Home » Purchase and sale of an apartment » Agreement with a realtor for the purchase of an apartment
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Despite the abundance of offers for the purchase and sale of real estate on various platforms, the procedure for purchasing a new apartment is often greatly delayed due to the fact that there is simply no suitable housing. The problem can be solved by real estate agencies that have their own database, in which, as practice proves, there are significantly more housing options than in open sources.
Do I need an agreement with a realtor?
Any real estate agency will work with a client only after concluding an appropriate agreement. The same can be said about normal private realtors. Thus, a service agreement (may be called differently) is a mandatory document.
Moreover, if a realtor or agency offers to cooperate without concluding an agreement, this is a bad sign. Most likely, these are scammers who actually have no intention of doing anything. They will take an advance from the client for the service and, at best, will imitate vigorous activity. At worst, they will stop responding to calls altogether.
Please note that the services of an agency or realtor are paid. On average, this will cost the client approximately 5% of the cost of housing. At the same time, you need to take into account the specifics of a realtor’s work. A significant part of them take money not from the buyer, but from the seller, since it is he who is the recipient of a substantial amount and is more likely than the buyer to agree to pay for the company’s services.
Reasons for refusal to cooperate
Agreements for the provision of real estate services always stipulate the procedure for terminating the contract at the initiative of the parties.
The customer has the right to refuse the realtor at any time if he believes that the terms of the contract are not being met. As mentioned above, in this case you only need to reimburse the contractor for the expenses incurred.
A realtor may also refuse to cooperate if it turns out that the client has provided invalid documents, is not the owner of the apartment, or avoids showing and communicating with buyers. In case of refusal of the realtor's services, the deposit will not be returned .
Mandatory clauses of the contract
An agreement with a realtor for the purchase of an apartment is a fairly simple and standard document that is not particularly difficult to draw up. Moreover, often a real estate agency or private realtor already has a prepared contract form. That is, the client does not need to do anything other than sign the document.
It is very important to carefully study the contract and, if you are not satisfied with any clauses, insist on their removal or modification. If a company or person refuses to remove controversial items, then this should raise suspicions.
Let's consider all the main points of the contract in more detail.
Information about the parties to the transaction
This is a basic section that is always placed at the very beginning of the contract. It describes who exactly is the customer of the service (customer’s passport data, full name, registration address, etc.), as well as who will provide the service. Typically, if an agreement is concluded between an individual and a legal entity, a representative acting on such and such a basis is indicated from the legal entity. Agency data and information about the representative are also entered.
Description of the apartment you plan to buy
This section usually follows immediately after information about the parties to the transaction. This describes the property that you plan to purchase. The accuracy of the description is entirely up to the client. It can either be said that a two-room apartment is needed in a certain area of the city, or a fairly detailed description of the required layout, repairs and other parameters important to the buyer.
In the case of selling an apartment, everything is much simpler; this section simply describes the existing housing that is planned to be sold: address, area, number of floors, number of rooms, and so on.
Responsibilities and rights of the parties
This often lists the responsibilities that a realtor or real estate agency must perform:
- Finding a suitable apartment.
- Organization of viewing of housing.
- Participation in negotiations on the purchase of an apartment.
- Checking the parties to the transaction, documentation, and so on.
Since there are no strict requirements for the work of realtors in the law, bad agencies or realtors usually stop at searching for an apartment. The client must do everything else himself. Regular companies or experienced realtors often offer a complete list of all services.
The agency does not always have its own lawyer, so the verification of the parties and documents can be carried out very superficially. To reduce the likelihood of serious problems arising in the future, it is recommended to additionally seek help from experienced lawyers who will already check everything possible.
Deadlines for fulfillment of obligations
A very important point, the absence of which should be alarming. The agency or realtor is required to indicate how long they plan to find housing. As a rule, this part of the contract is associated with both termination of the contract and liability for failure to fulfill obligations.
Example: A realtor indicates in the contract that he will look for an apartment for the client within 1 month. If nothing suitable is found within this period, the realtor returns the previously received advance and terminates the contract by agreement of the parties (or unilaterally).
Prices for services
This clause is not always included directly in the contract. It may also be that the contract only contains a reference to the company/realtor’s tariffs. In such a situation, it is necessary to request that printed tariffs be attached to the contract as a mandatory addition and to make a reference to this supplement, and not all the company’s tariffs in principle.
This must be done to ensure that the cost of the company’s services does not change during the process of servicing the client.
Example: A person entered into an agreement with a real estate agency, which indicated that payment for services is made according to the company’s tariffs, which can be viewed on such and such a website. During the service process, the company can easily change the information on the website and thereby significantly increase the client’s costs. Moreover, all this will be done strictly according to the contract and it will not even be possible to challenge anything.
Conditions for termination of the contract
Another important point. Both parties should be able to terminate the contract under certain conditions. Usually only a reference to the deadlines for fulfilling obligations is indicated, but there may be other options. For example:
- The realtor has the right to terminate the contract unilaterally if the client does not make the advance payment within the specified period.
- The client has the right to terminate the contract unilaterally if the realtor does not fulfill his obligations (does not offer apartment options, refuses to check the seller’s documents, and so on).
Responsibility for failure to fulfill obligations
This point does not always happen, but it is also very important. It indicates what responsibility one or the other party to the transaction bears for failure to fulfill its obligations.
Example: A real estate agency undertakes to provide a client with a choice of 3 apartments every week. If they do not do this, they are obliged to return the advance payment received to the client and additionally pay a fine of 50% of the advance amount.
In fact, liability often begins and ends with the termination of the contract and the return of the advance payment. The agency is not interested in additional penalties.
Useful video
We invite you to watch a video about what you should pay attention to when concluding a contract for real estate services:
The following articles about the purchase and sale agreement may be useful:
- Is it possible to restore the purchase and sale agreement for an apartment, where and how to do it?
- How to correctly draw up a preliminary agreement for the purchase and sale of an apartment?
- Nuances for a communal apartment and dormitory: how to properly draw up a contract for the sale and purchase of a room?
- Nuances of the procedure for registering a purchase and sale agreement.
- Secrets of drawing up a contract for the sale and purchase of a share in an apartment.
- What is a transfer and acceptance certificate under a purchase and sale agreement and how to draw it up?
- How to draw up and conclude a contract for the sale and purchase of an apartment?
- What is an additional agreement to the apartment purchase and sale agreement?
Pitfalls in the contract
Realtors who are not particularly honest and responsible may include various clauses in the contract, which will ultimately lead to the client paying significantly more than planned and receiving disproportionately more. Let's look at the most important points:
- Contract time . It must be indicated. If it’s not there, the realtor can simply take the money and do nothing; anyway, he doesn’t have any time limits.
- Small font . A normal company will not draw up a contract in different fonts. If something is written small, this should already be alarming. In any case, it is these clauses of the contract that need to be given special attention.
- Communication with the other party . Some companies expressly prohibit the parties to a transaction from communicating with each other until final settlement and transfer of ownership. This is not a legal requirement, although it is understandable. If the parties find a common language, they can simply exclude the intermediary company from this chain, thereby reducing their own costs.
- Exclusive rights to service . Many companies or realtors prohibit the client from contacting other agencies and looking for apartments on their own. This is also not particularly legal, but in some cases it is allowed. However, such a limitation must necessarily go hand in hand with very interesting and favorable terms of service.
Example : In a normal situation, the client must pay the company 5% of the cost of housing. In the case of exclusive service, the commission is reduced to 2%. If we assume that the apartment costs 4 million rubles, then in the first case a person will pay 200 thousand rubles, and in the second 80 thousand rubles. The savings, if you agree to exclusive service, will be 120 thousand rubles, which is very significant.
An agreement with a realtor can be problematic in itself, not to mention the purchase and sale transaction. It is recommended to contact experienced lawyers who can accompany the transaction throughout its entire duration, from concluding agreements with a realtor to registering ownership rights. At a free consultation, specialists will talk about the main controversial issues that need to be taken into account, and they will defend the client’s interests in further cooperation.
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Author of the article
Natalya Fomicheva
Website expert lawyer. 10 years of experience. Inheritance matters. Family disputes. Housing and land law.
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Why do you need to enter into an agreement?
It is mandatory to draw up an agency agreement for the purchase or sale of housing with a realtor . Otherwise, there is a risk of wasting time and money. The agreement specifies in detail the entire range of services that must be provided in exchange for commissions or a fixed payment, as well as liability for failure to perform them.
Realtor services include:
- free apartment assessment;
- marketing plan for promoting the sale announcement;
- searching for a buyer and conducting inspections;
- negotiations with clients and advertising the apartment to them;
- checking all documents and preparing for the purchase and sale transaction.
A real estate agency often deals not only with the banal information of a buyer and a seller, but also provides preparation for the sale of an apartment, collects certificates necessary for the transaction, as well as a legal examination of title documents.
The Guild of Realtors has developed a standard agency agreement, which has undergone legal examination and contains all the important points that describe the relationship between the customer and the contractor. It is advisable to familiarize yourself with it before signing the contract offered by the realtor.
