Finally! You have saved up 3% down payment and gotten your credit score in the 700s. You have been cyberstalking a neighborhood. Visiting open houses and digging into public records. So, when that gorgeously remodeled house comes to market in ‘your’ neighborhood and within your budget, you are ready to make an offer! What is the first step when buying a home in Tallahassee, Florida? What’s the benefits to the buyer of signing a contract with a buyer’s agent? Let us answer these questions and more!
Before we dive into it though, we need to say a word about Florida law and how agents are paid. In Florida, sales agents, and broker associates ‘hang’ their license with a broker of record. That broker of record is the only one that can pay them for real estate services. The broker of record is also the one ultimately responsible for their agents who work for you – whether as listing or selling (buyer’s) agents. Most of the time Realtors are paid by the seller for bringing a buyer to the closing table. Those closing agents pay the broker(s) of record and the broker pays their agents a negotiated percentage. I have a broker’s license and am a broker associate at Ketcham Realty Group. My broker of record is Patti Ketcham and she’s pretty awesome!
#1 – What Is a Buyer’s Agent Agreement in Florida?
It can be annoying to meet an agent in his/her office when all you want to do is visit the house you hope to live in! Especially right now when it feels that house might fly off the market at any moment. Many agents in Tallahassee are not going to ask you to sign an agreement for them to work with you. We understand not wanting to sign one. Signing contracts can be scary.
What is scarier though, is not knowing what your agent is allowed to say to the other side to close the deal for you. Do you want the other side to know you are moving because you must and do not have any time to spare to find a home to live? Do you want the seller’s side to know that you can and will pay more for the home than you offered? Depending on the relationship (also called agency) the agent has with the seller, they may be required to tell them you can and will pay more. In fact, finding the home is only the start of the agent putting their value to work for you.
The buyer’s agent agreement puts in writing what your agent can and will do for you. It also tells you how you can fire him/her if they are not doing what they said they would. Most agents are considered transaction brokers under Florida law. We are required to deal fairly and honestly but owe limited confidentiality. If you want a different relationship (agency) schedule a time to discuss before the pressure is on to buy that house. This is also your first chance to see how they are going to negotiate for you in action.
#2 – How Do You Terminate the Buyer’s Agent Agreement?
Every contract has a cancellation clause that explains how to cancel the agreement. The buyers agreement sets the expectations and protects both the buyer and the agent. If the agent is not performing the duties that they agreed to, then usually a written email telling him/her that you no longer want to work with them is sufficient. What if you just don’t like him/her? You can still ask to terminate the agreement. If they do not agree, talk to their broker.
Since all agents in a brokerage answer to the broker of record, reach out to that broker and ask for a better fit. The broker’s contact information is included wherever the agent’s contact information is found The broker will be able to find an agent that better meets your needs and personality style. The broker would much rather find you a better fit than to see you go to a less reputable brokerage.
#3 – What is on the Buyer’s Agent Agreement in Florida?
The buyer’s and agent’s names are on the contract, along with the counties you are searching. Our part of Florida is much less populated, and it is not uncommon for agents to work several counties in our area. The next part of the contract covers the terms of the agreement. Those include how long the agreement will be in effect, termination fee, cancellation term, and an agreement to pay the Realtor if you purchase a house they shown you within 90 days, even if with another Realtor. These terms can all be negotiated to mutually agreeable conditions.
The next two paragraphs cover the responsibilities of the agent and the buyer(s). The next section is the compensation owed to the agent. It does state that the agent will seek compensation first from the listing broker, seller, or the builder before the buyer. Next section is special clauses, and this is where you add anything specific that you want your agent to do or not to do. Next two terms are the attorneys’ fees in case of a lawsuit (winner takes all) and the acknowledgement that one side cannot change the terms without the consent of the other side. Contact us if you would like a copy to review!
#4 – Do I Need a Buyer’s Agent in Florida?
No. But why would you not want someone to help guide you through the process and use their experience to protect you from the unknown? We meet many buyers at open houses. Some buyers are convinced that going straight to the listing agent is the only way to win competitive bids. Some listing agents cut their commission for the seller if they handle both sides of the transaction. In Florida, dual agency is illegal. In other words, an agent cannot act in both the buyers and the sellers best interests at the same time. If you approach the listing agent, even when they are acting as transaction brokers, who do you think they are going to be more loyal to if issues arise? Isn’t it human nature to be more loyal to those you already have a relationship with over the newcomer?
An excellent agent has hustle, knowledge, and integrity. They will do the right thing by you even if it costs them a commission. Experienced agents will know how to deal with the unexpected and how to find a solution. Thereby getting the house for you and saving their commission. Having a written buyer’s agent agreement in place will ensure that the agent puts that experience to work for you.
#5 – How Is Signing a Buyer’s Agent Agreement Good For Me?
The listing agent signs an agreement with the seller before they market the house. Just like a listing agreement, signing a buyer’s agent agreement protects both you and the agent. Remember, full time agents work for commissions alone. If the agent knows the buyer is committed to them, they are going to be committed too.
For the buyer, it is clarification on responsibilities and duties and protection from an agent sharing things that you do not want shared. It can be hard to find a reputable agent, especially if you are moving into Tallahassee from out of the area. If an agent does not clarify how they are representing you, how do you know they are acting in your best interests and not the sellers or their brokers?
#6 – What About Buying New Construction?
It may be even more important to have an agent represent you when purchasing new construction. Many of the listing agents in Tallahassee selling new homes are related to or working for the seller/builder. They are working to get the builder a bigger profit margin. This does not mean that they are not nice agents or super helpful. A buyer’s agent can educate you about the process and what to expect and what can or can’t be negotiated. This is another great reason to meet before looking at homes.
The only time in the past couple years that the buyers paid our commission was for a new construction. We had been working with a young couple to find a tiny home. They were going to spend approximately $80,000 and were looking for a quiet spot near downtown to be able to park their home. Fortunately, they contacted me early in the process. After talking to many Tallahassee officials, we concluded that anything with wheels was not going to be allowed within city limits. We found a parcel that was flat and cleared and perfect for their new home. By this time, COVID had driven the cost of new construction up considerably. When we had started looking prices were averaging between $150 and $180 a square foot. By the time we closed on the lot, prices were over $205 a square foot. We were able to negotiate with the builder and the buyers eventually signed a contract with the builder for $105 a square foot. Yep, that’s right. At 1100 square feet, we saved them well over $100,000 and they were very happy to pay the closing agent our commission.
Whether building a new home, or buying a resale, there’s lots of information you will want to consider. It can be overwhelming. So, if you are considering buying a Tallahassee home, we would love to hear from you!
Contact us for a no obligation free copy of the buyers agreement form!
Check out our webpage form more tips and information on buying a home in Tallahassee: https://livingintallahassee.com/home-buyers.html