Happening NowBuyer's Agent (Investor-Focused)

What a six month tail clause in a buyer's agreement actually means

A buyer-broker agreement is worth reading closely before signing, which apparently makes a buyer unusual. Three clauses that come up often and deserve plain-language attention. One. "Protection period: 180 days following expiration." The standard reading is that if the agent shows a house in March, no purchase happens, the agreement expires in June, and the buyer purchases that same house in September directly from the owner, the fee is still owed to the agent for the full amount. Two. Watch for a property description that says "residential property of any type within the county," with no price range and no buy box. That language means any purchase in the county during the term is covered whether the agent was involved or not, which is much broader than most buyers expect. Three. Compensation phrased as "3% of the purchase price, or the amount offered by the listing broker, whichever is greater" means if a listing side offers 3.5%, the agent gets 3.5%, and if it offers nothing, the buyer writes a check for 3%. None of this means the agent is acting in bad faith, and a good agent earns the fee. The point is understanding exactly what is being agreed to before signing, rather than accepting a broker's assurance that the language is boilerplate. A reasonable version for an investor buyer narrows the property description to an actual buy box, ties the protection period to properties the agent demonstrably introduced, and keeps compensation to a flat percentage regardless of the listing side's offer.

wendy_park48 CU1BPRO 17

Answer

stephen_ok9ActivePRO

Your reading of clause one is how those are generally meant to work. The point of a tail is to stop a buyer from touring with an agent, letting the agreement lapse, then going around her. That's a real thing agents get burned by, so the clause isn't unfair in principle. Whether 180 days is reasonable and how a court would apply it to a specific fact pattern depends on your state and your facts, so a real estate attorney is the person to read your version.

What buyers usually negotiate is scope rather than existence. Instead of the tail applying to everything, it applies only to properties she introduced you to in writing, with a list attached or maintained by email. Then the tail can be 180 days and you don't care, because the covered set is four houses you both know about.

Clause two is the one I'd push on hardest. "Any residential property in the county" with no buy box means she's paid on your kid's condo purchase.

stephen_ok9ActivePRO

3 replies

brandonlee36 SP1BPRO 15

The greater-of language in clause three is common and worth refusing. It means she never earns less than the listing side offers and can earn more than you agreed, so your fee is set by a stranger's marketing decision. The better structure is a flat percentage or dollar amount, with any listing-side contribution credited against it. Then your number is your number. If the seller side pays it, good, and if they pay half you pay half. Also, the thing most buyers learn later than they should: the agreement is with her brokerage. Ask what happens if she moves.

brandonlee36 SP1BPRO 15

aaron_fitz10 PU1APRO 13

She said it is boilerplate, and that is true in the sense that it is the state association form most people use. Boilerplate does not mean unchangeable. Every one of those blanks got filled in by someone and can be filled in differently. The fix @stephen_ok9 gave on clause one is the one that works in practice, a written list of introduced properties. It usually takes one email. If she will not do that, or will not narrow the county-wide language to something like two to four unit residential between $120k and $400k, that tells you more about the relationship than the contract does.

aaron_fitz10 PU1APRO 13

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