Buyer/brokerage agreement

[metallicat]

About a month ago, I went and got a realtor to aid me in the search for property. Together, we signed a six-month buyer/brokerage agreement, which was fine by me. I didn't plan on getting another realtor. Fast forward to now, I have found a condo on my own, that is through the builder, and thus no realtor needs to be involved.

Would purchasing something like this break the contract I have with my realtor, and what does this effectively mean? I am not paying him for any of his services, I just figured this agreement between us was one of good faith more than anything, not to use another realtor.

Can someone explain what the 4 or so page document means in layman's terms?

[Nabber]

I hate to break it to you, but in layman's term it's a promise to purchase a property through that realtor you signed the contract within the time frame on the agreement, it's kind of a guarantee that the realtor gets paid whether it's a for sale by owner or through a builder where there is no commission. I've never used one myself but I'm sure a lawyer (Trout???) can confirm they're binding are you're most likely on the hook for the commission agreed in the buyer brokerage agreement.

I take it the builder won't offer anything to the realtor? I'd say speak with your agent about the contract, see if you can work something out. I'd recommend getting legal advice before you sign the purchase contract through the builder, just incase you have to pay the commission.

[metallicat]

I realize that, but I can't find anything in the agreement that talks about penalties for breaking the contract. My intention is not to screw my realtor over, but ultimately, all contracts aside, I have to look out for myself. Saving 30,000k is important to me.

I sent him an email about this, and I knew he wouldn't be happy and I could tell that he wasn't, but I am not sure how to go about this from here.

[Nabber]

That's because I'm not sure if there is a penaltly for breaking the contract, it's just kind of as it is, you can't buy a place from another realtor or from anyone else without a commission being paid to the first realtor. Is it fair? In some cases no. What if you realtors isn't doing a good job, or a family member offers you a great deal on a property?

Get info from a real estate lawyer, someone from RECA (real estate concil of Alberta), or your local real estate board. Find out all your options.

I'll ask around my office and see what others say, as I'm really not familiar with the contract at all.

[4X4]

OF, 2 things... First, the agreement is that if you buy something through a realtor, you'll use him or her. 2ndly, if you found this place yourself, ask yourself two questions: did the sales center offer any incentive to bypass the realtor? Chances are that the sales center made the commission in lieu of the realtor. If not, why bypass your realtor?
question 2: did your realtor help you enough to warrant a commission? Did he or she take you to a few properties before you flaked out? Did he or she flake out on you?

You're not bound to buy through your realtor, but you are bound to buy through your realtor if you use A realtor. that is the point of the buyers brokerage.

[Incinerator]

Originally Posted by oilers_fan

About a month ago, I went and got a realtor to aid me in the search for property. Together, we signed a six-month buyer/brokerage agreement, which was fine by me. I didn't plan on getting another realtor. Fast forward to now, I have found a condo on my own, that is through the builder, and thus no realtor needs to be involved.

Would purchasing something like this break the contract I have with my realtor, and what does this effectively mean? I am not paying him for any of his services, I just figured this agreement between us was one of good faith more than anything, not to use another realtor.

Can someone explain what the 4 or so page document means in layman's terms?

A few things:

Who was the builder? Did you visit the showhome without your Realtor and leave a deposit already? Most builders will pay your Realtor a referral fee at no cost to you if you visit their showhome with your Realtor and sign a form.

At 5.1 (a) did you put down any deposit?

If you did your Realtor may just settle for that amount. Provided that you didn't look at 30 places with him already and wasted 2 months of his time yet, for example.


At 5.2 on the buyer brokerage agreement, what did you guys put on there as brokerage remuneration? Did you initial it?

This is of utmost importance as it will determine how much is owed to your Realtor, if anything.

Did you tick "Yes" in 5.3 (a) (ii) on your buyer brokerage contract? Did you initial it?

If you did then your Realtor can go after the builder for the service fee, however, if you went to put a deposit down at the showhome without him the builder will not pay him, and you may be on the hook for the fee (varies from builder to builder - some pays $3000, some pays full 3.5/1.5)

In any case, those are the things you should look at first before consulting a lawyer, because most will charge you by the hour. If you offer troutman a beer he just might be nice enough to look into it for you though.

[4X4]

Just reread the thread and have to emphasize that you're not on the hook for anything. The brokerage agreement only establishes that if anyone is getting paid a commission, it'll be the realtor noted, and that you will not work with another realtor during the time you have agreed to work with the first realtor.
If your realtor first brought you to the condo's sales center, he is entitled to the commission (whatever it may be). If you arrived there by your own accord, you don't owe anything to anyone.
I would advise you not to call this realtor when it comes time to sell, however.

[Incinerator]

Originally Posted by oilers_fan

I realize that, but I can't find anything in the agreement that talks about penalties for breaking the contract. My intention is not to screw my realtor over, but ultimately, all contracts aside, I have to look out for myself. Saving 30,000k is important to me.

You do realize by foregoing your Realtor's representation contrary to the Buyer Brokerage Agreement that you signed, you have not even saved a penny considering you bought from your builder?

The purchase price of a new home from builders are the same whether you are represented by a Realtor or not. The only difference is whether the builder will have to pay your Realtor, if you don't have a Realtor the builder will just pocket the fee already built into your purchase price.

[4X4]

Originally Posted by Incinerator

You do realize by foregoing your Realtor's representation contrary to the Buyer Brokerage Agreement that you signed, you have not even saved a penny considering you bought from your builder?

The purchase price of a new home from builders are the same whether you are represented by a Realtor or not. The only difference is whether the builder will have to pay your Realtor, if you don't have a Realtor the builder will just pocket the fee already built into your purchase price.

###

[Incinerator]

Originally Posted by 4X4

Just reread the thread and have to emphasize that you're not on the hook for anything. The brokerage agreement only establishes that if anyone is getting paid a commission, it'll be the realtor noted, and that you will not work with another realtor during the time you have agreed to work with the first realtor.

From my understanding of the BBA, clause 6.3 (a) and 6.4 are contrary to your claims, although in most cases I don't think it'd be worth his Realtor's troubles to go after him based on that.

[4X4]

Originally Posted by Incinerator

From my understanding of the BBA, clause 6.3 (a) and 6.4 are contrary to your claims, although in most cases I don't think it'd be worth his Realtor's troubles to go after him based on that.

That'd be mighty sad if true. I've been licensed for 5 years now, and it has never crossed my mind to chase down a commission. Then again, I really only deal with investment real estate. And I suppose the subject at hand is a big reason why. Residential real estate is a dog eat dog world right now.

My amusement is 50% based on the fact that realtors actually use the BBA prior to writing an offer, and 50% based on the idea that buying without a realtor seems like a good idea to anyone, especially after signing a BBA. Your 'realtor' should have told you that you don't pay him, the seller does. To use him costs you nothing. Therefore, why would you go into a negotiation like this unrepresented?

[4X4]

I'm still a little amused about the BBA. Apparently it has been reworded since I returned from overseas. But the essence is still the same. It's like a no-cheat agreement. Like taking a girl out on a date and at the end getting her to sign an agreement that she'll call you if she wants to go out anywhere else, for the next 6 months.
That may sound a little harsh to the (likely) dozens of licensed realtors reading this forum, but seriously. If you can't secure agency via communication and solid effort, you need to choose a different career.

[Nabber]

Originally Posted by 4X4

That'd be mighty sad if true. I've been licensed for 5 years now, and it has never crossed my mind to chase down a commission. Then again, I really only deal with investment real estate. And I suppose the subject at hand is a big reason why. Residential real estate is a dog eat dog world right now.

You're right and a lot of realtors wouldn't chase down a commission like this, but the ones that get their clients to sign buyers brokerage are the types that will, otherwise why even present the contract in the first case?

When buyers brokerage started my broker was always telling me to get my clients to sign it, that way even if they bought a home by owner where there's no commission, I'd still get paid. Did I do it, NO, my job is to find the best deal for my clients, not take as much money as possible. If that situation happens, I'd just chalk it up as a loss and hope that client refers a friend or family member to get me back, especially if they found the place themselves.

There's even clauses in there stating if the client decided not to buy, any reasonable expenses would be reimbursed, imagine that, not finding a home and having to pay money, ouch. And I'm sure there's realtors out there who inforce this.

[metallicat]

Just got up and have to head to work, but I'll answer a few of the questions.

Nothing has been bought or paid for in terms of the new place. It is a condo, built by Carrington Properties, no down payment has been paid. Very informal visit to the sales office, with no realtor present.

On the agreement, 5.1, there is zero money put down.
At 5.2, there is also zero.
At 5.3 (a) (i) it is checked "no" with my initials.

As for where I said that I saved money...all the used condo listings that my realtor has had emailed to me, and all the ones I've been able to find on both MLS and Comfree, are listed well above the price of this new place. For whatever reasons, a very similar suite is selling by the manufacturer at 207k, as opposed to the lowest priced used suite at around 240k.

The last thing I am trying to do is screw my realtor around. This is my first time buying a home, and he has been very helpful. In the past month, we went and looked at houses one evening. Other than that, we have talked on the phone and through email quite a bit. I think he has done a fine job for me, it's just that the market here despite crawling backwards, has precluded me from buying anything yet. That is why I was surprised to find these brand new, not yet finished condo's at the price they are at.

I already sent an email to my realtor yesterday. I am trying to be totally honest with him, and if what I have done or what I choose to do causes the contract to be broken, I guess I will have to do what I have to do regarding compensation.

Thanks for all the help once again, guys.

[Nabber]

Originally Posted by oilers_fan

On the agreement, 5.1, there is zero money put down.
At 5.2, there is also zero.
At 5.3 (a) (i) it is checked "no" with my initials.

Sounds like you are being fair to your realtor, as well he's being fair to you. I believe he just wanted you to stay loyal to him, which you did, unfortunate he couldn't earn something from the builder but it happens. If there is nothing written in 5.2 then you should be fine cancelling the agreement, that part states what the realtor will make from working with you, if it's blank then you're not on the hook for anything. Ask him for a buyer brokerage termination agreement - check the unconditional termination box. Maybe you could tell the builder your situation and they may kick back a small commission to your realtor, if not I wouldn't worry about it.

[Incinerator]

Originally Posted by oilers_fan

Nothing has been bought or paid for in terms of the new place. It is a condo, built by Carrington Properties, no down payment has been paid. Very informal visit to the sales office, with no realtor present.

On the agreement, 5.1, there is zero money put down.
At 5.2, there is also zero.
At 5.3 (a) (i) it is checked "no" with my initials.

Didn't sound like he tried very hard to tie you down, if you did not fill out any registration forms or leave your name the first time, wait a couple weeks and bring him back to the builder's sales centre when you've decided to buy. I'm sure both of you will be happy with this solution.

[metallicat]

They did tell me though that they do not deal with realtors, and my realtor told me Carrington is not one of the companies that they have a co-operation project with.

Still waiting to hear back for my realtor the second time, he's probably pissed off. Thanks for all the advice guys, I appreciate it.

[Winsor_Pilates]

Originally Posted by oilers_fan

They did tell me though that they do not deal with realtors, and my realtor told me Carrington is not one of the companies that they have a co-operation project with.

That's really odd. My company absolutely loves realtors. We treat them like gold, and they return us all sorts of clients. Not sure why a condo seller would want to exclude such a large tool. I guess cutting costs is more important to them.