When you buy a home, and ask a realtor to represent you, you sign an agreement with your realtor. What if you want to get out of your contract? And can you get out of your contract with your realtor?
The short answer is yes, you can. However, it can be complicated. First a warning; never just walk away unless the buying agreement with your realtor was ended by date. If you walk away and purchase a home while the contract is still valid, you may be on the hook for the agreed commissions.
Reasons buyers want out of their real estate contract
Buyer’s agreements are mandatory since 2014
Why sign a buyer’s agreement with a realtor?
Ultimately, signing an agreement gives you the best protection and commitment from a realtor
A buying agreement lays out several things, of which 4 important ones are:
- The responsibilities from the realtor to you, the buyer.
- Your responsibilities toward the realtor.
- The commission you agree upon when you buy a home during this agreement.
- A beginning date and end date.
These fundamental points must be understood by the buyer. A good realtor will sit down with you to go over this agreement to explain it. Or, at least, as a buyer you must get the opportunity to read the agreement carefully and ask questions if there is something you don’t understand. Because once you sign it, there is an agreement in place between you and your realtor.
Realtors’ responsibilities written in service agreement
What are the responsibilities from the brokerage and the agent? The agreement you sign states something in the line of:
During this agreement we must:
- be impartial in our dealings with you and other sellers represented by us in whose property you are interested.
- make sure the designated agent that represents you meets our applicable policies and procedures.
- supervise the designated agent and support staff to make sure their responsibilities are met.
- hold money we receive in trust, in accordance with the Real Estate Ac.
- give you a copy of this agreement as soon as possible after signing.
- Follow through with our responsibilities in a timely manner.
- look for properties that match your search criteria, until you buy a property under this agreement, or this agreement ends.
- keep you informed during the search and any resulting transaction.
- tell the seller of a property you are interested in that they are your agent.
- take reasonable steps to find and give you information about properties and transactions you are interested in.
- help you prepare an offer and negotiate favourable terms and conditions with a seller.
- help you to comply with a contract to buy the property.
- present all offers and counter-offers to and from you, even when the property is already the subject of an accepted offer.
Ways to ‘get out’ of your buyer’s agreement with your realtor
Technically, as a buyer you can ‘fire’ your agent if your agent does not comply with any of these mentioned responsibilities in this agreement.
Discussing your concerns is usually the first best step
And, in all fairness, sometimes a good chat with your agent can clear up things. Sometimes there are misunderstandings that can be easily cleared up with one discussion. Buying a home is a complex process, and many things go on behind the scenes. If the agent doesn’t explain things clearly, or perhaps not at all, a buyer can feel that things are not right. Also, many communications these days go via WhatsApp, text messages and email. Here, things can easily be misunderstood.
If the realtor isn’t communicating well, or is not available in time for viewing homes, again, you will have to address these issues first. Also, if you feel, during the buying process, that your realtor doesn’t have the experience or knowledge you expected, you should discuss this first. It is understandable that expressing your concerns often sets a tone in your relationship that damages the relationship to both parties. And so be it, if you want out.
Ending the contract with your buying realtor
In regard to ending the agreement, the services agreement states something in the line of the following:
Despite the end date listed at the beginning of this agreement, the agreement ends immediately if any of these things happen:
- you complete a purchase of a property matching the search criteria.
- we and you agree in writing to an earlier end date.
- our license to trade in real estate is suspended or cancelled.
- we are bankrupt, insolvent, or we are in receivership.
- you give us written notice to end this agreement because our board membership status changes to the extent that we cannot fulfill our obligations under this agreement.
- you materially breach this agreement and we give you written notice to end it, or we materially breach this agreement and you give us written notice to end it.
If the agreement ends for any of these reasons, our rights and your rights under this agreement will not be affected.
As mentioned before, if the realtor breaches this agreement in any way, you still have to bring the issues up and discuss them first, and perhaps involve the broker, in order to get out.
Get your termination in writing
If both you and the realtor agree to end the relationship and end the agreement, make sure you have this termination in writing. There are special forms available that both parties need to sign. And if in doubt, seek legal counsel.
No buying agreement in place is a red flag
A realtor not letting you sign may be a red flag
Remember, it is mandatory as of July 2014 to have a buyer’s agreement in place. So, a realtor who doesn’t deem it necessary to have an agreement in place at the time it should be in place is not obeying the law. And secondly, because realtors work 100% on commission only, a realtor’s commitment can change to help you in your best interests. If there is no agreement in place, a buyer can just go out with any of the 5000+ agents. If that is the case, an agent will want you to buy a home as soon as possible. So, the part “working in the best interests of the buyer”, can easily shift to ”working in the best interests of the realtor”.
The law dictates that as soon as a client relationship is in place, there must be a buyers agreement in place
How we work…
Buyer agreements are made by RECA, who works for the consumer
We started working with buyer agreements quickly after we we started in real estate in 2009. We realized the value of these agreements for both parties. Because, as realtors, we must be available to our clients 7 days a week, making it important for us to dedicate our time wisely. Viewing homes can take weeks, months and sometimes even years. So, knowing that buyers commit to us makes it possible for us to commit to buyers, every single day of the week. Because who feels dedicated to working for someone if you don’t know if you get paid at the end of the day? Having an agreement in place makes us committed and able to work in the best interest of the buyer.
Added to that, we don’t ask for a retainer fee either. If buyers decide not to buy a home after ‘shopping’ for homes, there is no ‘debt’ for the buyer as owing to us. And if a buyer does buy a home, which is usually the case, this agreement makes sure that we get paid by the seller’s brokerage.
Please note: The above is general information and not considered legal advice. We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us or speak to your legal advisor.