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My daughter & her husband are looking for a first time home. They hooked up with a realtor and made a bid on a short sale home (they lost the home). During the paperwork, the realtor slipped in a contract stating that they are now committed to this realtor for 6 months. If they decide to go with another realtor, legal action will be taken against them. Is this ethical? My daughter & husband have been the ones to locate the houses to see, and they lost a home because the agent didn't return their call for 36 hours. They feel trapped & frustrated. Do they have any options?
Yes they have options and they don't have to continue using that Realtor. They need to either talk with the Realtor and tell them that they don't want to continue using them and if that doesn't work then they need to talk with the Principal Broker of the office with which he is affiliated. Now if they end up purchasing a house that they saw while the agreement was in force that Realtor may be due his commission.
I use Buyer Representitive Agreements with my clients and I assume that this is the type of form that you say was "slipped in" that they signed. It sounds to me like they may have signed this form without fully reading or understanding it, or having it explained. I always give this form to potential clients ahead of the time to sign it so they have time to read it. I also fully explain both their obligations and my obligations as relates to the agreement. They need to read and understand any agreement before they sign it. Sounds like an inexperience error on their part. If I have a client that doesn't want to work with me for legitimate reasons then I cancel the agreement. Life's too short to work with someone that doesn't want to work with you.
It's unfortunate that people don't read what they sign. People tend to get excited when they write up an offer and don't always think through what is going on.
The buyer agency agreement is with the brokerage and not with the agent (unless the agent is a principal broker) so as gbone suggested go to the principal broker and ask to be released from the contract. If they won't release them, then ask to be assigned to another agent who better fits their needs.
I agree with both gbone & silverfall. I'm sure your daughter & her husband are disappointed that the short sale deal fell through - crazy as it is the fact is most do. Short sales are really nuts these days. Nevertheless, I question that a buyer's agency agreement could be "slipped in" - ours in Colorado is 1/2 pages and nearly each page has something to fill in or check. It would be difficult to slip in that many pages without being noticed. Additionally, most agents - including me - seem to have a script to explain each document. For me, I find it's almost an auto pilot type thing - but an explanation of each document is made. It's possible that the agent in question didn't do this - but it's also possible that your daughter and son in law didn't pay attention. Frankly I can't image anyone signing papers with no clue what they were.
FYI - A six month term for a buyer's agency is very reasonable for a short sale. Most short sales can take 6 months to get a response from the seller! Like I said - it's crazy these days!! I'm sorry they lost the deal - however if they were not tied up by the short sale offer for too long - they should consider themselves lucky as they are now free to make offers on other properties.
All this said, if they no longer wish to work with the agent - ask the principal broker for another. It really should not be a big deal.
Nevertheless, I question that a buyer's agency agreement could be "slipped in" - ours in Colorado is 1/2 pages and nearly each page has something to fill in or check. It would be difficult to slip in that many pages without being noticed. Additionally, most agents - including me - seem to have a script to explain each document. For me, I find it's almost an auto pilot type thing - but an explanation of each document is made. It's possible that the agent in question didn't do this - but it's also possible that your daughter and son in law didn't pay attention. Frankly I can't image anyone signing papers with no clue what they were.
All good agents go through these agreements very thoroughly, but I have also had clients tell me that when they interviewed multiple agents to list their home, that about 1/2 of agents didn't go over the required agency disclosure form.
Unfortunately, I can see an agent giving someone a contract and not really explaining what it means. First timers are just so naive and really need a good ethical agent to educate them about these things. Sometimes first timers just don't really "get" things even when they are explained just because so much information is flying at them, it's hard to digest it all.
Silverfall,
I don't want to engage you in this thread since I don't feel another exchange with you will be helpful to the OP.
Please re-read my post. In it I said,
"It's possible that the agent in question didn't do this - but it's also possible that your daughter and son in law didn't pay attention. It's possible that the agent in question didn't do this - but it's also possible that your daughter and son in law didn't pay attention. "
One correction to my own post - I meant to write our buyer's agency agreement is about 1/2 a dozen pages! - not 1/2 pages. Oops.
I work with many first time home buyers - they seem very able to understand the documents. I have a higher regard for first time home buyers than many brokers might. I am an excellent broker.
Nevertheless we know there are some bad real estate agents out there!
To get back on track, again I suggest the OP's daughter & son in law contact the responsible broker and be assigned to another agent.
Best wishes all.
It's unfortunate that people don't read what they sign. People tend to get excited when they write up an offer and don't always think through what is going on.
The buyer agency agreement is with the brokerage and not with the agent (unless the agent is a principal broker) so as gbone suggested go to the principal broker and ask to be released from the contract. If they won't release them, then ask to be assigned to another agent who better fits their needs.
Sheesh we're slackers out here...our BA agreement is 1 1/2 pages long. What in the world do you have written on 5 pages, or is it larger font?
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