com says:

    I don’t think you need to give the first agent the second agent’s name. What she is trying to do is a) tell them to back off or b) asking them for a referral fee, a cut of the deal.

    As for terminating the buyer agency agreement, it depends how it was written. At our firm we do not allow people to simply send notice to terminate. On the other hand if somebody does not like our services and talks to us, we haven’t had a problem finding a solution for them that makes them happy.

    You can also talk to agent #1’s broker.

  16. FranklyRealty.com says:

    You make a great point. That is why there should be a little bit of a dance before you sign a long term contract. Also note that your contract is with the BROKER and not with the agent. So you can contact the broker and say you aren’t getting XYZ support and would like to switch to another agent in the firm. I have had people do that with us. Not because they didn’t think the agent was responsive, but because the two didn’t mesh. It happens. We switched to another agent and they were thrilled and bought a place in a week.

  17. FranklyRealty.com says:

    If you want a sales person, you will get a salesperson when you tell them “what do you think of this place, should I buy it” oh and by the way “I have the right to fire you if I don’t buy this place.” You have just changed them from being a consultant mindframe (talking you out of the wrong place) to financially motivated ONLY if they buy this one place. They then have to SELL you on it.

    As for your experience, I bet it was a low price point. Low price points will get you completely a different level of service.

  18. […] out the Fiduciary Duty is 100% to the buyer client (assuming they are a signed client with an Exclusive Buyer Agency Agreement, don’t miss that blog […]

  19. Eileen Eskew says:

    Hi Lisa,

    I wanted to respond to your comment comparing artwork to Realtors. When you are building your artwork you are creating a commodity, an item for sale. If people like it they buy it. A buyer’s agent is providing a service, they are working for you. Imagine working each week for an employer and then when it is time to pay you , they say, no I’m not going to pay you this week. Your concern about honesty vs dishonesty, if you have any feeling that an agent is being dishonest report it. And always look for a Realtor, a member in good standing with the National Association of Realtors. There are so many legal issues in the Real Estate industry and Realtors have to abide by each one to remain a member, and in to keep their license. The buyer’s agreement does not guarantee that you have chosen a completely honest agent. When you sign a retainer agreement with an attorney you hope that you have chosen the best. A Buyer’s Agreement is a mutual promise of commitment putting all expectations upfront and on the table. And thus this is the start of an honest relationship.

  20. Qualified buyer says:

    As the biyer Most realtors I’ve come in contact with are barely at the used car salesmen level in terms of trust. This article is a small “flash of the kimono” that is supposed to make is trust YOU?? HAH. Buyers, run away, run away now.

  21. FranklyRealty.com says:

    Could those realtors at least spell?

  22. James Trump says:

    This website’s “advice” is a joke. There is no other reason to sign an Exclusive Buyer Representation Agreement other than to protect the agent and ensure they get paid, whether they earn it or not. Give me a break!

  23. Bill Loftin says:

    I am a Realtor in California. I have worked with a buyer client for more than a year. We have made several offers and due to low inventory had multiple offers. I talked him out of a few money pits. My client had a top end restriction due to qualification so haven’t been successful. I have checked our MLS on a daily basis and emailed all potential properties. My client sold a vacation property and was able to purchase a higher priced property. His significant other had viewed multiple properties with us and was aware through my emails of a property she was interested in. She had a real estate agent friend show her the property. She liked it and talked my client into the property. Her agent friend that showed the property wrote the offer and it was accepted. My client was upset with his girlfriends interference but obviously between a rock and a hard place. He said that he asked the other agent to pay me a fee and she said she would. About 15% of my rightful commission. I worked for more than a year and if i get the referral( fat chance) it wouldn’t cover my gas let alone my time. Buyer agreements are almost unheard of in our area. I don’t think selling cars or art work are a relative comparison.

  24. Jane N. says:

    This page has illegal contents.

    Bypass the buyer agent and make the listing agent give me the commission? —>>>>>> This is called a kickback. It’s against the law and against RESPA: the Real Estate Settlement Procedures Act.

    Working with a couple of agents is very confusing. They all call me for the same listings, and I don’t even remember which agent I viewed apartments with as time goes by. Working with one agent makes life much easier.

  25. Iam a realtor in Michigan,aside from all that you said.What was failed to be mentioned were the cost of a realtor to be licenced,continuing education,mls fees licence fees,gas ,time, cost of signs,additional insurance for auto and protection against lawsuits,advertisments,So run clients around spend endless hours on searches,sometimes for months and do it without a contract {which is no more than a guarantee that you will get paid if they buy what you worked so hard to secure for them} see how long you will be in business.

  26. FranklyRealty.com says:

    Thank you for your comment. There are many blog posts out there that share your perspective. Most are why the agent needs a contract. I tried to focus on why it benefits the client.

  27. Betty says:

    We signed an agreement with an agent to help us find a house in a new community. What we discovered after a couple weeks of looking at properties is that nothing was exactly what we wanted so we decided to abandon the search for an existing property and build something we really wanted.

    We found the lot we wanted on our own, we researched, interviewed and selected the builder on our own, but our “buyers agent” is still getting 2.5% of the builders contract sales price.

    We saw the same floor plan marketed by the same builder for much less than we agreed to and when we asked why our house was so much more the builder said it was to cover the cost of the realtors commission.

    How exactly is this benefiting me?

  28. Pointman says:

    I am a realtor and a great amount of information on this site is distorted to the point of being silly. It seems that the author of this site has no clue about how properties are sold and commissions.

    MB- Realtor

  29. […] Exclusive Buyer Agency Agreement. Don’t Sign Them… Yet. […]

  30. Robert Young says:

    If you want me, you’ll sign a contract.

    If you don’t want to sign the contract? I’m fine with that. There are a lot of Realtors sitting at their desk right now, doing nothing.

    You as the buyer will absolutely guarantee me that if I spend 100 hours finding you that “Gem”, I will be compensated.

    I have a lot of faithful, loyal buyers that I’ll give the “Gem” to. Don’t need you.

  31. Kathy Long says:

    In the business 30 years ago, then a period of time off to raise my kids, now back in R.E. and loving it. But boy, have things changed!
    I don’t believe there was such a thing as a Buyer’s Agency Contract back then, in fact, we were taught that every realtor works for the seller. So, to me, as a buyer, I want ONE person who I can develop a relationship with, who gets to really know my wants and needs, and who I can go to for any/all my Real Estate Needs. I know they have my back, and will have my best interest at heart in any transaction – a sale or a purchase. As a licensed Realtor, I, and many of my colleagues, take our job and our fiduciary responsibility to our clients VERY seriously- after all, what do we possibly have to gain by being a dishonest Realtor – oh wait, our License?? So we might never work in a business we (must) love, again? I happen to love being a buyers agent, and will work my tail off for them. I always have a Consumer Notice signed at our first showing together, and I always have a filled out Agency contract for them to read – and ask any questions- but rarely do I ask them to sign it right away. After all, I want to make sure we are compatible and I like them, and they like me! There are some pretty whacky people out there- and some that I don’t want to work with. So, for me, most of my clients (who I’ve never known before an initial meeting) like making the choice to ‘hire’ me as their Realtor after we get to know each other a little and they understand my values and integrity mean more to me than the paycheck- and that I need that paycheck like any other hard working businessperson. 9 times out of 10 I am in ‘agency’ with my buyers by the 2nd or 3rd meeting, and I feel thankful for their trust in my services to the extent that I not only want to help them find their next home, but I want it to be as right for them as they themselves do. I suppose it is difficult for people not to be skeptical of any salesperson, but I do not consider myself such. I want to offer to my clients the same service I would want from a Realtor (if I weren’t one). I would want that agent to be my personal R.E. consultant and help me see the pro’s and cons of each property, point out problems I may not see, and negotiate the best price when offering, and guide me through the process when I buy it- and of course, I’d want them to be compensated for their hard work, no matter where the commission comes from.

  32. I am a Realtor, and I like to think that I will help my clients buy this house and the next one and the next one…I think of making clients for life. I work hard for my clients, with integrity and honesty, and often go above and beyond to help a client (ie: painting dining room and kitchen of a client’s house last weekend to help it be more presentable). This week I got a legitimate lead from my broker for a client that wanted to know if a house he had seen at one time was still available as he wanted to buy it. He couldn’t remember the name of the Realtor who had showed him the house, or the company she worked with! So I prepared to write up his offer, talked to his bank, did all the necessary steps to present his offer to the listing agent and help him buy the house. Then this morning I get a call from some very upset agent at another company who says I am stealing her client, and he was her good friend (that he couldn’t remember, etc). I did nothing wrong, and yet she (a new agent) did not make nice and explain the situation (as we will in our small community invariably cross paths at some point) to tell me that she had done her fiduciary duty for that client and that she was all prepared to make his offer. She called the client, and nice guy that he is, she shamed him into staying with her….so nobody really feels good about this situation. She recorded our conversation without telling me, then accused me of planning to steal her next client…. This is why I would have had him sign a buyer’s agent agreement when he came in to sign the paperwork for the offer. Real estate is a tough business, and your reputation for honesty and integrity is very important. She should have had him sign a buyer’s exclusive agent agreement, and given him a copy that he could have referred to…..so now I am out that sale, that I very badly needed, and she has left all of us with a bad taste in our mouths.

  33. […] Contact a REALTOR to represent you.  A lot of people hesitate to be “locked in” to one agent, but there are many benefits to working with a buyer’s agent.  But that’s a post for another day.  In the meantime, read more about why it’s good to have a dedicated buyer’s agent over at Frank’s blog. […]

  34. Ally says:


    We choose to not sign The Non-Exclusive Agency Agreement, and our realtor decided that she will refused to put in our offer for the property we want to purchased? Is this legal for her to do so? She also forward our contact information, and who knows what else to a morgate lender without our permission because we have already found one. Is this illegal action on the realtor part?

    Can we move forward and submit our offer through another realtor agent? Are we breaking any agreement since we signed the Consumer Report, and Sale of Agreement/copy of a deposit check, yet the realtor was not satisfy and refused to put in our offer. Is this legal on her part? and can we work with someone else (Realtor) since we did not sign any agreement to exclusively working with her or her agency. Please help, she had made this process extremely tressful, and all we want to do is put in our offer and purchase a home.

    Thank you in advance your help.

  35. Becky says:

    I came across this page while looking for something else. I don’t normally comment on pages like this, but I had to say something. I have a hard time with someone who would create a website specifically designed to slam another very legitimate profession. I ran across and article yesterday with something similar. The creator of this website was slamming people who had careers in the companies of Cutco and Mary Kay. It was one of the ugliest assaults of other people that I have seen on a blog. What is the deal? Did you have a bad experience with a realtor? Then say so and encourage people to carefully select who they want to work with, but don’t slam an entire profession because you had a bad experience. Do you want to close down all fast food restaurants because you got a bad french fry one time? I had a wonderful realtor who had my back in some pretty complicated legal issues. Finding a property is easy to do online. A realtor takes the time to show you these properties. It takes time, gas, license fees, MLS fees, etc etc. to run around with you. That isn’t even where the expertise of an agent comes in. It is after the house is found. The large part is helping the buyer with inspections, negotiating repairs, appraisals, complicated contract, lenders, closings, title. If you are an expert in all of those things and want to take the responsibility of perhaps losing the shirt off your back, then by all means, don’t sign the agreement!

  36. FranklyRealty.com says:

    I don’t believe you read the blog post.

  37. FranklyRealty.com says:

    Thanks for your comment Robert. I hear you, and I know what it is like to be burned. But it is hard for consumers to see that side of the story.

  38. FranklyRealty.com says:

    Wish you would be more specific instead of blanket attacks.

  39. Susan says:

    We found a great property that was FSBO but not being marketed – just a faded sign on the property – I researched the owner. I felt more comfortable working with a buyer’s agent so contacted one who had great references. She called property owner and got selling price – which was low for the market. We met her at the property on Sunday and told her we were interested. We talked about buyer’s agent agreement but didn’t sign one. Se told us she would check with county on existing perc test on Monday. Agent’s husband is a builder, and she told us she knew several builders who would love to buy this property as it is very desirable area and great price. Now, Thursday night, she hss not responded to our calls/texts. We’re worried she is working on selling the property to another buyer. What can we do?

  40. Sean Peter says:

    If you look at this guy he looks like a real loser. Looks like he had nothing better to do but slam an honest and hard working profession (for some).

    He is using his own kid to leverage his pitch, which just goes to show what kind of person he really is.

    Sorry Frank, but you’re a loser and just fyi. The design of this website really sucks lol you stayed up late nights for no reason :/

  41. Lee says:

    Well, my state requires that a buyer representation be signed prior to my showing any property that is not listed by my broker.
    So if you don’t want to be under contract with one agent, you would need to call each individual sellers agent for each house you want to see, and hope that they return your call and are willing to take the time to make a special trip just to show you the property. If it is a successful and busy agent they may not want to bother. Plus, if I show someone houses, I vet them ahead of time to make sure that they can actually afford the houses I am showing them, doing one off showings for random people is just a waste of time.

  42. Sandra says:

    I agree with Robert – if they want me, they will sign. If not, there are others who will work with them, but since it is a required contract in Colorado to represent a buyer in a purchase, I will not proceed without it, after then first meeting. Too much can go wrong. And if my buyer finds a FSBO, then fine, the agency agreement is for homes I show them…and I won’t show them a FSBO.

  43. Tb says:

    I believe it is now law that you must have a buyer agency agreement to show any home if you are a licensee.

  44. FranklyRealty.com says:

    It is different in every state, but don’t be fooled!!! Even if that is required, the agents put it into a form that makes you commit to them for X months. That is NOT required. So they say “sign this form, the law requires it, it is 18 paragraphs long”. When in fact only 1 or 2 paragraphs are the required part.

  45. FranklyRealty.com says:

    Does that Colorado contract sneak in other NON required clauses? Do you tell your client that? Or just say the entire contract is required by law. Is that ethical?

  46. FranklyRealty.com says:

    Does your state require EVERYTHING in your contract or is that a handy excuse? I bet the contract sneaks in a time period, that might not be required.

  47. FranklyRealty.com says:

    Thank you for commenting. Makes me look good to have many comments. Even if you think I stink.

  48. Maria says:

    your agent has fiduciary duty to you- if he or she breaches it- I would not be talking about honest or dishonest agent- I would be talking about an agent who broke the law. Unfortunately, it is costly to go after such violators. This is the reason people are so hesitant to get into exclusive relationship with any one. If I am not the only client why should you be my only service provider?

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