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I got around to talk with one of RE agents and I was given a sample Buyer Representation Agreement - I think this is pretty standard and everybody sign the same thing? Or is there some variations that's done by each RE agent to the agreement?

One of the part on the agreement that a bit confusing to me (I often get lost with all these legal lingos too) is related to the Comission section:

(after part where it says the commission is 2.5%)
... The buyer agress to pay directly to the Borkearage any deficiency between this amount and the amount, if any, to be paid to the Borkearage by a listin borkerage or by the seller.

The buyer understands that if the Brokerage is not to be paid any comission by a listing brokerage or by the seller, the Buyer will pay the Brokerage the full amount of commission idndicated above
As I understand it, if somehow the seller agent / the seller dont pay the buyer agent, then I, as the buyer, have to pay the commission ???

How could something like the above happen? Shouldnt it be assured that the seller will pay the buyer brokerage?

The buyer agrees to pay the Brokerage such comission if the buyer enters into an agreement within .... (90) ... days after the exparation of this aAgreement (Holdover Period) to purchase or lease any property shown or introdcued to the Buyer from any source whatsoever during the term of this Agreement, provided, howeever, that if the Buyer enters into a new buyer representation agreement with another registered real estate brokerage after the expiration of this Agreement, the Buyer's liability to pay commission to the Brokerage shall be reduced by the amount paid to the other brokerage under the new agreement.
I am just lost at this one.
So if I initially have a deal with Brokerage 1 and got shown Property A, but I didnt buy it. And after the agreement is over, somehow I changed my mind and within 90 days I decide to buy Property A - I still have to pay Brokerage 1 comission from my pocket?

(I guess it kinda make sense so that I dont intentionally avoid Brokerage 1)

But then ... if I work with Brokerage 2 and got shown Property A again and I decided to buy it, I still have to pay Brokerage 1 comission ?

The Buyer agrees to pay such commission as described above even if a transcation contemplated by an agreement to purchase or lease agreed to or accepted by the Buyer or anyone on the Buyer's behalf is not completed, if such non-completion is owing or attributable to the Buyers default or neglect.
What constitutes a default or neglect here?
So if the purchase deal falls through for whatever reasons, SOME of those reason could cause me, as the buyer, to have to pay comission to the brokerage? I am confused.

Basically, any part of the agreement that says "The Buyer has to pay" is alarming to me - but if this agreement is standard and signed by everyone buying a house through a Realtor, then I shouldnt have anything to be concerned about?

CMF community expertise and insights would be very much helpful ... thanks in advance!
 

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Look at it like a marriage contract...... once you sign it you are stuck with that realtor and they can now get paid or even sue you for commission if you go work with someone else.

Personally I wouldn't sign it. I have never signed one and won't start now either.

I just finished burning out another real estate agent. When they don't answer the phone, send me emails of what's new on the MLS and so on. I just call someone else.

You can also sign a buyer's agency agreement for a specific property. That's fine I have no problem with that. But to go further than that to make some kind of commitment forget it. Real estate agents are only good to me as long as they service my needs. If they would stop trying to sell me stuff that doesn't fit my criteria they would save themselves a lot of work.

I may sound like I abuse real estate agents but I do not. I respect their time and drive by interesting properties first then ask them to go and see them.

So it's not true that every buyer signs an agency agreement. If you need a name of someone who works very hard, I met one this morning. PM me.
 

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I say sign. It's not reasonable to expect an agent to invest a lot of time working for you without some sort of protection that they will get paid.

Without this kind of an agreement, what would stop a buyer from using an agent to look at 100 houses and then just doing a deal on their own with the selling agent?

I think what those paragraphs mean is that if you buy a house within 90 days then you are responsible to pay the agent. This means that if you want to do a private deal then you would still owe the agent.
 

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Yeah, on your second point. It happened to a previous co-worker. Had buyer agreement. It expired. Bought a house a few weeks later, that the agent had introduced him to. (now before you jump to conclusions, no, I really don't think he waited for the contract to expire to then buy, he just needed to see more properties first to realize what was the best fit for his family) The agent ended up suing him for their lost commissions. I believe that the RE office felt this was poor taste, and let the RE go from their office.

The crazy thing is that the home buyer and the RE agent that sued were cousins!

Now I have never signed one of these, and have never been asked to either.

But it would be the most frustrating thing to do all the leg work and miss out on you pay check...so I do understand the agents side too.
 

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Discussion Starter #7
Without this kind of an agreement, what would stop a buyer from using an agent to look at 100 houses and then just doing a deal on their own with the selling agent?
I understand the need for protection for the buyer agent, I have no intention to screw them around - but I understand the need for written contract/agreement for their safety

I think what those paragraphs mean is that if you buy a house within 90 days then you are responsible to pay the agent. This means that if you want to do a private deal then you would still owe the agent.
This is what I dont agree with and what I have problem with.
IF the buyer buy a house that was introduced by the buyer agent, but waited for the agreement to expire to avoid commission - then yeah, the buyer should be responsible to pay the agent.

BUT, the wording of the agreement is so broad that after the contract expire, but then if the buyer buy a house that was NOT introduced by the agent, the wording as I understand it means that the buyer STILL have to pay commission to the agent (although the house in question has no relation to the agent whatsoever).

Also, the first point on my original post .. is also a troubling part - if the seller for whatever reason fail to pay the buyer agent, then the buyer would be responsible to cover it? The agreement has always been the seller to be the one who pay both agents - why would the buyer be responsible?
 

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Last time we bought (in Ottawa), our agent had us sign one, but only when we we were submitting an offer through him. However, his attitude - and ours - was that as long as we were looking, it was up to him to keep us loyal by good service.

Implication - if you're early in the buying process, I would tell your agent he (or she) hasn't yet earned your loyalty and you will not sign until later. If he balks, try a different agent. If the agent has already invested time with you and you are happy with his services, go ahead and sign.
 

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Last time we bought (in Ottawa), our agent had us sign one, but only when we we were submitting an offer through him. However, his attitude - and ours - was that as long as we were looking, it was up to him to keep us loyal by good service.

Implication - if you're early in the buying process, I would tell your agent he (or she) hasn't yet earned your loyalty and you will not sign until later. If he balks, try a different agent. If the agent has already invested time with you and you are happy with his services, go ahead and sign.
If you are trying out a new agent, I certainly don't think it is unreasonable to do a "test run" before signing. Maybe have some discussions about what the buyer is looking for and then go look at a few houses? By that time the buyer should have an idea if they want to work with the agent or not.

... The buyer agress to pay directly to the Borkearage any deficiency between this amount and the amount, if any, to be paid to the Borkearage by a listin borkerage or by the seller.
The buyer understands that if the Brokerage is not to be paid any comission by a listing brokerage or by the seller, the Buyer will pay the Brokerage the full amount of commission idndicated above
The buyer controls the deal - they would have to agree to let the selling agent take all the commission, which they obviously shouldn't do, so I don't think this one is relevant.


The buyer agrees to pay the Brokerage such comission if the buyer enters into an agreement within .... (90) ... days after the exparation of this aAgreement (Holdover Period) to purchase or lease any property shown or introdcued to the Buyer from any source whatsoever during the term of this Agreement, provided, howeever, that if the Buyer enters into a new buyer representation agreement with another registered real estate brokerage after the expiration of this Agreement, the Buyer's liability to pay commission to the Brokerage shall be reduced by the amount paid to the other brokerage under the new agreement.

I take this to mean that once the signed deal expires - you still have to wait another 90 days before buying a house that shown or introduced by the agent. The problem with this one is that if the house was up for sale during the duration of the signed deal, then the agent could argue that they "introduced" it to you via MLS mailings or whatever.

I think if this happens and you buy it privately then you owe the former agent the full buyers commission that was agreed to (ie 2.5%). If you switch to another brokerage then you will only owe the former agent the difference between their buyer's commission and the commission paid to the new brokerage.

For example let's say you have a deal with an agent and they will get 2.5% of any deal you make. Then you switch to another brokerage and buy a house and pay the agent 2.2% then you will owe the difference (0.3%) to the original brokerage.

Some of these conditions could be negotiable - how long is the duration of the agreement?

Also - there were a number of typos in your quotes - were these in the agreement? I'm not sure if I want an RE who is that sloppy if that is the case.
 

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I think a fair idea would be to sign the buyer's agency agreement limited to each property.

The problem as I see it is that most agents just want to show you a few properties. After a few they stop doing their job. They don't return calls, they don't send you stuff by email etc.

Personally I am very frugal and I want to see a lot. Even when I buy appliances I go to five or six different retailers before I make my final buying decision. When I bought my house I saw over 50 properties. It's a major purchase and deserves a lot more consideration than what brand of peas to buy.
 

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I only sign a Buyer Representation Agreement if I am going to put an offer on a property.

Even then I make sure in the Agreement that it says clearly that it is only for this ONE property and timely restricted.

It took me about 20 Realtors and approx two years to find the one who understands my values and also understands that I want to have numbers (income/expenses) ASAP, if I reply for a property.

Don't forget: You have the money- you make the rules and can ask for some performance if he wants the 2.5% he is getting due closing!
 
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