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Written agreement between Buyer and Agent

I am in the market for a single-family home & recently selected an Agent (Buyer's agent). She's awesome but there is no written contract between her & me. We just never spoke about it. What are the implications of this? What is the potential downside? Is she still legally bound to have my best interests as we navigate the buying process? Thanks in advance to the forum-gurus !


 
  • January 09 2010 - Dallas
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Answers (19)

I'm not all that interested in resurrecting a 2 year old question, however I was intrigued by what Mr. Mayer said regarding this comment:
" If I am not contracted in the best interests of my buyer I am legally bound to protect the interests of the seller of the home."

Really??  I tried finding evidence of this because I thought that was quite unusual, but nothing I found regarding buyer agency contracts in NY supported this idea of being legally bound to protect the interests of the seller unless the buyer signs this contract.

Are you saying that if a buyer signs such a contract with you, you will not show your buyers your office listings?

What is this stuff about not being able tell buyers about information known about the sellers? That has everything to do with a dual agency situation, nothing to do with a buyer agency contract, as far as I know.

Mr. Mayer, can you please back up your post with some links which may shed light on my apparent ignorance of NY real estate law.
  • February 27 2012
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I work as a Buyer's Agent in NY and I always contract with my buyers.  There is a simple reason for this.  If I am not contracted in the best interests of my buyer I am legally bound to protect the interests of the seller of the home.  This can include things like information I come accross of why the sellers need to move or information on the house that I feel might help my buyer get a lower price.  If I am not contracted to my buyer I am not allowed to divulge this information.  I also tell my contracted buyers that if at any time before we make offers on homes, they are unhappy with my work we will meet and disolve the contract.  I am not looking to force anyone to work with me but the contract protects both parties in this relationship. 
  • February 27 2012
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Whether or not a written agreement exists between you and your agent, she is still bound to have your best interests as her top priority. If you look at the Agency Disclosure, it says what your agent's responsibility is. When you write an offer, this form should be presented to you (in CA, anyway).

The downside of not having a written agreement between the 2 of you is generally on her side, not yours.
  • November 21 2011
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Your agent may be awesome. Unfortunately by not having a written agreement which includes terms and commission paid she is leaving herself and you in a little bit of a gray area. Without a written contract you really have nothing, but each of his word to go by. My advice if you are happy with this agent's service and you wish to continue to work with her ask for buyers contract and make sure that the terms and commission paid are what you both agree on. It's that simple
Good Luck
Marco LaPadura
  • November 16 2011
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I'm pretty sure the original poster has found an answer since January.
  • November 16 2011
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I disagree.

If the agreement is oral but not in writing, then you have a valid, but unenforceable contract.  You are bound to confidentiality, you have a fiduciary relationship, and you are NOT a sub agent of the seller. If you are a sub agent of the seller and do not disclose that to the buyer, then you're in direct violation of agency law.
  • November 16 2011
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Agency law, which can vary by states, usually declares that the agent representing you, which is done as soon as she began showing you properties which created an implied agreement, must abide by a number of rules, one of which is to 'have your best interests."

But, as a dedicated buyer's agent, I have to admit that I have always found this concept bizarre yet redeeming.

What kind of business commits hours and hours, maybe over 100, to a client without any down payment, or contract?

And yet, the amount of times a buyer's agent gets 'burned' should be minimal if they assure the buyer has been pre-approved and has shown no signs of flakiness.

What does this all say?

That real estate, in terms of buyer-client agency, proves that in an age of lawsuits, over-insurance, and paranoia that most people, almost all, will honor the implicit agreement that an agent is entrusted to find a house, and the buyer definitely wants to purchase a home. The deal should only break for obvious reasons: inefficient agent, sudden loss of income, health/family issue.

Who knew...that real estate, the poster child for seedy professions, proves that many people can still be trusted on their word!
  • November 15 2011
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As posted prior, agency agreements vary from state to state.  In Colorado it's very common to have a buyer's agency agreement.  As a Realtor I feel this document is a good opportunity to explain the different forms of agency and my role as a buyer's agent.  However, I never push to have the form signed until we are ready to make an actual offer, at that time it's imperative the buyer understands my role.  Until then I just trust that as long as I am doing a good job they will be loyal (this has burned me a few times in the past) but ultimately even if I'd had a written agreement how fun would it be to legally force someone to work with me.  Bottom line it's a helpful document and can be enforced but as a buyer I do not see any detriment to you by not having one.  Best of Luck!

  • October 10 2011
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Profile picture for The LaPeer Team
This is a really old post!
  • June 27 2010
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I like to have my clients sign a Buyer's Representation Agreement.  The form explains the relationship between the client and myself.  Many agents are afraid they will scare a potential client away with the contract.  I simply explain that the contract shows what my responsibilities are to them and if for any reason they do not feel I am living up to my obligation they can fire me anytime.

By signing the contract I know that I am working with a serious buyer that wants to work with me trusts that I will always represent his best interests in the transaction.  As I said before, my clients can terminate the contract with me at anytime and I would only be compensated if they purchased a home that I had previously showed them.
  • June 26 2010
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I had an awesome buyer's agent. I wanted to look at a house and filled an online form that linked her to me to look at the house. She was not the seller's agent, but in the same firm. The house was not what I wanted and she offered to send me some other listings that might fit. This went on for several months. Sometimes I would see a listing and contact her, usually she would see it first and contact me. We put in offers on three homes, sealing the deal on the last. It was a great experience, especially for a first time home buyer. I never signed any agreement. I knew I could work with someone else, but why would I when my needs were being met? She too was a seasoned professional and had a good rep in the area. On our second meeting she brought a folder with references and info about the realty company she worked with. When I made an offer, I did have to sign something saying she was my buyers agent for the property in question. It was not a contract for future properties if it fell through. Good agents are hard to find, sounds like you have a keeper!
  • June 24 2010
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Profile picture for Rick DeVoss

It is amazing how many of the answers in this column are not correct, ...and some of them were written by Agents.

If you have found an "awsome" Agent, you should stick with her and buy a house from her, and tell all your friends about her!

A Buyer's Agent works with buyers.  A Buyer's Representative has a written  agreement to represent a person who is buying a house.

You don't have a "legal agreement" unless you have put something in writing.  The written form for a Buyer's Representation agreement is not stipulated by TREC, and it may be on the back of a napkin.  It will primarily define that you are willing to commit to working with one Agent exclusively to buy a house that you select.

If you walk away and buy a house from another agent, the Broker could sue you, and it has been done successfully.  If the agent walks away and stops showing you houses, there is not much you can do.  (except change your deodorant)

If you sign an agreement, and you feel the Agent is not doing their job, then talk to the Broker,and either get it resolved, or get the agreement terminated in writing.

When you engage an agent to represent you, you should discuss compensation.  You may wish to agree to pay the agent yourself when you buy a house, or even a flat fee up front.  You may also elect to have the Seller's Broker pay your Agent, and that compensation is offered in the MLS system.
Very few agents who work for buyers will represent the seller anymore, and a good Seller's Broker won't let them!

Rest assured:  your "awesome" Agent will represent your best interests as you navigate the buying process.  That's what REALTORs do!



  • June 05 2010
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"Hence it's doubly strange why she knowingly committed this elementary oversight. "

It was probably not an oversight and more likely a matter of trust. She trusts you.
  • January 10 2010
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Profile picture for Rohan469
Thanks all for the comprehensive & lucid replies. I will discuss this with my Agent.  She came highly recommended, is an industry veteran and comes across as the genuine "ethical" professional. 

Hence it's doubly strange why she knowingly committed this elementary oversight.  

Again, appreciate the info and ' welcome other thoughts on this thread.

Regards

Rohan
  • January 10 2010
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As Naima stated, the agent has to provide the "IBS" sheet at the time of the "first substantive dialogue" with you - that is Section 1101.558(c) of the Real Estate License Act.

But, according to the legal section of the Texas Association of Realtors web site, the agency relationship can exist without the necessity of a written document to memorialize the relationship.  So, yes, the "relationship" is established and the agent is still required to hold your best interests and perform the same duties as with a written agreement.  However, if the agent uses the "realtor" designation, then she's violated Article 9 of the code of ethics which states that agreements shall be in writing for the protection of all parties whenever possible.

As everyone else has stated, the Buyer Rep agreement needs to be in writing as it "insures a meeting of the minds of the parties as to all the essential terms of those rights and obligations".  Additionally, if the agent wants to be paid by her broker (assuming she's not the broker), then the agreement will have to be signed prior to closing.  If things go bad, the broker may not sue for the recovery of a commission unless there's a written agreement in place (part of the Real Estate License Act) therefore, all brokers will require the agreement to be in place. 

Keep in mind that we are saying "broker" because you are in actuality doing business through a real estate broker and not just an "agent".  Agents are representatives of their broker and are bound by the same agreements, laws, etc. to you as is their broker.  In reality, you will probably never meet the agent's broker (unless the broker is your "agent") and everything you do in the transaction will be handled through your agent.  Not trying to confuse you but wanted to give an explanation as to why you'll see the terms "agent" and "broker".
  • January 10 2010
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This is for Dallas, TX.   

Does Texas have "implied representation"  like Naima suggests?


Thanks,

Rohan
  • January 10 2010
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The laws of agency vary from state to state. I have never used one. Not as a realtor and not as a buyer. I do not like the idea of being legally bound by them. As an agent, have buyer's used my services and then bought using somebody else? Yes. So what. I feel these agreements are designed to protect agents more than the buyer and prefer to rely on trust, ability and effort to retain a buyer rather than a piece of paper obligating the parties to put up with each other.

Don't be afraid of confidentiality issues. By law, agents are not permitted to reveal confidential information about either party with some exceptions like...An unrepresented buyer pursues a home where the agent wholly represents the seller and only the seller. You should get a real understanding of agency law in your state and as Naomi mentioned, what "implied agency" means. You may already have a buyer's agent without the paper meaning you are both free to walk away if things go south in the relationship.

One more thing. These agreements bind you to the broker more than they do the agent.

  • January 10 2010
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Your agent should have given you a form called "Information About Brokers Services" this is required by Texas law to be given to a prospect, buyer or seller on the first face to face meeting.

It highlights the agency process and who the agent represents.

If she is going to represent you as a buyer's agent, and have your best interest at heart and give you advice, then you should have a buyer rep. agreement signed.  It is a 4 page lenghty agreement that explains her duties as well as yours and who pays whom for their services.

If she acted as a buyer's agent but didn't give you the forms and explain them there is "implied representation" and she is hoping that you are not going to use her and then buy with someone else.

Sellers sign a listing agreement with agents and you should get your own agreement with your buyer's agent so there are no misunderstandings.

The good old days where you could do business on a handshake are gone.

Naima

  • January 09 2010
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If there is no agreement in writting on how they are to be representing you they are not bound to confidentiality! They are essentially the Sub-Agent of better know as a Sellers Agent. GET IT IN WRITTING!!!!!!!!!!!!!!!!!!!

Good luck with Buying a home!
  • January 09 2010
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