Question – I am not getting along with my real estate salesperson and don’t think they’re going to lead me to a home I want and I would like to get out of my contract. Can I do that?
Answer:
It is unfortunate you are not getting along with your sales representative. Because your agreement is really with the brokerage and not the individual salesperson, as a first step, I would encourage you to speak with the salesperson’s Broker of Record about your concerns and discuss what can be done to address them, before you get into trying to cancel the agreement. The Broker of Record is the person who represents the brokerage.
However, it is important for you to know that the contract you are talking about is a buyer representation agreement (BRA) and it is a legal contract that contains rights and responsibilities for both parties. Your salesperson is required by law to put the agreement in writing and to get it signed by you, the client.
A BRA defines the relationship between the buyer (you) and the real estate brokerage (not the individual salesperson) that is working on your behalf. It sets out the property type and geographic location for your potential new home, lists the services to be provided to you, addresses the issue of commission that may be payable to the brokerage, and specifies the length of the agreement.
Once you sign a buyer representation agreement, you and the brokerage are legally bound by its terms. This applies to seller representation (listing) agreements as well.
Sometimes, when the client and the brokerage agree, representation agreements can include a clause that permits the client to end the contract early.
This clause would typically be found in the section of the agreement called “provision for schedules.” You should check to see if such a clause was included in your agreement.
If you and the brokerage agree to an early end to the agreement, you typically have to enter into a further agreement with the brokerage called a release. You may wish to seek legal advice about how a release works and how it can protect you and the brokerage.
However, please remember that your real estate agent can ask for a “non-refundable deposit” if you include a clause for “early end to the agreement”. If you buy a property through your buyer’s agent during the BRA agreement period, your agent will earn a commission, and he or she may be wiling to return your “non-refundable deposit” paid earlier to his or her broker.
If no such clause exists in your agreement, you have the option of discussing the terms of the agreement with the Broker of Record. If you are unable to agree to an early termination, you would be well advised to consult a real estate lawyer for advice, particularly about any financial implications for you.
Your situation is a good reminder of the need to be fully informed of your options before you sign any agreement and to be thorough in your assessment of the brokerage and salesperson you are considering.
You should always thoroughly review your agreement with your sales representative, section by section, clause by clause, and make sure you include the provisions that you want.
Please remember that the “Buyer Representation Agreement” is a fairly standard contract provided to your agent by their Association. Your Buyer’s agent is not a lawyer and he or she can be unwilling to negotiate and add more clauses to the contract. The agents are under “time pressure” to perform and achieve sales and earn their commissions. And just like you, he or she can walk away too. What you need to have is to establish a good understanding with your agent.
Technically, if you don’t understand something in the buyer or seller agreement, the salesperson should be able to explain it to you. If you still don’t understand something, you could ask to speak to the Broker of Record or seek advice from a real estate lawyer. Even after all that your Buyer’s agent can walk away.
Ultimately, you need to be comfortable with the contract you are signing. The provisions in the agreement need to suit your needs, and if they don’t, you should not sign on the dotted line. Similarly, if your Buyer’s agent does not agree, he or she can walk away.
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