real estate

Details matter in real estate agent contract

Steve McLindenQuestionDear Real Estate Adviser,
I had no desire to sign an exclusive real estate agent contract. But an agent showed me a house I really liked and when I went to put in a bid, she said I had to sign with her to get it. So, I signed.

However, the owner wouldn't take my bid, so I asked the agent to rescind the agreement. She now says I have to use her. Even though she knows my price constraints, she hasn't shown me even one other house in my range. How can I see houses with other agents and escape her?
-- Johnny B.

AnswerDear Johnny,
The contract you signed should explicitly lay out the terms of engagement -- and disengagement. But unless you added something to the effect that, "Either party may elect to terminate the agreement at any point prior to the location of a suitable house" -- which I suggest all buyers add to their agent agreements -- you may be stuck with her for the duration of the listing term, at least technically.

I say "technically" because of the questionable way she got you to sign your "Johnny B" on the dotted line. Arguably, she may have misled you to get your business, at least based on what you tell me.

There is also a chance the problem might simply come down to poor communication. If that's the case, ask to meet with her, reiterate your concerns and maximum price range, and tell her how she needs to best help your cause. She may, after all, be laboring under the misapprehension that she was working hard for you. Emphasize you expect immediate, directed action this time.

However, once distrust enters the agent-buyer relationship as it has with yours, it's usually a good idea to move along. If that's how you feel after the discussion with the agent, ask her to give you a form called a "termination of buyer agency," which would cancel any written agency agreements.

If the exclusive agent agreement you signed includes a cancellation fee and she demands that, try negotiating a smaller fee with her, assuming you feel it's worth it to get out of the contract. If she balks and tries to hold you to the letter of the original agreement, you'll have to take other action, unless the agreement is a short one -- say 60 or 90 days -- and will run out in a few weeks anyway.

If push comes to shove, tell her you believe you were deceived and that she acted in bad faith. Then, threaten to file written complaints with her agency, the state real estate commission and the local board of Realtors. Odds are good she will relent. (By the way, most good agents will not want to work with someone who doesn't want to work with them!)

Let this serve as a lesson to other readers. Don't just show up at an open house and allow an agent to sign you up on the spot so you can bid on the house. Get your own buyer's agent, but do phone interviews with at least three candidates first.

If you do sign another exclusive agent agreement, make it for no more than three months this time. Plus, be sure to add a proviso allowing you to terminate at will.

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

Read more Real Estate Advisercolumns and more stories about mortgages. To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page, and select "Buying, selling a home" as the topic.

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