Should I fire my realtor? How do I do that?

[somebody8198]

I've been looking for buying my first home in a really terrible (for buyers) real estate market. I got close to closing on a house this past fall, but discovered some major foundation and plumbing problems that scared me off. I then decided to take several months off due to stress. It's a highly competitive market and the process of making that offer was crazy and I needed to focus on work for a while.

Since the new year I have resumed looking at houses. I have the sense my realtor got really frustrated with me for not buying that house, and is continuing to "take it out" on me during our recent interactions by not being responsive or following through on appointments. For example, she is going to be out of town for a few weeks, but promised she would set me up with one of her colleagues before she left. She forgot, or intentionally blew me off. I've also got this sense from some language she's used when addressing my concerns about properties we have looked at, such as "victim mentality", which I don't think is appropriate when discussing the very real risk of buying a $500k piece of real estate.

Also important note: this real estate agent is a friend of a friend, actually an S.O., so I can't just tell her off or be rude.

a) Am I crazy for thinking this?
b) Is it worth bringing this up with her to give her a chance to apologize and "do better"?
c) If I do decide to end the relationship, how can I do that legally and professionally?

I've never bought a house before so I don't know how normal any of this is. Thanks in advance!

[Dicey]

You have zero obligation to this person. She may be as tired of you as you are of her. In the olden days, that was the beauty of Open Houses. Now you'll have to do most of your legwork via the internet, for which you do not need a realtor.

As an experienced buyer and seller of RE, there are very few markets that look good right now. I have lived through plenty of roller coasters and it feels like we're at the top of one now. I'd just tell her you want to save up more money before you buy and let it go. I suspect she will be happy to comply.

[BlueHouse]

You may have a legal obligation.  Did you sign a contract for a buyer's agent?  If so, you'll have to address this head-on if the time limit hasn't expired.  I would just tell her that you want to take things in a different direction and that you appreciate her help up to this point. 
She'll be just as embarrassed as you are due to the personal relationship that she'll just thank you and wish you well.  Just make sure that if there was an agent agreement, that you get that cancelled/ended. 

[ctuser1]

I was a first time homebuyer in 2016. I purchased this house I live in now, for several tens of thousands below the listing price.

Yes, you should fire your buyer's agent! For house hunting, it is almost always better to not have a buyer's agent.

The "How" would depend on whether you signed an "exclusive buyer's agency" agreement or not, like explained above by BlueHouse. Did you? If so, find it. Does it expire soon? If not, does it have an escape clause for you?

Generally, if you signed a binding contract, then you are bound by it. If it becomes clear that you won't work with the buyer's agent, however, there is no financial incentive for the broker to keep you bound to that agreement. So - maybe, give him some excuse why you can't buy right now at this location that he serves and ask him to let you out of the agreement! Or, you may need to wait out the term of that agreement.

Once you get out of the exclusive agreement, please don't hire a buyer's agent for purchasing hour first house. It is much better to not have one.

All the listings are available on public websites (Zillow/realtor.com/others). You don't need an agent to find them. Once you narrow down the houses you would like from the public info, you should create a ranked list of them and work one by one. Call the top one's seller's agent. Mention to the agent that you are unrepresented. This means double payday for the "seller's agent", so he'll likely work extra hard with you. See if the negotiation works out, if not move down to the next house on the list and repeat.

To make an actual offer, at least in my state, you need to sign a "buyer's agency" agreement. You can't actually do this if you have the "exclusive buyer's agency" agreement from above. Assuming that is a non-issue when you are doing this, ask for a non-exclusive agreement from the seller's agent if he has one. If not, put down the exact address of the house in the "location" field and make sure that the "exclusive" agreement only pertains to this specific house for a reasonable period of time (maybe 6 weeks - enough to close on a deal).

Beware of the fact that when you reach to the seller's agents from the public listings in Zillo/redfin/realtor.com, the seller's agents will try really hard to convince you to hire them as your buyer's agent. I was a first time buyer in 2016 and fell for it once at that time. It was extremely frustrating! A single layer negotiation (seller -> agent -> buyer) is, IMO, useful. You don't want to deal directly with the sellers who are emotionally invested in the house. For the few houses when I tried to engage in a two layer negotiation (seller -> seller's agent -> buyer's agent -> buyer), it was extremely frustrating.

As a first-time homebuyer you may seek the "comfort" of having a buyer's agent. After all, everyone does it and they even promise to work for you. But, in my experience, that "comfort" is a very expensive mirage. You are less likely to have your offer accepted when you have a buyer's agent (i.e. the seller's agent has to split the commission and hence will prioritize the "unrepresented" buyers from who he/she will get double the payday). When your offer is accepted, you will have less leverage to negotiate, and will likely pay a lot more $$ in the end due to this.

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Another useful thing I did was with the pre-approval letter. First time I asked for one, my credit union (DCU, in my case) sent me one with some ridiculous $1M+ number pre-approved for mortgage. I called them back and told them I plan to "lowball" on the houses and don't want any agent or seller to know how much I can borrow. To this, a nice lady in the mortgage department gave me her email address. I would email her every time I need to write a "lowball" offer, and she would email be back a "pre-approval" with the exact number "pre-approved". I wrote 5 offers, and she sent me a different pre-approval letter for each one.

In the end, I purchased an almost-fixer-upper house for what most people in this HCOL location consider a crazy low number (<$300k). I moved into it and working on gradually fixing it up (partially chronicled in this thread: https://forum.mrmoneymustache.com/real-estate-and-landlording/my-house-needs-some-work-how-would-you-prioritize-differently)
 

[BlueHouse]

Just want to add one more thing about "exclusive buyer's agreement".  They just aren't necessary.  They weren't even invented until about 1995 (around the time I bought my first home).  They were new, so there were many written opinions in the Real Estate section of the newspaper. There is absolutely no benefit to the buyer to having an exclusive arrangement that protects only the realtor.  You can get anyone to represent you to help you buy a house and they'll still be paid.
The first time an agent tried to get me to sign one, I just said "no, I don't sign those" and she came back with "we're actually required now by [broker name] to get a signed agreement".  I said "oh, that's too bad" and suddenly she found a way.   

[ctuser1]

Just want to add one more thing about "exclusive buyer's agreement".  They just aren't necessary.  They weren't even invented until about 1995 (around the time I bought my first home).  They were new, so there were many written opinions in the Real Estate section of the newspaper. There is absolutely no benefit to the buyer to having an exclusive arrangement that protects only the realtor.  You can get anyone to represent you to help you buy a house and they'll still be paid.
The first time an agent tried to get me to sign one, I just said "no, I don't sign those" and she came back with "we're actually required now by [broker name] to get a signed agreement".  I said "oh, that's too bad" and suddenly she found a way.

+1.

I fell for the "exclusive" agreement once, the first time around, in 2016. After much frustration with that agent for 3 months, I wouldn't sign one again.

Last time an agent wanted me to sign an "exclusive" agreement, I told her "Ok, I'll sign as long as you make it exclusive both ways. I can't get another agent, and you can't get another client till this agreement runs out. I don't like signing away my rights unilaterally.". That shut the agent up. :-) She did not want to be "exclusive", she just wanted us to give up our ability to shop around.

When I needed to be "represented" by the seller's agent when submitting offers at that time, I would liberally cross out weird portions of the agreement, and sign with the exact house address as "location" etc.

[ender]

Just want to add one more thing about "exclusive buyer's agreement".  They just aren't necessary.  They weren't even invented until about 1995 (around the time I bought my first home).  They were new, so there were many written opinions in the Real Estate section of the newspaper. There is absolutely no benefit to the buyer to having an exclusive arrangement that protects only the realtor.  You can get anyone to represent you to help you buy a house and they'll still be paid.
The first time an agent tried to get me to sign one, I just said "no, I don't sign those" and she came back with "we're actually required now by [broker name] to get a signed agreement".  I said "oh, that's too bad" and suddenly she found a way.

I suspect there's huge overlap with "good realtors" and not requiring an exclusive agreement.

When we recently bought a house, I interviewed four different realtors before choosing a buying agent (5, if you count redfin I guess). The one we ultimately went with was phenomenal. I literally never had a response time more than 1 hour, at any point in the process. He was the only one who didn't require an exclusivity agreement unless he actually made an offer. Which to me was reasonable.

Did I get lucky? Or did I just correctly pick a realtor? Probably a little of both. But you can at least minimize some of the risk by interviewing multiple realtors.

Given how much money you end up paying indirectly for a buying agent you dang well better get a lot of value out of them. Personally, as someone new to the area, having an awesome buying agent was super valuable. But that's because our realtor was super valuable. Had they been average or even slightly above average it wouldn't have been worth it.

There's literally no reason to commit to a realtor who is anything other than near perfect in 2020.  Spend some time interviewing them. I had a long list of questions I asked all the realtors.

[Linea_Norway]

We once fired our realtor. That was a selling realtor and we thought he was doing a really bad job. Like the text in the brochure that we had to correct almost 100% and was written in a technical review style. He was also speaking negatively about our house to us. What would he do to potential buyers behind our back? We had lots of viewers, but no one made an offer. We both slept badly because of this man. So we checked our contract. He would be receiving 2% of the home sale. But without a home sale, we only had to pay approx 1300 USD. We thought that was worth paying for firing him. This sum included the photos and community information which we could reuse. It turned out he didn't take paid for his part of the job, as we were so unsatisfied.

[Omy]

Definitely fire your realtor. Saying something like "This just doesn't seem to be a good time for buyers" is an easy way out. Or "I'm not sure this is a good fit" if you want to be more direct (since your realtor friend will likely figure it out when you buy a home).

My question is "Why now?" If your market area is a crazy sellers market, do you actually need to purchase? Or could you rent for awhile until this bubble bursts and buyers are once again in the driver's seat?

If you must purchase now, a strong buyer's agent can be a huge asset to you. And a mediocre agent who doesn't respond quickly will end up costing you time and money.

[ctuser1]

If you must purchase now, a strong buyer's agent can be a huge asset to you.

I ask out of genuine curiosity - what value can even a really strong buyer's agent add that you can't get from Zillow and Realtor.com?

The downside to engaging a buyer's agent seems obvious to me. You add an extra layer in the negotiations, AND you split the commission among two agents and hence lose out against the buyers who don't.

The buyer's agent can likely bring local knowledge to you in the initial search process. But even then, can you really take their advice at face value when there is so much conflict of interest? The agent needs a quick sale, preferably for the highest $$ possible, to earn their commission for the least amount of effort possible, so that he/she can move to the next mark. Why would you engage anyone with that type of an incentive structure?

Perhaps my perception is negatively colored by negative personal experiences! Hence I am genuinely curious what value mustachians find from a buyer's agent despite the problematic incentive structure.
 

[BlueHouse]

<<snip>>

If you must purchase now, a strong buyer's agent can be a huge asset to you. And a mediocre agent who doesn't respond quickly will end up costing you time and money.

This can be true, I just want to point out again, that you don't need an *exclusive* agreement to work with a buyer's agent. 

Do NOT sign an exclusive agreement . 

[Smokystache]

This is genuinely interesting because I've always read sources that strongly suggested having a buyer's agent. The discussion about exclusivity agreements for buyers agents has helped me see them in a very different light. It does seem that they only benefit the agent and not me.

Having said that, I've had the same agent buy House #1, and then sell house #1 and buy house #2. She was born & raised in the community, would actually go to the city/county government meetings to keep up on zoning issues and what subdivisions were likely/not to be the next one to be annexed from county to a city (and thus changing school systems and doubling the taxes). What really stood out is that my SO and I loved the first house we toured with her. She said, "This is a great house and it seems like a good fit for your needs. But, (and this was said with a smile) I will not let you put in an offer until we've looked at a few more houses." We ended up buying that house, but I interpreted her actions as wanting us to not have any comparisons and she didn't want to just get a quick sale. In fact, she was very upfront in saying, "My goal is to help you eventually sell this house and buy the next one".

She could walk into a house in a community of 40,000 and could tell by the neighborhood and the style which builder built the house and if they were any good. And she also told us to get our own Radon testing done even after a seller told us they had done it already. ... and it came back with 3x the EPA levels of Radon. I would have put my children's play area and my guest bedroom in that finished basement. I'm guessing I got lucky and that not every Realtor is like mine. But it has been helpful to think about the buyers exclusivity contract and I appreciate the other POV.

[Sandi_k]

If you must purchase now, a strong buyer's agent can be a huge asset to you.

I ask out of genuine curiosity - what value can even a really strong buyer's agent add that you can't get from Zillow and Realtor.com?

As someone who once bought a house using the seller's realtor as ours, I must advise that this is a BAD IDEA.

It's called dual agency, and it creates a conflict of interest. If the realtor knows what you are approved for, they can tell the seller info you don't want to share, such as top price for pre-approval.

In our case, we had gotten a great deal, because we made a full-priced offer (they had under-priced it). The owner, once he realized he'd under-priced it, told the realtor to get him out of our contract. So she didn't show up for inspections, refused to fix things the lender required (like outlet covers!), and just generally made it miserable.

In other instances, remember that the selling agent only gets paid if the house is sold. So they will recommend inspectors with whom they have a longstanding relationship, and it is to BOTH their advantages to not do a thorough inspection. Because a decent inspection means you buy the house, and it means that the realtor gets a commission, and the inspector gets future jobs from that realtor.

So, to your question as to what a good buyers agent can do? They can provide local knowledge, if you're moving to a new area. They can advise as to local customs on closing costs: who normally pays which part? They can connect you with inspectors that are good. They can advise as to appraisers who know the area. Once moving, they can pick up and drop off keys for vendors, like cable and painters.

[ctuser1]

If you must purchase now, a strong buyer's agent can be a huge asset to you.

I ask out of genuine curiosity - what value can even a really strong buyer's agent add that you can't get from Zillow and Realtor.com?

As someone who once bought a house using the seller's realtor as ours, I must advise that this is a BAD IDEA.

It's called dual agency, and it creates a conflict of interest. If the realtor knows what you are approved for, they can tell the seller info you don't want to share, such as top price for pre-approval.

This is a valid problem. To take care of this concern, you could try to do the "per offer preapproval letter" trick the I explained above. But I don't think I was successful in my attempt to hide my buying power. The "Seller's agent" sent me a linkedin request a few days later. This means he read my profile and would have a pretty good guess that I am not looking in the < $500k fixer upper market due to lack of purchasing power. The conversations after this were sometimes a little awkward where we both danced around certain topics, but I stuck to my offer price and justified it by saying "This house is already more expensive, at my offer price, to buy than it would be to rent".

A slightly different kind of conflict of interest also exists with buyer's agent (he/she wants a quick sale, for the maximum money possible). When he/she wants the house to sell for the max price, there is nothing preventing him from passing that info back and forth with the seller's agent.

On the other hand, in my "dual agency" case the agent was super motivated to make sure this sale went through. In the end, I negotiated a $7k seller's credit towards the closing costs (the house was almost a "fixer upper", so there were many reasons) out of which the agent accommodated $3.5k by adjusting his own commission.

So, perhaps the "conflict of interest" favored me and steamrolled the seller in that case.

In our case, we had gotten a great deal, because we made a full-priced offer (they had under-priced it). The owner, once he realized he'd under-priced it, told the realtor to get him out of our contract. So she didn't show up for inspections, refused to fix things the lender required (like outlet covers!), and just generally made it miserable.

That agent was acting against her own interest. She would get higher commission the higher the sales price is. So this part appears surprising to me.

In other instances, remember that the selling agent only gets paid if the house is sold. So they will recommend inspectors with whom they have a longstanding relationship, and it is to BOTH their advantages to not do a thorough inspection. Because a decent inspection means you buy the house, and it means that the realtor gets a commission, and the inspector gets future jobs from that realtor.

You are assuming same issue does not exist with a buyer's agent. Why? My experience is otherwise, that the collusion among local people in the housing-adjacent trades is a real thing whether it is a buyer's agent or seller's. I have real stories involving a septic tank with two big honking trees growing in the leeching field (a code violation).

So, to your question as to what a good buyers agent can do? They can provide local knowledge, if you're moving to a new area. They can advise as to local customs on closing costs: who normally pays which part? They can connect you with inspectors that are good. They can advise as to appraisers who know the area. Once moving, they can pick up and drop off keys for vendors, like cable and painters.

I'll agree with the rest of this part, except the bolded one. I've had bad experience hiring an inspector suggested by my buyer's agent. It is possible that was because my agent was a poor one. I just suspect that the incentive structure would affect the behavior of all agents, some more and some less.

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I think the disconnect may be the fact that I have only dealt with realtors in areas that are considered suburbs of NYC. NYC real-estate cabal is known for their  dishonesty. I think that used car salesmen have a better reputation than realtors in the NYC metropolitan area.

Perhaps you live elsewhere and the culture is different, causing a different take on how useful the realtors really are.

[BlueHouse]

If you must purchase now, a strong buyer's agent can be a huge asset to you.

I ask out of genuine curiosity - what value can even a really strong buyer's agent add that you can't get from Zillow and Realtor.com?

I still strongly advise against an exclusive agreement with a buyer's agent. 
And I agree that when it comes to picking a house, zillow and others do more in helping me select what I'm looking for.  But when it comes to picking a location, I cannot beat the knowledge that a good agent has. 

I live in DC.  Eventually I'll move out and may move into surrounding suburbs.  I know nothing about these other areas except what I've seen in visiting others.  I will probably have asks like:  lower costs, no HOA, fenced yard, and maybe some other requests that aren't filter-able on zillow.  Realtors do know this stuff.  And it's also helpful to have someone else drive you around so you can look out the window. 

I just happen to think that realtors are like others in the service industries.  Do a good job and you get my business.  But I'm not signing a contract before I know whether or not you satisfy my wishes. 

[lampstache]

Many brokerages will require their agents to have a signed exclusivity agreement so I'm not surprised you get this a lot. This also helps the agent from having other agents poach their clients. I'd say it's more protection for the agent you're working with vs it being there to screw over a client even if it may feel that way to some people.

As a buyer I would not recommend you work with the seller's agent. This is because the agents fiduciary duty is to the seller first and buyer second in a situation where the agent is representing both parties. I would argue you are at a disadvantage from that standpoint. If it's not working with you current realtor write to them letting them know you are terminating the agreement between the two of you. If you terminate the agreement and end up going back to a home that you previously saw with your first agent they may be subject to compensation.

[Cb1234567]

I've been looking for buying my first home in a really terrible (for buyers) real estate market. I got close to closing on a house this past fall, but discovered some major foundation and plumbing problems that scared me off. I then decided to take several months off due to stress. It's a highly competitive market and the process of making that offer was crazy and I needed to focus on work for a while.

Since the new year I have resumed looking at houses. I have the sense my realtor got really frustrated with me for not buying that house, and is continuing to "take it out" on me during our recent interactions by not being responsive or following through on appointments. For example, she is going to be out of town for a few weeks, but promised she would set me up with one of her colleagues before she left. She forgot, or intentionally blew me off. I've also got this sense from some language she's used when addressing my concerns about properties we have looked at, such as "victim mentality", which I don't think is appropriate when discussing the very real risk of buying a $500k piece of real estate.

Also important note: this real estate agent is a friend of a friend, actually an S.O., so I can't just tell her off or be rude.

a) Am I crazy for thinking this?
b) Is it worth bringing this up with her to give her a chance to apologize and "do better"?
c) If I do decide to end the relationship, how can I do that legally and professionally?

I've never bought a house before so I don't know how normal any of this is. Thanks in advance!

a) no, you are not crazy.

b) look, don’t bother trying to explain yourself or be friends and “nice”. There is no “do better”. It does take more patience to work with first time buyers who don’t know the ropes and who may look a long time...because they don’t know what they want yet. Some agents love it, some don’t. Some teach you, some advise, some hold your hand and sing kumbaya when you freak out, some push. Find one that works for YOU.

If it’s this bad now, how do you think it will go when xyz turns up at the 11th hour and the pressure is on? (Or maybe it already did?) Just end it. Your agent must respect you, so don’t bother trying to “fix” the relationship, and certainly don’t expect the agent to bother. There are only about a bazillion realtors. Find another one. This time, work with a good one (check reviews, interview them, don’t whine, but do share your experience and see how they respond). DO NOT use a friend or family member.

c)  see below for how to end the relationship. You need to put it in writing.

1. Fire your agent. Keep the email short and polite. This is business.
A) If you have not signed any agreement with her, just send an email saying thanks and you are not looking for houses anymore. If she contacts you, ignore it, or repeat your first email (no phone call, NO TEXT WARS).
B) If you DID sign an agreement, then send the same email and say you want to terminate the agreement, AND to please send the signed contract to cancel agency ASAP. The broker will need to sign it, the agent, and then you. This is a specific form. If the agent balks, email the broker directly.

2. As others said, do not sign anything until you make an offer. Just say NO to buyers agency except for the one offer (write the actual address - not the county, town, the whole year of 2021, etc.). Good agents won’t care. They know the drill: sell houses = get paid. They will have a lot of activity.

3. If you’re not up for a house with major issues (foundation ad septic qualify), so be it. Make this clear as you look at homes next time.

BTW, if you don’t already know, you can go into Zillow and look up realtors in your area. Read reviews. Look for someone that has buying and selling in your price range, maybe 10 a month if it’s a busy area. Check realtor.com and google for reviews also.