If you are looking to hire a real estate agent, you may come across a realtor non-compete agreement. This document is intended to protect companies` interests, but can also have an impact on consumers. As a potential buyer or seller, it is essential to understand these agreements before signing on with an agent.
What is a Realtor Non-Compete Agreement?
A non-compete agreement is a legal document that outlines the restrictions that are placed on an employee or independent contractor. It typically prohibits them from working for a competitor for a specified period after leaving their current position. In the case of a realtor non-compete agreement, it prevents an agent from taking clients or listings with them to a rival brokerage.
Why Do Real Estate Companies Use Non-Compete Agreements?
The primary purpose of a realtor non-compete agreement is to protect the investment that a brokerage makes in an agent. Training and marketing costs for new agents can be significant, and companies want to ensure that they can recoup those expenses. In addition, companies may rely on the relationships that agents build with clients, and do not want to lose them to a competing firm.
How Can a Non-Compete Agreement Affect Consumers?
If you are a homebuyer or seller, a non-compete agreement may limit your options. For example, if you work with an agent who is subject to a non-compete agreement and they leave their current brokerage, they may not be able to continue working with you. This could mean needing to find a new agent and starting over with someone else. Similarly, a non-compete agreement could prevent you from working with an agent you prefer if they have signed such an agreement.
What Should You Know Before Signing on with an Agent?
If you are considering working with a real estate agent, it is essential to understand if they have signed a non-compete agreement. Ask them directly about any restrictions they may have regarding working with you in the future. Additionally, do your research on any brokerage that the agent is affiliated with. Find out if the company has a reputation for enforcing non-compete agreements and what impact that has had on clients in the past.
A realtor non-compete agreement can have a significant impact on clients. It is important to understand the restrictions placed on an agent and their ability to work with you in the future. Before signing on with an agent, be sure to ask about any agreements they may have signed, and research the brokerage they work for to gain a complete understanding. By doing so, you can ensure that you are making the best decision for your needs as a buyer or seller.