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sign a buyer agent contract?

Somayeh

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I will (hopefully) buy my first home during the next few months. I understand that some agents encourage/require you to sign a contract to exclusively work with them. Are there advantages/disadvantages in doing this? Would one require a buyer agent at all? What about the private sales (e.g. advertised on craigslist saying: "no agents please"), would a buyer agent contract hinder me from pursuing those opportunities? Any word of wisdom is appreciated.

Thanks.
 
since you are buying for the first time, it's advisable to have a buyer's agent.
however, it is better if you find an agent that won't tie you to a contract. there is no advantage to you by doing this.

i will send you a private message
 
I think it really depends on what you are looking for. I am in real estate so I would say to use an agent, but only if you trust them and feel like you are learning about something. You don't have to sign an exclusive agreement, but if you don't and are working with a realtor. You will be considered a customer, if you sign you will be the client. The biggest difference to these terms is that as a customer your agent might show you some of his/her clients property to get both sides of the commission and represents his client in the procedure. You will get customer service but he/she will not be able to tell you motivation/price because he/she is representing the client. Remember that you can cancel your agreement with your realtor based on performance at any time. I would suggest to do a 30 day trial run to see if a realtor is for you.

I will tell you that most realtors don't show you properties that don't pay a significant commission becuase it does not pay. Most properties are listed at 5% commission, 2.5% for the listing brokerage, and 2.5% to buyers agent. Now when you sign a buyers service agreement I would tell you that you would have to pay me 2% for my services. What this means is that the cooperating brokerage who pays 2.5% would pay me not you. If the property only offered 1.5% and it fits your criteria, you would be required to pay me .5% to cover the difference.


Most properties are paying 2.5% to the cooperating brokerage so you will never have to pay. Private sales are different, as most of them don't offer any commission to the realtor. This is your choice if you want to deal with the home owner directly and have no market data available. The perks to having a realtor in this situation is that they can provide you info on comparables in the neighbourhood, but a lot of private sellers don't like dealing with any realtors. So it is hard to say what is the best option for you. Remember it is your choice and you should never feel pressured to make a decision unless you are comfortable with that person and the end result.
 
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As a recent first time buyer, my advice, don't sign until you are ready to make an offer. The agents I worked with while looking were all fine with me not signing a BRA and did not pressure me to sign one at all. You will find some who pretty much tell you that they will not work for you unless you sign, but don't let that pressure you into signing. Simply move on to the next agent. I ended up signing with one of the first agents I met with, as he spent a great deal of time showing us properties and finding exactly what we wanted.

If you do get pressured to sign a BRA, make sure you check out the conditions. You do not have to give the realtor rights to the entire city. You can simply choose an area to be under contract for. You can also work to determine how long the BRA will be in effect.

PM me if you are interested in Condo's. My agent was great, and I would definitely recommend that you try him. As I said, he does not pressure you to sign a BRA.
 
Thanks drewp. I learned a lot from your comments! One final question for you (if I may): If I am willing to pay the commission myself, can I use the services of a real estate agent for a private sale? (i.e. get his/her opinion on the price, etc)? Also, if I do sign a contract with the agent, does that mean that I have to pay his/her commission even if I participate in a private sale (and not use his/her services)? These are more hypothetical questions, as I think as a first time buyer most likely I will use an agent, but like to know. Thanks!
 
Thanks Tuscani01. I think your advice on signing the contract when I am ready to make an offer is great! So, if I don't sign a contract before making an offer, does this mean that I can see various places with various agents? (but then I would guess only sign the contract with the one agent who found me the place to make an offer?).
 
Somayeh, I will tell you that private tells account for less than 10% of all real estate transactions. There is limited inventory when you are looking for private sales. I know when I bought my first condo my realtor never told me about the commission structure as a buyer. Which tells me that he only showed properties that were paying him a good commission. If you were to sign a buyers agreement I would charge you 2%, which means the bulk of the properties would be paying a 2.5% commission, again you don't pay. Some private sales will pay a co-operating brokerage 2.5%. The home owners would be saving 2.5% in the process. If there are properties that fit your criteria that are not paying a co-operating brokerage any percentage I would ask you if you want to see the property, but you would have to pay 2%, or I could go to the seller and ask them if they are willing to pay the 2%.

This is why I am saying that signing a buyers service agreement is beneficial becuase you are protected, and will be notified of all properties, but also the realtor wants to be protected as well. I know it sounds confusing but it is not. I know a lot of realtors who will not ask you to sign anythng until you put an offer on a property, so again the choice is yours. Like I said to you, YOU should not feel pressured to sign anything. Only sign if you trust that that realtor is working on your behalf first, and not concerned with his commission only.


As a first time buyer I know how difficult and overwhelming the process can be, it will all make sense when you are going through the fine details. Good Luck
 
You're in the driver's seat with regards to choosing the Realtor you prefer.

As a Realtor, when I first started, I tried working with everyone I met. I shortly realized that I spread myself too thin. I devoted a lot of time and effort to people who weren't serious about buying and that meant I didn't give enough time to those that were - and I dropped the ball because I was too busy.

After learning from that mistake, I decided to keep a manageable list of clients at any given point. So when I take people out to see properties on evenings and weekends, I know there is an end goal that will be reached. This means that I work with less people, but they all buy. So if I take the hours in my day and divide by the fewer number of clients, they all get more/better attention.

So like I said earlier - it's all up to you. Just consider how the Realtor you hire works before spending too much time with them.

And with regards to working with multiple Realtors - I think it's inefficient for you. Hire one good person who will look after you from start to end. I've heard stories of buyers having a King West rep and King East rep. Those Realtors push properties harder because they want to be the one to close a sale. If you have 1 rep, they have no invested interest in any specific property. Instead, they will help you see the pros, as well as the cons, of each listing.
 
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My girlfriend and I are in the market for a new place, and we had originally planned to buy a resale house in or around downtown (say, Ossington to around Parliament, and King up to Bloor) but have noticed a few preconstruction townhouse projects on the market now that seem to offer good layouts and relatively good locations for a fairly low per-square-foot price (eg Motif Townhomes and Trinity Bellwoods Townhomes). Given that we were originally thinking resale, we wanted to get an honest opinion on the pros and cons of buying preconstruction, so we thought that it would be good to talk to a real estate agent. We looked on the web and thought that this site: http://truecondos.com/ looked fairly professional and had a lot of good information, however it doesn't appear that this guy is willing to talk to you unless you sign a buyer's agreement.

Now, from what I've seen a buyer's agreement generally doesn't seem to be a bad idea, but I'm worried that (a) this guy (or whoever we talk to) may be knowledgeable in the preconstruction area but may not know so much about the resale market, and (b) if we sign an agreement first he may just be interested in getting us to buy a place, when all we really need at this point is (basically) an honest appraisal of the potential problems with buying preconstruction (somewhat tailored, if possible, to the specific preconstruction projects that we're looking at, ie whether they may be more or less likely to have problems than your average project based on the builder, number of units, absence of parking garages, layouts, etc. etc).

People in this thread seem to have good experiences with agents even without having to sign an agreement...did that include providing the kind of information I'm looking for or was it just mainly finding potential purchase opportunities (which I generally think that I can do on MLS myself)? Any advice is appreciated.
 
My girlfriend and I are in the market for a new place, and we had originally planned to buy a resale house in or around downtown (say, Ossington to around Parliament, and King up to Bloor) but have noticed a few preconstruction townhouse projects on the market now that seem to offer good layouts and relatively good locations for a fairly low per-square-foot price (eg Motif Townhomes and Trinity Bellwoods Townhomes). Given that we were originally thinking resale, we wanted to get an honest opinion on the pros and cons of buying preconstruction, so we thought that it would be good to talk to a real estate agent. We looked on the web and thought that this site: http://truecondos.com/ looked fairly professional and had a lot of good information, however it doesn't appear that this guy is willing to talk to you unless you sign a buyer's agreement.

Now, from what I've seen a buyer's agreement generally doesn't seem to be a bad idea, but I'm worried that (a) this guy (or whoever we talk to) may be knowledgeable in the preconstruction area but may not know so much about the resale market, and (b) if we sign an agreement first he may just be interested in getting us to buy a place, when all we really need at this point is (basically) an honest appraisal of the potential problems with buying preconstruction (somewhat tailored, if possible, to the specific preconstruction projects that we're looking at, ie whether they may be more or less likely to have problems than your average project based on the builder, number of units, absence of parking garages, layouts, etc. etc).

People in this thread seem to have good experiences with agents even without having to sign an agreement...did that include providing the kind of information I'm looking for or was it just mainly finding potential purchase opportunities (which I generally think that I can do on MLS myself)? Any advice is appreciated.

That sounds a bit overboard. Of course I'll chat with people and go over the basics before signing a BRA. For the buyer, you have to build some sort of confidence in the Realtor before you sign up. And same for the Realtor - I have to get along with the client and think their expectations are realistic. But I don't book 5 evenings of showings without having a commitment because I'd be taking away from current clients availability.

PM me. We can chat about new/resale (as we do both). We can talk about certain projects and the general pros/cons.

p.s. Both Motif & Trinity Towns are great projects. I know the builer of Motif as well as the agent for both projects.
 
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My girlfriend and I are in the market for a new place, and we had originally planned to buy a resale house in or around downtown (say, Ossington to around Parliament, and King up to Bloor) but have noticed a few preconstruction townhouse projects on the market now that seem to offer good layouts and relatively good locations for a fairly low per-square-foot price (eg Motif Townhomes and Trinity Bellwoods Townhomes). Given that we were originally thinking resale, we wanted to get an honest opinion on the pros and cons of buying preconstruction, so we thought that it would be good to talk to a real estate agent. We looked on the web and thought that this site: http://truecondos.com/ looked fairly professional and had a lot of good information, however it doesn't appear that this guy is willing to talk to you unless you sign a buyer's agreement.

Now, from what I've seen a buyer's agreement generally doesn't seem to be a bad idea, but I'm worried that (a) this guy (or whoever we talk to) may be knowledgeable in the preconstruction area but may not know so much about the resale market, and (b) if we sign an agreement first he may just be interested in getting us to buy a place, when all we really need at this point is (basically) an honest appraisal of the potential problems with buying preconstruction (somewhat tailored, if possible, to the specific preconstruction projects that we're looking at, ie whether they may be more or less likely to have problems than your average project based on the builder, number of units, absence of parking garages, layouts, etc. etc).

People in this thread seem to have good experiences with agents even without having to sign an agreement...did that include providing the kind of information I'm looking for or was it just mainly finding potential purchase opportunities (which I generally think that I can do on MLS myself)? Any advice is appreciated.

Hi Hank,
sorry for barging in here. I'm not trying to be overly defensive or hijack the conversation you are starting, but I feel it's appropriate for me to respond since you do mention me by name.

I sent you an email to this effect already (please check your email if you have not yet), but I just wanted to post a scaled down version for any interested forum readers:

I apologize if my emails to you came off as meaning I would not talk to you without signing a buyer rep. agreement (BRA). This was not my intended message AT ALL. To be clear, my buyer clients almost never sign a BRA until the moment they submit an offer on a property. All I ask for from my buyer clients is their commitment to me, and in return I pledge my commitment to them.

My understanding of what you were asking of me (based on the emails you sent me), was different from what I am now beginning to understand after reading your forum post.

If you'd like to continue the conversation, you know how to reach me!​

[and now back to your regularly scheduled UT forum. haha]
 
May I pose the question to prosepective buyers, why would you not want to sign a buyer's representation agreement?

Maybe realtors can sift through fact and fiction and discuss if there are any cons to signing an agreement.
 
May I pose the question to prosepective buyers, why would you not want to sign a buyer's representation agreement?

Maybe realtors can sift through fact and fiction and discuss if there are any cons to signing an agreement.

The only con I see, is that you're committed to working with that Realtor for the set period of time. But it's a two way street - we are committed to be working for the buyer for the same period.

So do your diligence, find someone that has a good reputation, meet with them a few times to talk and see properties then decide if they're right for you or not!
 

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