What is a Buyers Representation Agreement and Why do You, as a Buyer Need One?
A Buyer representation Agreement is a written agreement between a Real Estate Agent (or more specifically, their Brokerage) and a buyer. It states that the 2 parties will be working together for a determined amount of time to find the buyer a certain type of home.
A buyer's agency agreement puts in writing that your Realtor is working for you and is putting your interests before all customers and even their own interests. They are then obligated to do everything that is required to find you a home that meets your criteria. Plus, if you find that they are not putting your interests first, the agreement can be used to hold them accountable.
If for some reason you are not happy with your Agent’s performance, at the end of the contract you are welcome to end your relationship and seek help from a different Agent.
Having a Buyer Representation Agreement in effect is a good idea for a number of reasons.
1.Representation and expert advice – Realtor’s are experts in real estate. They deal in buying and selling real estate on a daily basis and know what is needed to complete a successful deal. Use your Agent’s experience and expertise to help to attain the right home for the right price.
2.Client relationship vs customer relationship - The difference is extremely important. As a client, a realtor owes you the highest level of fiduciary duties. This includes competence, diligence, full disclosure, obedience, loyalty, confidentiality, and full accounting. The Agent shall protect your best interests at all times.
As a customer Agents are only obligated to deal fairly, honestly, and with integrity.
3.Full disclosure – In a client relationship an Agent is obligated to tell you any information that is communicated by the seller. This could be regarding what price they are willing to accept, why they are moving, etc. In a customer relationship this does not apply.
4.Confidentiality – In a client relationship anything that you divulge to your Realtor must not be kept confidential between the buyer and the Agent.
Confidentiality does not apply to a customer therefore be advised that any information you tell an agent in this circumstance can be communicated to the seller.
5.Highest priority – By committing to work with an Agent by signing a buyer’s agency agreement, you are prioritized above any other customers who have not signed a written agency agreement. If you don’t commit to working with a Realtor, they will have to put their other clients first and foremost.
6.Code of ethics – As Realtors we must abide by the Real Estate Board’s code of ethics are obligated to deal with every customer and client in a professional and honest manor.
7.Listings – By working with a Realtor you will have access to listing before the general public does. Therefore you will be at an advantage to see homes before others do.
8.Network – Realtor’s are a part of a very large Realtor network. Your Real Estate Agent may be informed of other new listings before they even get to the market.
Written Buyer Agency Agreements are now mandatory and must be signed at the earliest opportunity and always prior to completing an offer to purchase. If you are uncomfortable signing one prior to familiarizing yourself with the Agent, interview them to see if they will be a good fit for you, ask to speak with a past buyer of theirs, or agree to go out on one appointment with them before agreeing to commit to signing the agency agreement.
It really is in the buyer’s best interest to be fully represented by a professional at all times.