Do I Need to Give a Buyer's Agent a Commission if I Find a Home Without Her?
Full Question:
Answer:
A real estate broker offers services as agent in matters involving the sale, purchase, rental, and financing of real property. The terms of the brokerage agreement determine the character of the services to be rendered as well as the broker's right to compensation in particular circumstances. In some cases, disclosures may be required to be made, depending on the state law that applies.
A listing agent is an agent of the seller who markets the seller's property and represents the seller during the sale and the closing of the seller's property. In a sale by auction, he or she handles many of the traditional real estate functions and shares the commission based on the amount of involvement and the relationship defined by the two parties.
An exclusive buyers agency agreement will specify that the buyers agent is going to be paid a commission and that if you do not pay then the buyer may have to pay. An exclusive agency listing is a real estate contract whereby the owner of a property appoints a single real estate broker as his or her exclusive agent.
Under this type of listing, the seller can only list the property with one broker until the listing expires or the property is sold. An exclusive agency listing only guarantees a broker commission if the listed property sells through a real estate agent or real estate company. However, if the owner of the home finds a willing buyer without the assistance of a broker, the broker will often not be eligible for any commission. The answer depends on the terms of the contract in each case.
Some buyer's agency agreements contain a "release clause" just in case you find out you just don't like your agent. This will allow you to sever ties without any future problems. The type of agreement you sign with a buyer's agent will determine how commission is owed. A limited agency agreement may stipulate, specifically, for what the agent will be paid. For instance, the agreement might state that if you find a home on your own, then no commission will be paid. Typically, however, if the agent has been otherwise very helpful and attentive, most buyers still pay some type of commission even if the agent was not involved in finding the home they end up purchasing. One potential problem with signing a buyer's agency agreement may come with a blanket clause stating that the agent gets a commission on any home purchase. If you think it is likely that you will find something without the help of the agent, then you may want to have it included in the agreement that a home you find on your own (an FSBO, for example) will not require payment of the standard commission.
See also:
http://articles.baltimoresun.com/1998-08-23/business/1998235014_1_buyer-agent-exclusive-buyer-agency-agency-contract