Playing “Gotcha?” Nope, Just Setting Expectations
It’s always a good idea for a Realtor and the Buyer they’re representing to have a signed Representation contract.
That’s true even if the Buyer and Realtor have known each other for years, and already done multiple deals together.
In fact, that’s especially true if the Buyer and Realtor have known each other for years, and already done multiple deals together.
What a Contract Does
As a former corporate attorney, I know that a good contract — and the standard, MN Buyer Rep contract is — makes everyone’s expectations explicit.
How long will the Realtor and Buyer be working together?
What happens if the Buyer wants to buy a home where the Seller is only offering a tiny pay-out? (the part of the commission offered to Buyers’ agents).
What if the Seller is a FSBO (“For Sale by Owner”), and isn’t offering to pay any commission?
And so on, and so on.
Timing is Everything
All these questions are easily addressed ahead of time (for example, I have a standard way of handling FSBO’s, which I explain to all my prospective clients).
However, if and when issues arise in the course of a relationship, when emotions are running high and the Realtor has already invested months (years?) of their time, they can be (much) harder to navigate.
So, in practice, when are Realtors most vigilant about having their clients sign a formal agreement?
Right after a client they were working with without the benefit of a signed contract burned them (unfortunately, even very experienced agents have this happen occasionally).
P.S.: And no, a written contract isn’t a panacea, and won’t prevent every conflict or problem.
Attorneys often say that if there’s good faith and a course of dealing between two parties, a one page contract is sufficient. If there isn’t . . . . a 100 page contract won’t help.
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