When is a Buyer Broker Agreement abrogated, anyway?
Is there a law stating that once your contract with your realtor is up that you must include them on the deal of the purchase of a home that they showed you?
No such law.
Feeling relieved? You can stop that right now.
For, while there is no law binding you to your someday-to-be-former Buyer’s Agent, you may well have signed a contract that says that someday never comes. Or at least not soon.
Consider this, from the Arizona Association of Realtors Buyer Broker Agreement:
e. Buyer agrees to pay such compensation if Buyer, within ____ calendar days after the termination of this Agreement, enters into an agreement to purchase, exchange, option or lease any Property shown to or negotiated on behalf of the Buyer by Broker during the term of this Agreement, unless Buyer enters into a subsequent buyer-broker exclusive employment agreement with another broker.
The blank is filled in with a number, often 30, sometimes 90 — although it could be anything, so long as it is something. If the you and your agent mutually agreed to 1,001 days, it will be two-and-three-quarters years before you are divorced.
Unless… You sign another Buyer Broker Agreement.
This kind of hold-over language is common in real estate employment agreements. On the one hand, you can say, “Well, jeepers, why shouldn’t the poor goofball get paid, even if he didn’t get the job done by the deadline?” But on the other hand: “Exactly how much time do you need, you poor goofball?”
The real reason for that kind of language is to frustrate betrayal. If you make a whispering deal with the Listing Agent to cut your Buyer’s Agent out of the deal, that language cuts him right back in.
So how long is long enough to protect the Buyer’s Agent without unduly ham-stringing the Buyer? How about 15 days?
Or how about zero? My attitude is, if you’re done with me, I’m done with you. Whatever you do after we’ve divorced each other is your business.
But different agents will see this issue differently, and this is why buyers and sellers need to read, mark, learn and inwardly digest the contracts they are asked to sign. Very probably, the form you are looking at is not filled out to your advantage…
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ardell dellaloggia says:
Greg,
As you know, I generally don’t use buyer agency agreements. I will add to this thread that geographic constraints should be added.
Some of the worst cases I have seen were in CA where there was no limitation as to “Where in CA?”. A buyer signed a contract in Newport Beach and ended up moving to Pasadena. The job offered in Newport Beach was trumped by a better offer in Pasadena.
There was no way the Newport Beach agent could service this client in Pasadena, but the agent wouldn’t let the buyer out of the contract.
October 5, 2006 — 10:59 am
Greg Swann says:
> There was no way the Newport Beach agent could service this client in Pasadena, but the agent wouldn’t let the buyer out of the contract.
Excellent point!
October 5, 2006 — 11:07 am
John K says:
I think I understand what you’re saying, but at some point, doesn’t this end up becoming an issue between the agents? If both are Realtors, then the issue of compensation will be dealt with in arbitration. This is true, as well, if both agents use the local MLS, at least here in Boston. It’s part of the user agreement.
The buyer, much as he or she may like, won’t be able to determine who gets paid what, at closing.
I think.
October 5, 2006 — 4:07 pm
helldigger says:
This is proof that no agent should be used at all.
A buyer should find a home that the seller will sell them directly.
Both parties benefit that way.
October 6, 2006 — 2:34 pm
CILLA says:
IS THERE A WAY TO CANCEL THE BUYER-BROKER AGREEMENT?
January 7, 2007 — 6:08 pm
Greg Swann says:
> IS THERE A WAY TO CANCEL THE BUYER-BROKER AGREEMENT?
We include a cancellation provision in every employment contract we write. If there isn’t language like that in your Buyer-Broker Agreement, then it can only be cancelled by mutual agreement. Using the Arizona Association of Realtors Buyer-Broker Agreement, your current contract would be abrogated if you were to sign another Buyer-Broker Agreement with a different agent. This may be no help. For now ask your agent (or your agent’s broker) to cancel the contract. If they won’t, wait out the term before proceeding.
January 7, 2007 — 6:22 pm