Today, most transactions with residential real estate are carried out with the participation of professional realtors who search for a buyer and seller, and also provide full support for the transaction. However, it is worth noting the fact that real estate agency services, as a rule, are provided on the basis of a written contract, and entail certain consequences due to the occurrence of unforeseen situations associated, for example, with the termination of the purchase and sale of an apartment or house. In order to secure a future transaction, it is first necessary to carefully study the contract and determine the responsibilities of all parties.
Benefit from an exclusive contract for a realtor
Intermediaries want guarantees that you will definitely pay them the commission. They try their best to persuade you to sign an exclusive and talk about its advantages, without mentioning the disadvantages at all.
This is a good deal for the realtor, but not for the property owner. The advantages for you, as a customer of the service, are ambiguous, and there are a lot of disadvantages.
After signing an exclusive agreement, the realtor can relax and proceed with the sale in a measured manner - now all actions can be carried out only through him.
Without paying a 5% commission, you won’t be able to sell it yourself, because the documents for the apartment are in the agency. This is very beneficial for them, because there is complete freedom of action and no penalties for the realtor.
The seller can only wait and hope, and in case of termination of the contract, also pay the full commission to the realtor.
How intermediaries force you to sign an exclusive agreement
Realtors have already come up with many schemes of pressure and influence for signing an exclusive agreement. Here is one of these schemes. It is often used to hook the seller, and then sell in the usual ways, but with full confidence that they will pay a commission.
Straw buyer
One day a realtor calls you and says that there are very serious buyers and your apartment suits them in all respects. They have money and need to buy something urgently. He agrees on what time you can watch.
A figurehead comes to the viewing. This could be a girlfriend, boyfriend, husband, acquaintance, or any other acquaintance of the intermediary who can play the role of an interested buyer well. They look at the apartment and leave.
Deception
Then the call rings again. The realtor calls and says that the apartment is suitable for the buyer, but he wants to buy it through an agency. To do this, you must come to the office with documents for the apartment and first sign an exclusive sale agreement with the agency.
Article on the topic: How realtors deceive - all the schemes of scammers
As a rule, a happy seller, thinking that a buyer has been found and not understanding the intricacies of the exclusive agreement, goes to the agency and signs everything they say. Leaves the documents and waits for the transaction to be completed.
But he was simply deceived. A couple of days later the intermediary calls and cancels the deal. He says that the buyers changed their minds, there is no money, and the deal fell through.
Bottom line
As a result, the seller has already signed an exclusive agreement without really reading it. The documents are already at the agency. There are no rights to sell, only obligations and the contract can only be terminated with penalties or a scandal through the courts.
Therefore, a satisfied realtor, rejoicing at how cleverly he pulled off the job, will most likely continue to sell this apartment. He promises to sell and says he will find another buyer. His earnings are already guaranteed under an exclusive agreement. I just had to deceive the owner.
Conclusion
How can you trust such a person and such realtor work schemes? And this is a very common practice among intermediaries. You cannot sign exclusive contracts, even when you are told that a buyer has been found and a deal is about to happen. It's all a lie.
Disadvantages of an exclusive agreement
Let's go through the points of a real contract from a real estate agency on the provision of services on exclusive terms.
- You undertake to pay the commission in any case of sale of the apartment. Even if a neighbor or your friend buys it.
- You give the exclusive right to sell to one person and do not receive guarantees of the fact of sale . He may get sick or leave, then your apartment will not be sold at all. There are no penalties in the contract for the realtor in case of failure to comply with its terms. In other words, if your apartment is not sold in the end, the realtor will not bear any responsibility for this.
- Dependent on the intermediary and agency. You can't do anything yourself. Only sue and litigate if something goes wrong.
- They take the documents for safekeeping and store them directly at the agency. In the second case, you voluntarily submit for review upon any request. The bottom line is that you won’t have documents for your apartment.
- You undertake to pay the advertising costs of the performer, that is, the intermediary and the agency. This is absolutely arrogance. 2 thousand dollars, and also pay for advertising.
- Automatic extension for the same period in case of expiration of the contract. Notification must be given in writing no later than one month in advance. And in case of refusal of further cooperation - penalties.
- Pay a 5% commission to the intermediary within six months, even if you sell the apartment yourself and the contract has already ended. There is such a clause in one of the samples of the exclusive agreement that we studied.
Why enter into an exclusive agreement?
Usually such agreements are concluded due to inexperience.
People rarely deal with buying and selling real estate. The mediator talks well and praises his service. He says it's free for the seller. That the sale will go faster and only with an exclusive will success await.
They are trying to deceive you and, through manipulation, force you to sign an exclusive.
Here is a video advertisement in which realtors are asked to improve their skills in influencing property owners. But the most important thing at the beginning is that 98% of owners are not happy to see an intermediary in the sale of their real estate. Here we agree with them.
Reviews about the exclusive agreement
The owners say that they fell for persuasion and signed the contract because they did not know about the conditions. We did not imagine that there could be serious consequences. They did not know about the penalties and fees in case of termination. They didn’t think that they could deceive us and deprive us of our apartment.
You usually don't hear good reviews about an exclusive. Everyone is unhappy about something. Either by deadlines or by execution of the contract.
Sometimes people come to us asking us to help them pick up documents from the agency and terminate the exclusive contract. When a buyer is found, but the sale cannot be made, people begin to realize that they are in a difficult situation.
The reviews are negative due to the fact that no one understands what they should pay for if the service is not provided. But there are agency clients who, unknowingly, still fall into this trap. This article may help them. Post the link and let them read it.
The exclusive contract service is dubious and imposed. Intermediaries do not need to pay money. You can find a buyer directly and sell the apartment yourself. This way you will get more money and save your nerves. Dealing with incompetent realtors is very exhausting.
Types of exclusive agreements
Due to the fact that the documents are drawn up by different companies, everyone has their own vision of the clauses of the contract. In any case, this agreement is made in such a way as to spell out your responsibilities and penalties as much as possible, and to protect the realtor and protect him from possible problems.
It may be called a service agreement, a real estate services agreement, or an agency agreement. Each of them will most likely contain signs and conditions of exclusive contracts.
Related article: Everything about the agency agreement and real estate services
The intermediary and the real estate agency make contracts to suit their requirements and, based on their impudence, prescribe fines. The point is that you owe the realtor 5-6% of the sale, of course, always remains, but the conditions are different.
Therefore, always read carefully and do not sign anything without consulting your lawyer. And it’s better, of course, unless absolutely necessary, don’t sign any contracts with realtors at all.
