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Do I have to sign a brokerage agreement before I can legally go into homes?

The broker that I was referred to said I had to sign a brokerage agreement before he could legally take me into homes. Is this true? Also, in the agreement it states that I have to pay him 1% of the purchase price. Is this typical?
  • June 08 2014 - Duluth
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Answers (8)

Georgia is an Agency state and you should be represented. Sounds like the agnet would like to meet with you and discuss your needs and e=wants for a home before running out to a viewing.

We ask our client s to meet with us before showing any properties because that is the way we make sure they are getting the best service we can provide.  At the same time we explain agency representation and request you sign an agreement. That GAR agreement can be terminated at any time via email or a phone call.  No agreement is binding for an unlimited time. Be sure to take the time to review the agreement. It is a short document in terms of the biggest investment you may ever make.
  • July 10 2014
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It depends on the situation. I am very close to Duluth, and while I have sen some agents that choose to work this way, I have seen many others including myself who choose to do things differently. Legally, it is not a problem to show a buyer a home without an agreement. Kirsten Wellborn Garrett Realty
  • June 24 2014
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In Maine we have to explain the different kinds of brokerage agreements (difference between a customer and a client) at the time of the first "substantive real estate communication," whether that be by phone, email, or in person.

Brokers in Maine are not able to provide client-level services to customers. If a broker is working with a customer they can show homes, but cannot provide any advice, extra information, make recommendations on negotiation strategy, etc. until that customer becomes a client.

So that may be what the agent was talking about -- that he could not provide you with client level services, legally, without a brokerage agreement. Or maybe he's been burned in the past by a buyer who he put a lot of effort into, just to have them buy through another agent. I wouldn't necessarily count the broker out because he wants to have a brokerage agreement - also keep in mind that the busy agents who have these type of personal policies in place are probably busy and experienced. It's not a bad thing to set up expectations for both the buyer and the agent.
  • June 08 2014
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I would interview other agents. The seller and listing agent has a listing agreement that pays the commission from the amount negotiated for the house, at closing. There is an agency disclosure which is required, but it refers to buyer's agents, seller's agents and dual agents.

You are free to get your own buyer's agent that does not charge a fee to you, the buyer. You may contact a listing agent on a specific property but it is best to develop a relationship with your own agent who will find your dream home. Agents work on straight commission and buying a house from a listing agent after searching with your own agent is very unprofessional.

Most agents do want a bank pre-approval letter before showing properties as it takes lots of time to set up showings and drive to each one. We looked at 100 houses one weekend and bought a house from a FSBO. The broker received 3 per cent commission.

Make a list of specifics. This list should contain things you must have and a sub list with like to haves. This will narrow the search and save time and frustration on both sides.
  • June 08 2014
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it is not a matter of  a "legal" obligation - rather, it is something an individual agent or company may follow as their specific office policy.

You can interview other agents............

Does this agent expect 1% from you even if he gets paid a "full" commission from the sellers? Is that 1% over and above the seller's commission offer to a cooperating agent?

Interesting............not that it matters to you in Duluth, but this practice is not at all common in my area....but then, again, it doesn't matter, as you are there, and I am here in NJ!

:)

Good luck!
  • June 08 2014
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No, you don't have to sign a brokerage agreement before you can legally go to homes.

You may have to sign a brokerage agreement with a particular agent or brokerage before they will let you into homes, and that brokerage agreement may or may not have a fee attached. In my practice, I require an agency agreement and a commission agreement before I take prospective buyers into other people's homes. I would prefer not to take half-a-day showing houses to someone who is then going to have another agent write the deal up and earn the fee.

Many agents and brokerages are flexible on the terms, however. They may give you a "free trial," which means that they will not ask you to pay a fee on listed properties, and that either party may terminate the agreement if the first showing doesn't go well.

Hope this helps,
  • June 08 2014
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It is typical for my clients except the fee is different
  • June 08 2014
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How do you mean "go into homes?" I will assume you mean before agent can take you into a house that is for sale/rent. If that is what you mean, then you don't have to sign anything before entering the house. If you want the agent's services, he is not likely to extend them without an agreement that he is your agent and an agreement that if you buy, you will pay him a commission. It's his job. If you just want an agent to unlock the door and not include his services in the transaction when you buy, then he is not likely to provide assistance with any enthusiasm. If it were me, I would unlock the door for you if it were nearby as a courtesy in exchange for your good will. If the house was not near my office, I would refer you to an agent closer to the house who I am sure would provide the courtesy of unlocking the door but would be within his rights to refuse to do so very long without an agreement.
 
  • June 08 2014
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