gwilks98

I got a buyer's agent to help me shop for a home, and he wants me to sign a contract. I've heard a lot of people recommend against it, but I'd rather take advice from people who know what they're talking about. Is it foolhardy or worthwhile?

(I'm assuming this contract is wanting me to gauruntee him a level of commission, even if I buy a house that's for sale by owner.)

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LegendKiller

I never had to sign anything when I was shopping for a condo. I wouldn't sign... Standard practice is for both to share a standard comission.


LK

Cubsfan

That's exactly what it's for. I recently bought my first house, and probably wouldn't have done very well had I not had a buyer's agent. Mine was very helpful and was willing to work with me on everything.

Also remember, that you agent's salary is paid for by the seller (depends on how you want to look at it, but their commission is built into the price). You might be able to get them to come down on their price if you don't have a buyer's agent, but I wouldn't count on it. If a house is advertised for $100k, that's what you'll pay. The agent's salary is in there.

That being said, my agent didn't make me sign that contract until about 4 minutes before I made my offer. I was actually quite impressed by that.

The contract is making sure that they don't help you find your dream house, and then make a deal with the seller to get the house for 3% less and screw your agent.

dbax791

Cubsfan had a great reply.

I'll add that I would not sign a contract - now I don't know if it is common practice in your area, but if you sign a contract up front you are locking yourself into this particular agent, and if something doesn't work out then what do you do?

That said, a good buyers agent will really try to understand what you want to avoid wasting time showing you houses you are not interested in. They can also get you pre-qualified for a loan which means sellers will take you much more seriously and give you some negotiation leverage.

I had a great buyers agent. LOL the first day out he would tell me what was wrong with each home and why I wouldn't want to buy it (power lines, undeveloped commercially zoned property adjacent, etc...) as he began to learn my preferences. 2nd trip out I found my house, was prequalified, signed the contract at the offer sheet and got it for a few thousand less than advertised.

ray

Here in California, it is typical for the Seller to pay for all agents' fees.

Chgoman

The seller still does, the buyer's contract agreement basically states that you are committing to use that agent to purchase your home if you do so during the contract period (just as he's commiting to do his best for you if you have a good agent). If the agents is someone you trust, then it probably won't hurt you. If you aren't comfortable signing it (which I wouldn't be if it wasn't someone you know), then tell the agent that you aren't really comfortable signing a contract at this time. Just realize that some agents will choose not to commit themselves to work hard for you if you won't commit to using them.

gear02

Read the contract. What does it say?

And then tell the dude to screw it and find another agent. I'm betting it's something that guarantees him money, even if you don't buy anything.

Normal agents only get paid if you buy something. So you can retain the agent for like months without buying, although he/she will probably stop returning your calls after 4 months. When I went condo shopping, I placed bids on 3 places, losing all three times before giving up. The agent never got a cent, and she deserved every penny of it since she was pushing me more and more to sign an unfavorable contract.

Now everytime I drive by her office I give her the bird.

zippyjuan

Buyer agents don't make any money unless they help you buy a house. The comission on a house is usually six percent- with half going to the buyer's agent and half to the seller's agent. Unless that agent is independent, they have to give part (possibly half) of that comission to the company they work for, so now you are talking about perhaps 1 1/2%. It takes them a lot of time and expense to help you- looking for listings you may be interested in, scheduling viewings and taking or meeting you there. They will also help you a lot with your financing package making sure everything is in order. They do not want to do all this work and have you close the deal with someone else so they want you to commit to them the way they will be comitted to you. Unless they are asking you to pay any fees upfront, there should be no problem signing an agreement. There are usually time limits and check for an exit clause in case they are not doing their job- but they don't get paid unless you buy some thing so it is doubtful they will just sign you and ignore you. If you do not feel comfortable with the person, then perhaps you should talk to someone else. There are many out there- it is a very competetive field. Ask friends and coworkers who have purchased a home recently about who they used and what they thought about their agent.

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cheapchinese

it is common practice for agents (buyer) to have a contract for the buyer to sign in socal. but if you don't feel confortable with your agent, don't sign with him. its just that it takes a lot of time into getting you to prequalifying loans and things. (worked a summer job in socal, 2003)

the down side to this is that you can only stick with him and his connection with listing he has on hand or his agency... kinda sucks... so besure to have an exit clause (a determined date)