Real estate buyers and exclusive agency contracts

So you're interested in buying a house and your mortgage broker has asked you to sign an exclusive agency contract, but you're afraid. Don't worry, many experts think that exclusive agency contracts are a very good idea, especially if you are refinancing a home. In the case of a refinance, you can still get out of the exclusive agency contract because federal law provides 3 days after the close of your deal to rescind the mortgage.

While you don't have that same option with a new loan, Jack Guttentag, Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania, still thinks exclusive agency contracts are a good deal. Ultimately, signing such a contract lets the broker know you are a serious client, not just a prospect. Thus, most brokers will focus on closing a good deal because most mortgage brokers survive by client referrals. (MORE)