The Buyer’s Representation Agreement is a simple form that says the Broker will represent the Buyer for the purchase or lease of real estate in a designated area & for a specific amount of time. It also lays out compensation guidelines and some additional legal information.
The most important reason to sign a Buyer’s Rep Agreement is that it makes you the real estate agent’s client. If you do not have a signed buyer’s rep agreement in place, you are just a customer.
Customer vs. Client…Is there a big difference? Absolutely!
If you are a customer, the agent has no fiduciary duty to you. As a client, they do. Technically, if you are a customer & the agent is showing you homes, their fiduciary duty is to the Seller. If you have a Buyer’s Rep Agreement in place & are therefore a client, the agent is required to disclose, negotiate, operate and otherwise work on your behalf.
Unlike a client relationship, the brokerage does not owe a customer the duty of confidentiality – only honesty and fairness. However, a brokerage can still provide many valuable services to a customer.
A buyer who chooses to be a customer must understand that “their” agent legally works for the seller as a sub-agent and owes the seller confidentiality. Therefore, anything a buyer says to “their” agent, while believing it’s being said in confidence, must be relayed to the seller. In the vast majority of cases, the buyer elects to be represented as a client since it’s in their best interests to do so.
Benefits of Signing The Buyer’s Representation Agreement
While the fiduciary duty really is the main reason to sign a Buyer’s Rep Agreement, having one in place will also provide you with many benefits during your home search & purchase.
“Agency relationships are based on mutual consent. While most Buyer’s Representation Agreements specify a time period, they can be terminated early if both parties consent. Most buyer’s reps are willing to end the agreement early if the working relationship isn’t going well. Some buyer’s reps also offer Buyer’s Representation Agreements for as little as one day for the purpose of giving both parties a brief trial period to explore working together.”
Even though the language in the Buyer’s Representation Agreement does feel very formal, it is actually designed to work in your benefit and ultimately makes for a better home buying experience.
Are you looking to buy a home now or in the near future, we would love to help you find an amazing home, help you negotiate the best deal, guide you through the ins & outs of the transaction & closing and we would be excited to be by your side when you get handed your new keys! There are may steps along the way & we can be there to help make every one of them easier on you & ultimately make the entire process as rewarding as we can for you… That’s what we do for our clients!
Let us help you make your next move!