I am buying a property without an agent the agent for the seller wants me to sign brokers agreement. Ethical?

Question

I saw a property listed in paper, contacted the sellers agent. Made an offer and it was accepted. Later when we have reached an agreement, the sellers agent asked me to sign a Brokers Agreement with him. I do not feel that this is fair. I would have gotten an agent myself, if I had to . Why should I sign with him. This sounds unethical to me. Sounds like he is double dipping. Please advise, thanks

Answer 1

You are right to hesitate.  Don't sign it.

Answer 2

An RE agent can sell to an individual, but can not be the Sellers agent and buyers agent on the same property. that is not true, i brought a house and the seller was the real estate agency i dealt with, but i dealt with another agent, in the company that represented the seller.

it could be ethical, however get yourself a lawyer, I had a lawyer who represented me, and I got the house.

with all diligence, get that lawyer, be careful, sorry to say this, these people here are right, dont sign nothing just yet.

you would then be bound by the broker who is selling the real estate, make sure u are well prepared too.

try trulia.com for other comparable houses in your neighborhood.

good luck man

Answer 3

Sounds like the seller negotiated to where the selling/broker would receive a lesser profit, usually 3.5% of the sale instead of 7%, which is the normal percentage and it is probably a higher dollar value house.

Best would be to hire your own real estate attorney to check it out; if not, does sound legit, much depending in the terms and conditions.   Read the fine print yourself, or if you do not feel comfortable, hire an attorney to protect your interests.

Answer 4

This agent is attempting to engage in dual agency

Def: Some states permit a real estate licensee to potentially act as a dual agent, that is, represent more than one party to the transaction. A licensee may legally act as a dual agent with the written disclosure and informed consent of a consumer in form required by law.

I don’t like the practice. Whether it’s unethical or not depends on the agent’s ability to not let what you say slip to the seller, and not let what the seller says slip to you. It’s hard, but not impossible.  I don't really trust agents who will do this. You don’t have to sign the agreement. Just explain to this agent that you don’t want their representation.

If this deal doesn’t work out, I do encourage you to get your own buyer’s agent so you’ll have some help on the next deal. Their commission is shared with the listing agent, so with the house in question, you’re handing the listing agent the money that should pay for your independent representation.

Answer 5

Your "double dipping" is called Dual Agency, that is, the agent represents both buyer and seller and its not a concept that everyone understands well.  Its not unethical but it may or may not be permitted in your state.  You should have your own agent.  One agent representing both sides can be done, but err on the side of caution and find your own agent, they will be paid by the seller.  Keep this in mind:  If there is only one agent for both sides, whose interest will the agent have first yours, or the sellers?

Answer 6

He is double dipping, but it is all legal.   He should have had you sign this before the offer was presented, it was not legal to present your offer w/o a contract.

You can either sign or walk from the deal, but as it is now it is not legal and escrow will not be proceding.  He can not be your agent w/o the signature and you have no idea how to be your own agent (the work has not really started yet).

Answer 7

Legal? Yes.  Ethical?  You decide.  is it common?  sure.

Most transactions involve 2 agents, a buyers agent and a sellers agent.

The agent fees are paid for by the seller.  Usually a percentage of transactions, say 6%.  Because of that, in reality, both agents are working to maximize the sales price, while making sure the deal goes thru.  Seller agent works on the seller, Buyer agent works on the buyer.

When there is only one agent, you have an advantage.  I have heard of cases where seller agents who s***w the seller by not informing the clients of all deals.  Instead, they sell to a buyer they are representing because they get the full 6%.

Say the property is worth 100k.  If you have an agent, he will only get $3k.  If you don't, he gets $6k.  If he convinces the seller to sell to you for 90k, he still pockets $5,4k.  Still alot more than $3k.

With 2 agents, both agents are really trying to see if you will pay $110k.  that way, they both get $3300.

I am no ways saying any agent is unethical, but just showing how the money flows in this case.  

Good agents make alot of money, knows alot of other agents, and have the ability to make buyers and sellers feel like they benefitted.

Answer 8

Please remember that a buyers agent never gets paid by the buyer.  The seller has to pay.Yes, there fore it is a conflict of interest.  An RE agent can sell to an individual, but can not be the Sellers agent and buyers agent on the same property.  When two agents- a buyer and seller are on a property together, then they have to split commission. What they are trying to do is prevent you from getting a buyers agent so they can get all of it.  Be careful.

A real estate agent is kind of like a lawyer.  They have their clients best interest in mind.  They make sure that the client's transaction is done legally, and will get the most out of the sale.  Think about it, if you are not paying them, and the seller is, do you think they will give you the best price, or make sure the inspections are completed right, or will they just want to make as much money as they can fast?   Please get a buyers agent.

Answer 9

It's not unethical if the agent represents only the seller then he can have you sign a no brokerage relationship notice which states he works for the seller and not for you however he does have to provide you with honest and fair dealing, disclosing all know facts that materially affect the value of the residence which is not readily observable to the buyer, and accounting for all funds entrusted to the licensee.

If he wants to represent BOTH of you then he has to get permission in writing from the seller that they are ok with this.  Usually you have to ask them to represent you before they'll do this.  If he does represent you both then his status goes from Single agent to Transaction Broker where he has to do all of the above but has limited confidentiality to both parties.

Sometimes its simply a disclosure agreement.  Ask him about it, ask him if he is trying to be your buyers agent.  It's not double dipping but if he does represent you and the seller then he does usually get double the commission for being both the buyers and sellers agent, however, when he does that he now has limited confidentiality to both of you.

You should never purchase a house without an agent or at least a real estate attorney, they weed thru all the bull and they help you thru the entire process from start to finish, it's never wise to purchase a home without one.

Ask him exactly what it is he wants you to sign and read it through before signing anything, if you don't want him to represent you then make sure he knows that.

Answer 10

You have a contract for sale with the seller.  You cannot "walk".  The agent is already "double-dipping"  whether you sign this other form or not.  There is no other company to share the commission with because you decided to give both sides to the listing company by calling off signs instead of having representation.

Whatever form he is asking you to sign, he should have had you sign it BEFORE the transaction.  And if it's a notice of the types of representation available, he should have given it to you on your first meeting, before discussing anything of substance.  You are supposed to know BEFORE you talk about your situation or the offer just who the agent is representing. - In all likelihood, his broker or office manager reminded him that he missed a form that's supposed to be in the file and now he's trying to get all his paperwork in order.

Be straighforward in asking him what the form is and what it's purpose is.  Who DID he represent during negotiations?  You are not obligated to sign it if you are unsure. - But you are in a contract with the seller.  You cannot walk away from that.