The legal nature of real estate contracts and the realtor’s liability under them

The most difficult part of being a realtor is dealing with client objections. Real estate agents often ask the question: “How to conclude an exclusive agreement with a realtor?” Of course, it is necessary to “persuad” the owner to sign not just an agreement, but an exclusive one. On the one hand, it is not recommended to persuade the client. After all, playing the role of a beggar is not at all profitable for a realtor. Such an employee will only evoke hatred and pity in people, nothing more.

How can a realtor conclude an agreement?

How to conclude an exclusive agreement with a realtor

Every job that involves selling goods or services must have a unique offer. It makes it possible to explain to the client all the benefits of additional options.

The purpose of signing an exclusive agreement is to sell real estate at a certain price and within a certain time frame.

That is, in this case, only a realtor will work with housing. If the buyer contacts the owner, he must redirect the client to the agent.

What is an exclusive contract for the sale of real estate?

An exclusive agreement is an agreement concluded between a home owner and a real estate agency, according to which the organization acquires the exclusive right to sell a specific property.

An exclusive agreement limits the seller's rights to sell the home independently or using the services of other realtors.

In return, the apartment owner receives multiple benefits , which will be discussed below. The agency's right to sell, delegated by the seller, is secured by an agreement drawn up in writing and complying with the legislation of the Russian Federation.

You can download a sample of an exclusive contract for the sale of real estate here.

How to conclude an agreement with a seller to a realtor

First of all, the property owner begins to object with the following phrase: “I don’t want just one realtor! I need several agents. This way the apartment will sell much faster.” If the settlement is with a small number of people, then this opinion is generally correct. But in large cities (Moscow or St. Petersburg), the client will be included in the realtor database only after signing an exclusive agreement.

How can a realtor conclude an agreement? There are several ways to convince a client to sign documentation:

The property will not be able to be included in the general database of realtors.
Sellers will start calling the apartment owner and pestering him with the same questions. And this can last about two weeks. The seller will need to explain the same information to people every time. And it is not at all a fact that after this any of the buyers will come to view the apartment. It is much easier to tell everything about the property once to a realtor, who will independently handle the sale.
You can explain to the client that the agent works not only with the help of the main Internet sites for the sale of real estate. Each realtor usually has his own work pattern. This is what needs to be explained to the owner. It is important to make it clear that his property will be sold as quickly as possible with the help of a real estate agency.
The agent can quote the cost of advertising the listings each month. Of course, the total price will be announced, but you need to make it clear to the seller that such expenses only include those properties whose owners have entered into an exclusive agreement.
Selling an apartment is not a quick process. The owner will have to constantly spend time showing the apartment to buyers. It takes a lot of time. A realtor must be able to convince the client that all these matters can be handled by a specialist, and not by the owner of the apartment.

How to conclude an exclusive contract for a real estate agent

What is the essence of real estate business?

Let's say there is a real estate seller who wants to sell a certain apartment.
There is a buyer somewhere who wants to buy exactly the same apartment that the seller wants to sell. Thanks to the agent, the two meet. The agent brings them together and helps them agree on the price, terms and other terms of the transaction.

All real estate sellers do this. But agents, unlike sellers, do this consciously. Agents work according to a plan called a marketing plan or a property promotion plan, or a plan to find the ideal buyer. They know how to find the right buyer in the shortest possible time. Being specialists, they can use all effective tools for finding buyers.

If you don’t create and implement a good promotion plan, you can sell it, but at a low price. The owner, at the same time, may have a feeling of dissatisfaction; he may think that not all buyers have seen his property, and that it might be possible to sell it at a higher price if his agent had been more prompt.

In order to be confident in the quality of their service, so that the client-owner of the property is satisfied with the realtor’s service and would recommend him to his friends and relatives, in order to always sell entrusted apartments at maximum prices in the shortest possible time, realtors need to constantly improve their marketing plan. Use the maximum number of effective promotion tools. The agent should see his task as creating excellent exposure of the property on the market.

Exposure is the presentation of an object to the market in the most favorable light. This is a presentation of a property to the market that allows all qualified buyers to see the property and evaluate it. The higher the exposure of an object on the market, the more expensive the object will be sold. This is an axiom and the basics of real estate marketing.

How to conclude a lease agreement with the owner

Read on the topic: Where to look for clients for a realtor Tips for a realtor working with clients in the real estate industry Why and why a client needs a realtor How to attract clients to a real estate agency

A realtor can enter into an exclusive agreement with a client not only for the sale of an apartment, but also for the rental of real estate. What does the landlord get in this case?

Property assessment to determine rental value;
Tips to help a landlord increase the value of their home;
Search for tenants;
Property is shown to potential tenants with the help of a realtor;
An agent answers calls with questions about housing;
Documentation for apartment insurance;
Drawing up an apartment rental agreement.

In order for the client to understand why he needs an exclusive contract with a realtor, this can be argued with the above-mentioned advantages.

Insurance of real estate when renting it out is a mandatory component of the transaction. If an accident occurs with the housing (fire, flooding, etc.), the insurance company will pay compensation to the owner of the property.

The client will not need to spend his own time showing the apartment or responding to potential tenants. All advertisements for renting an apartment will indicate the numbers of only the realtor.

As soon as the agent finds those landlords who suit the tenant in all respects, he will invite the property owner for a meeting. The client will not be disturbed for other reasons.

When concluding an exclusive agreement, there are certain deadlines. The realtor undertakes to find landlords no more than one month after signing the documents. In this case, the client is provided with a guarantee that his apartment will be successfully rented out.

Buying and selling an apartment: working with a realtor

Real estate activities are not separately regulated by law. In Russian legislation, there is no definition of real estate activity or realtor. After the abolition of compulsory licensing in 2002, a special law regulating the activities of realtors has not yet appeared. At their core, realtors are intermediaries, that is, agents, therefore the provisions on agency activities apply to them.

Civil Code of the Russian Federation:

Chapter 39. Paid provision of services (Articles 779-783)

Chapter 49. Assignment (Articles 971-979)

Chapter 50. Actions in the interest of others without instructions (Articles 980-989)

Chapter 51. Commission (Articles 990-1004)

Chapter 52. Agency (Articles 1005-1011)

Law “On Protection of Consumer Rights” (Chapter III):

Article 27. Deadlines for completing work (rendering services)

Article 28. Consequences of violation by the contractor of deadlines for completing work (rendering services)

Article 32. The consumer’s right to refuse to fulfill a contract for the performance of work (rendering services)

Article 37. Procedure for payment for work performed (services provided)

Who are realtors

Realtors should not be confused with lawyers specializing in real estate transactions. The vast majority of realtors are not lawyers, but have the necessary knowledge mainly due to their accumulated experience in transactions. There is no specialization as a realtor; there are only short courses and seminars. In the first place among realtors are people from professions such as teachers, psychologists, trade workers, that is, those who are used to communicating with people and who are excellent at it. Since access to the profession is open to anyone, and the transaction amounts are always large, people come to this market mainly for easy money. Of course, very soon the beginner understands that money is not easy at all, that you need to work, and work a lot. However, a simple customer who is faced with choosing a realtor for a transaction can very often be misled about the experience, qualifications and integrity of the realtor.

Typically, realtors take a percentage of the transaction amount, the amount of which ranges from 1 to 5%, but the most common commission is 3%. Sometimes a realtor works for a fixed fee if he does not complete the entire transaction, but only some stage of it. Due to great competition, the cost of working as a realtor is gradually decreasing, and the quality of services provided in Russia as a whole is increasing. During the transaction, the client expects additional expenses that he needs to be prepared for - notarization, fees, payment for a safe deposit box.

When choosing a realtor or lawyer, it is extremely important to pay attention to what company he represents, what guarantees he gives, what documents he signs, and what actions he undertakes to perform. A realtor or real estate company may be a member of the self-regulatory organization “Russian Guild of Realtors”, but such participation is purely voluntary. Definitely, a realtor who is an active member of the Russian Guild of Realtors deserves more trust.

The realtor selects a suitable property, organizes viewings, clarifies the legal situation and checks it superficially. You should not rely on assurances of a 100% guarantee of the legality of the transaction, since no realtor is able to check all factors without exception, which may include possible risks. A realtor can only minimize obvious risks. The more information a realtor has about the property, the deeper he will be able to carry out his “legal” analysis of the transaction. Therefore, it is good when one realtor conducts a transaction from beginning to end, rather than several realtors involved at different stages.

The realtor checks the title documents for the apartment, identification documents of the owner, requests information from the Unified Register of Rights to Real Estate, studies the history of the transfer of rights to real estate, and requests an archival extract from the house register. However, we repeat that a realtor is not able to check absolutely everything. For example, to exclude the possibility that the second party to the transaction may be registered in a psychoneurological dispensary, the realtor needs to send requests to all psychoneurological dispensaries at all previous places of registration, which may be very far from the place of residence. Obviously, no one does this. At best, a realtor can recommend inviting a psychotherapist to the deal.

Do you need a realtor

We will not talk about the benefits of a profession or criticize another intermediary in our lives. A realtor is an assistant in the transaction, and his presence is not a prerequisite. Let's consider only the functions that it performs. Realtor:

- displays information about the seller’s apartment online;

-helps the buyer in finding a suitable apartment;

- agrees with the parties on viewing times and conducts screenings;

- clarifies key conditions from the opposite party;

- determines the terms of the transaction;

- arranges payment of the advance or deposit;

-consults on the necessary documents, possibly prepares the documents independently;

- independently analyzes the submitted documents;

- organizes the transaction and settlements for it.

As you can see from the functions, you can involve not only realtors, but also lawyers, and even just an assistant in such work. With certain knowledge and ability to work with information, you can conduct a transaction yourself. In any case, it is not worth saving on qualified advice when dealing with real estate.

Types of cooperation with a real estate agency

When contacting a real estate agency, the apartment seller will be asked to enter into an exclusive or non-exclusive agreement with the agency.

— Exclusive agreement

No one has the right to prohibit working with several real estate agencies, but the contract may stipulate penalties for posting information in other agencies. The client has the right to refuse the agency’s services at any time, and in this case the provisions on fines are easily challenged in court.

An exclusive contract with a realtor has both its advantages and disadvantages. The advantages include the confidence that the realtor will actually begin to work under the concluded agreement, since he will be sure that it is he who will carry out the transaction, and it is he who will receive the commission. The disadvantages include penalties that may be applied to the client if he contacts other agencies. The issue of legality and illegality of the accrual of penalties is resolved mainly through the courts.

-Non-exclusive agreement

The advantages include the prevalence of information about the apartment across many agencies, and as a result, a larger number of interested parties, both agents and buyers. The disadvantages include the lack of maximum disinterest of the realtor, since there is always the possibility that after the work done, someone else will sell the apartment, as well as the likelihood that the seller and buyer will prefer to refuse the services of a realtor altogether. To prevent the apartment from being sold through competitors, each realtor will convince the seller to reduce the price and sell the apartment as quickly as possible with this agency.

Contract provisions

Often the contract stipulates that the services are of an informational nature only; in this case, if any conflicts arise, the client will not be able to get his money back for unfulfilled services. If the client does not enter into an information agreement, but rather an agency agreement, under which the realtor undertakes to perform certain actions, attention should be paid to the following provisions.

It is important to clearly state in the subject of the contract all oral agreements with the realtor without exception. Describe in detail the requirements for an apartment; it is better to replace the phrase “search for a one-room apartment up to 900 thousand rubles in such and such an area of Berezniki” with “search for a one-room apartment for 800-900 thousand rubles in such and such an area of Berezniki, with an area of 32-37 sq. m, in houses with an improved layout, not the first or last floors, the house is not older than 1985, the presence of an elevator, etc.” All services that the realtor undertakes to provide must be fully reflected in the contract; it is better to replace the phrase “conduct a transaction for the sale of an apartment” with “find a buyer, conduct showings of the apartment, prepare documents for the transaction, obtain such and such a certificate, obtain such and such a conclusion , prepare an agreement, organize payments between the parties, etc.” It is better to indicate in the contract the real cost of the realtor's services. If the deal is alternative, then it is better to indicate this in the contract. If the transaction is direct, but double, for example, first the sale of one apartment and then the purchase of another apartment, then it is better to indicate separately what exactly is included in the cost of services - carrying out one transaction out of two or both. Describe what is meant by legal verification of the purity of a transaction, what documents are requested and from what authorities, how documents will be verified for authenticity. Check the authority of the person signing the agreement - power of attorney or order, passport, check the name of the organization on the seal and in the header of the agreement. Receive your copy of the agreement and keep it with you. Describe the procedure for paying for the work of a realtor - not based on the fact that part of the transaction has been completed, but upon completion of the entire transaction. Thus, the client protects himself in a situation where the transaction did not take place, but the realtor insists on payment for certain services - showings, documents, adding an apartment to the database, and others. If the realtor takes the originals of any documents, it is necessary to sign an act of acceptance and transfer of documents, which reflects that the documents must be returned to the client upon request. The absence of such a condition allows you to manipulate the client so that he does not go to another realtor. If a power of attorney is issued to a realtor, then only for the collection or delivery of any documents drawn up in the name of the client. If an unprepared client writes a general power of attorney or a power of attorney with too broad powers, there is a dangerous possibility that the apartment will be registered in the name of the realtor. It is necessary to specify in the contract the terms of the transaction, the conditions for terminating the contract and the conditions for the return of the advance or deposit. No amount of verbal agreements will help when a situation arises in which the realtor will convince that he has provided all services in full, and the client will prove that he did not receive everything that he agreed on.

Often, general language in a contract allows realtors to ask for additional payment for services that were allegedly not included in the contract. After signing the agreement, you can go to the notary and make a certified copy of the agreement. Perhaps the realtor will insist that upon completion of the transaction the client must return his copy of the contract to the agency. This requirement is illegal; the contract should not be returned to the realtor. There is a possibility that the agreement will be useful in court.

Realtor's responsibility

Whatever problems the buyer or seller of real estate may have in the future, the realtor has nothing to do with them. The Realtor is not responsible under any circumstances. If the documents were accepted for registration, it means that at that time they were in order and in sufficient quantity. If in the future someone challenges the right of ownership, then you should not blame the realtor for not having foreseen something. Such responsibility is never stipulated in an agreement with a realtor, and no realtor will take on these risks. Realtors can only give a 100% guarantee in words.

Features of buying an apartment in a new building

You need to ask the developer which real estate agencies have the right to sell their apartments. If the developer has his own sales department, then it is safer to buy an apartment through him. If the purchase is made only through a real estate agency, then in addition to standard agreements for the purchase of an apartment, you should receive from the agency a copy of the agreement between the agency and the developer, including all annexes, which will reflect that the agency has the right to sell not some abstract apartment in a new building, but specifically this one that interests the buyer.

Unscrupulous realtors

In this section, we will look at the most common tricks and tricks that you may encounter when communicating with a realtor. Realtors often resort to tricks not out of a desire to deceive the client and deprive him of money or an apartment, but to hide some facts or suspicions, fearing that the deal will fall through.

With an exclusive agreement, the realtor can show the apartment to fake people who will convince the seller that the apartment is not worth the money asked for it. As a result, the seller will be forced to reduce the price. The apartment can be sold for a price significantly lower than the market price.

A realtor must share the customer’s life values and be similar in thinking. If initially there is no trust in a realtor due to any indirect factors - method and style of communication, level of cultural development, appearance - you should refuse cooperation even with a very attractive option. This attractive option can only be a bait to lure you into full-fledged cooperation with all possible consequences.

A realtor should ask any questions, even the most inconvenient ones. By the reaction to such questions and the nature of the answers to them, you can find out a lot about the realtor. If the realtor made a slight inattention to detail or made a decision for the client in advance, then the answer to the question “why” will tell a lot.

When buying an apartment, realtors very often imitate non-existent competition, including in order to force the buyer to make a decision as quickly as possible or to increase the price of the apartment. The price increase may simply be due to the fact that the buyer really liked the apartment and, in the realtor’s opinion, he could have overpaid a little for it. At the beginning, realtors often value the apartment much more expensive, if only the seller would enter into an agreement with them. After the contract is concluded, realtors gradually begin to reduce the price of the apartment. Thus, the apartment could have been sold for the initially planned amount and quickly, if the seller had not been misled by inflating the cost and had not wasted time gradually reducing the price.

Sometimes realtors receive a portion of the payment for their work before they even do anything. Typically, the payment amount is equal to the cost of the realtor's services. After receiving such an advance, as a rule, the interest in fulfilling your obligations disappears.

All apartment viewings are free of charge. If a realtor asks for payment for viewing an apartment, then this is his main income. He is not interested in completing a transaction, but is interested in the maximum number of views with the maximum number of clients.

It is likely that the apartment owner may be in cahoots with the realtor. Realtors enter into a conspiracy with the owner of a very attractive offer and ask for an advance payment and a preliminary purchase and sale agreement. The realtor deliberately creates a situation where the buyer is not able to buy the property (there are no documents yet, the old apartment has not been sold, the loan has not been approved, etc.), the main purchase and sale agreement is not concluded, and payment under the preliminary agreement is not returned. The realtor and the apartment owner share their income. There are many options for deception and it is impossible to foresee them all, but when dealing with real estate, you should always remember that the likelihood of meeting a swindler, deceiver, or simply a criminal in this market is very high.

Conclusion

Involving an intermediary in a purchase and sale transaction will partially reduce the risks, but you should always remember that communicating with a realtor can have certain dangers. You should not rely limitlessly on a realtor and trust him immensely. You should monitor the work of the realtor and the entire progress of the transaction yourself, perhaps even involving a third-party lawyer. Of course, not all realtors are deceivers and criminals, but there are still some. And if forewarned means forearmed. A certain slowness and excessive caution will help save not only money and an apartment, but also nerves, health, and even life. What pitfalls can await each of the parties to the transaction, how to protect yourself as much as possible, how to provide for everything that is possible and how to recognize the slightest attempts at deception - we will consider all these questions in our next articles.