These agreements are much more a matter of negotiation than custom. You and the agent must set a reasonable time limit that takes into consideration the relative difficulty of finding a property that is right for you. If you want a one-story ranch-style house with three bedrooms and two bathrooms in a good school district, selling for the average selling price in that area, I would think that a twomonth contract would be plenty of time. Finding a mansion in perfect condition for 25% of the appraised value might take a little longer.
There are several types of agency agreements, usually with differences about the degree of exclusivity.
The Exclusive Right to Sell Agency Agreement means the agent earns a full commission no matter who sells the property. Even if the agent has done absolutely nothing and you sell the property to your mother, you will be obligated to pay the commission.
The Exclusive Right to List Agency Agreement means the agent is the only agent entitled to list the property and find buyers through marketing efforts. If you find a buyer without any assistance from the agent, you do not pay a commission. Disputes arise over questions regarding whose efforts turned up the buyer. Did your coworker learn about the property from you or from the half-page ad the agent placed in the Sunday paper?
An Open Listing is really an offer you make to all real estate agents. You offer to pay them a certain commission if they bring you a buyer and you sell to that person. The commission is generally a little bit higher than the split they would receive with a typical listing agreement. Any agent can accept your offer simply by bringing you such a buyer.
An Exclusive Buyer's Agency Agreement obligates you to pay your agent a commission even if you find property through your own efforts and then buy it. The thinking is that the agent has educated you immensely through the process of searching for properties. He or she should not do that for free.
A Non-Exclusive Buyer's Agency Agreement prevents you from working with other real estate agents to purchase property. If you find something on your own, though, you do not pay a commission.
Of course you can! Be aware, however, that real estate agents are part of a fairly close community. Many of them will tell each other non-confidential information they would never share with you as an outsider. You might have to work a little harder by yourself, but at least you can be sure you will not become discouraged and give up. Often, if a real estate agent cannot obtain quick results for someone, he or she moves on to other clients and customers.
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1. Real estate Investments
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