. Need legal advise

clampett

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My Daughter and Son in law signed a 8 month exclusive buyer agency agreement and she would like to get out of it. Every house my daughter has looked at, she has found herself. The agent hasn't done anything for them. Now my daughter is looking at a neighbors house that is not yet on the market. If she buys this house she will have to pay the agent 2 1/2 % of the sale.
If she hired an attorney what do you think her odds are of getting out of this agreement.
 

C. Stockwell

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I would have them talk to a real estate lawyer to review the realtor agreement. My suspicion is that the agreement's for a set period of time or has contingencies that would allow the buyer to walk out. But I'm not a lawyer and this is a gun forum, so YMMV.

Edit: re-read and saw the agreement's for eight months. Easy then - wait it out and keep talking to the neighbor.
 
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fencer

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Very simple. Have your daughter tell her that she wants a different agent, because she sucks at her job. Tell her that she is stupid, lazy and useless and that every house they have looked at they found themselves. The agent will probably rip up the agreement infront of her.

OK, maybe not, but it's worth a try!
 

PennyPincher

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Nope. Just have her call the BROKER, the person this agent works for. Have her tell the broker what has gone on and why she wants out of the contract. She should NOT mention that she has found a house she likes.

BUT - there's more to representing a buyer than "finding" them a house.

Also - both the buyer and seller usually think they will save the commission when keeping agents out of it. Both parties can't save the commission but they could "split it" in the price.

And there are a LOT of things to be done when buying a house - contracts, inspections, someone holding the deposit monies and if the deal falls apart how and when that money gets released and to whom.
 
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Don't talk to the broker of record -- as Pennypincher mentioned, the broker can and probably will try to retain the business by assigning a different agent from the office. Also don't engage an attorney. It would probably be a waste since generally exclusive agency agreements are valid and enforceable. The dissatisfied customer approach is their best bet. Talk to the agent, point out how the agent did not point them to a single house they were interested in during the x months since they signed, and how the relationship is not working out. The agent will get the broker to sign off on a termination. Just be sure the "tail" protection period is terminated also.
 

GM-GUY

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How long into the 8 months? If 2 weeks and the only houses are ones she found - meh, ethics; go through the broker and next time don't sign. If 6 months and the broker has never approached them or shown them a house without them asking for it - tell the broker you are out. Professional Abandonment (works with lawyers - don't know about realtors) but if they don't like let them know they will get a formal complaint to the Board of Realtors and copy other realty companies on it.

My experience: My wife and I signed an agreement with a realtor (exclusive deal, yadda - yadda). She showed us several homes each weekend. Ended up letting it expire and buying a house out of her area - and no issues arose.

The benefit (in a hot market) gets you a call before the MLS has hit the internet and the sign has gone up in the yard.
 

xjma99

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This is why you never sign those agreements.
Who the f*** signs one of these agreements anyways?? It’s like getting married before a few test runs, not a great idea! I’ve always had a non binding agreement and worked with the agent the whole way through because they did a good job and they earned the business. Any decent agent shouldn’t have a problem with a non binding arrangement. Basically, I’ll help you out and if we make an offer on a house, I’m your guy at that point forward. If not, no harm no foul. Either party walks at any time.

IIRC I think I signed a thing saying I would not work with another agent simultaneously unless I terminated relationship with first agent, first. To me, this seemed fair and honest. Again, either party can terminate at will, at any time prior to signed contract.

unfortunately, looks like they’re gonna have to wait out their mistake.
 
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xjma99

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Shit, it’s not her money, the seller has to pay out checks to both realtors at the title company anyways, so no skin off their back! As long as said agent can guide them through the process smoothly, it really shouldn’t matter to them anyway.
There are some people who are capable of transacting real estate without an agent. 99.99999% of first time home buyers are not those people.
Getting a lawyer involved to try to get out of their mistake is going to cost more than it’s worth....unless they’re buying multi million dollar real estate.....
 
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Shit, it’s not her money, the seller has to pay out checks to both realtors at the title company anyways, so no skin off their back! As long as said agent can guide them through the process smoothly, it really shouldn’t matter to them anyway.
There are some people who are capable of transacting real estate without an agent. 99.99999% of first time home buyers are not those people.
Getting a lawyer involved to try to get out of their mistake is going to cost more than it’s worth....unless they’re buying multi million dollar real estate.....
Why would the seller have to pay out checks to both realtors?
 
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None so far as I know. I’ve bought 9 houses. Always had a buyers agent. Never ever signed a contract with them. Never would. What’s the point?
Some agents will not work without one.

I signed such a contract once (never bought a house that year, decided to stay put). It had written and signed "Does not apply to sales not involving a real estate listing found without help of agent".

If the house you buy is subject to a real estate listing, someone on the buyer's end gets a cut of the action, and it does not generally increase because the agent represents the buyer. The only time the buyer's agent increases the cost is if you find a FSBO.

Why would the seller have to pay out checks to both realtors?
The seller doesn't write checks. It is siphoned off the proceeds at closing. I have seen agents demand a certified funds deposit equal to their commission to lock in a P&S so they can get paid if the buyer backs out and is not covered by one of the exit contingencies (inspection, mortgage, etc.
 
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Why would the seller have to pay out checks to both realtors?
They don't. When we sold our house we paid the percentage we agreed to the listing agent. The agents seem to have an agreement among themselves that if the buyer has an agent the listing agent splits their commission with them. A buddy of mine sold a house without a listing agent. When buyers showed up to see it, their buyer's agents would often try to convince him that he would have to pay their commission. He just told them as far as he was concerned they were s.o.l. if their client bought his house and that was the end of it.
 

ReluctantDecoy

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One thing to check (and hopefully not included in their agreement) is a cancellation fee clause. Other than that, there's probably a mutual agreement termination clause and a mediation clause to work through in order to get out.

I do like Fencer and Penny Pincher's idea though of talking with the broker for agent reassignment if they are still open to view other properties, but it sounds like they are in a tough position with looking at the neighbor's house already.
 
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I was new to MO, and looking for a house. Went with a recommended realtor. Bottom line, as I later found out, this was a part time gig for her. So when I wanted to see a house, it was always like "Ok, I'll see if we can do this Saturday" it was Monday when I asked.

I was working harder than she was, I was aggressive about looking at properties. Id take long lunch breaks, go after work, during work, before work, anytime.

She just sat on her ass I felt. So there was a house I wanted to see. She was busy, so I called the listing agent and he showed me the house. She was all sorts of pissed and wanted me to sign a contract with her and I refused. We soon parted ways.

Back when I bought my first house. The realtor came to my house, picked me up, drove me around to different properties she had researched based on my requirements, and generally spent a lot of time with me and worked for me.

Nowadays, the past few houses I've bought, I did all the work, all the searching, pretty much new I wanted these properties before I went to look at them, so long as there was nothing crazy once inside. These realtors now are like " OHhhhhh waaaaa I work so hard for you, I know we've had about 15 minutes of face time but I think thats worth thousands of your dollars waaaaaa." Yea I know they do paperwork and such but c'mon, really?
 

Dennis in MA

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Forgive me, but. . . .



EIGHT MONTHS!!!?????!!!!!????


Dubya-Tee-Eff??? My gosh. Flashbacks to the wedding scene in Caligula for crying out loud.

I couldn't imagine as a SELLER signing a contract for more than 3 months. Eight months is an eternity.

The good news is that they learned a valuable lesson. Most of my most valuable lessons I learned the hard way. And most-most of those I only had to learn once.
 

clampett

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Thanks for all the responses.

My Daughter has 6 months left on the 8 month contract. I have read the contract over several times and it appears to horribly favor the buyers agent. Their is no escape clause.
Their is a clause that states, if the buyers broker, for any reason is unable to collect the full amount of her commission from the sellers agent, then my Daughter will have to pay it herself. This clause really pisses me off because the agent assured my daughter that she wouldn't have to pay her anything.

Their is another clause that states that any disagreements will be settled through binding arbitration with the local board of realtors.

As some of you have said-- My Daughter has learned a valuable lesson. Hopefully it won't be an expensive one.
 

PennyPincher

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What is the benefit for the buyer in these agreements?
The buyer's agent has a fiduciary responsibility to the buyer in this case. Actually, any buyer's agent, with or without contract has a fiduciary responsibility to the buyer. The problem is the default position is that the agent works with FOR the seller and therefore owes that fiduciary responsibility to the seller.

A buyer's agent should educate the buyers to the value of the houses they are seeing and market conditions HONESTLY. If the market is falling/rising, how quickly things are going under agreement, whether the property is over/under priced based on comparable sales and market conditions etc. The buyer's agent is also responsible to perform "due diligence" on a property - ie there's no "seller's disclosure" so the buyers agent looks up and sees the seller has owned the property for 18 years and learns they have lived in continually by questioning the seller's agent. So the buyer's agent asks for a written seller's disclosure. If a seller refuses, that would raise a lot of red flags. Buyer's agent may have noticed or been told that a renovation or addition had been made. They call the town to see if permits were pulled and inspections done if necessary. This is just a few things. I guarantee you that very few agents are doing these things and certainly not the seller's agent for the buyer. Since almost all transactions come from the MLS and there are commissions paid out to all agents from the broker with the listing, a contract for x% to the buyer's agent is not an issue.

I have been licensed in 3 states. 1 as a broker. I would not buy a property today in ANY state without a buyer's agent.
 

PennyPincher

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Don't talk to the broker of record -- as Pennypincher mentioned, the broker can and probably will try to retain the business by assigning a different agent from the office. Also don't engage an attorney. It would probably be a waste since generally exclusive agency agreements are valid and enforceable. The dissatisfied customer approach is their best bet. Talk to the agent, point out how the agent did not point them to a single house they were interested in during the x months since they signed, and how the relationship is not working out. The agent will get the broker to sign off on a termination. Just be sure the "tail" protection period is terminated also.
If there is one it would only apply to those houses that the buyer's agent had shown them. Not any house the buyer learned of on their own, through other means and certainly not a home that is not on the market which the agent has not been involved with.
 

PennyPincher

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Why would the seller have to pay out checks to both realtors?
They don't (to be technical) if the house is listed with a broker. If it's listed, from the proceeds of the sale, a check will be cut (or EFT) to the Broker of record (the agency). The broker will distribute funds directly to his/her agent that listed the property. The broker also issues a check (EFT) to the broker for whom the agent works that brought the buyer to the deal. The agent working with the buyer receives their pay from their broker.

If it is a FSBO, the seller can only have funds transferred to the broker of the agency for the buyer's agent and then the agent is paid from the broker. If the seller refuses to pay the broker and the buyer has a contract with an agency, they are obligated to pay the agency/broker. All contracts for real estate listings or buyer's agents belong to the broker.
 

TLB

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The value of the buyer's agent comes at the time to negotiate, if they're good and know their stuff.

I was new to MO, and looking for a house. Went with a recommended realtor. Bottom line, as I later found out, this was a part time gig for her. So when I wanted to see a house, it was always like "Ok, I'll see if we can do this Saturday" it was Monday when I asked.

I was working harder than she was, I was aggressive about looking at properties. Id take long lunch breaks, go after work, during work, before work, anytime.

She just sat on her ass I felt. So there was a house I wanted to see. She was busy, so I called the listing agent and he showed me the house. She was all sorts of pissed and wanted me to sign a contract with her and I refused. We soon parted ways.

Back when I bought my first house. The realtor came to my house, picked me up, drove me around to different properties she had researched based on my requirements, and generally spent a lot of time with me and worked for me.

Nowadays, the past few houses I've bought, I did all the work, all the searching, pretty much new I wanted these properties before I went to look at them, so long as there was nothing crazy once inside. These realtors now are like " OHhhhhh waaaaa I work so hard for you, I know we've had about 15 minutes of face time but I think thats worth thousands of your dollars waaaaaa." Yea I know they do paperwork and such but c'mon, really?
 
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