6 REASONS TO SIGN A BUYER REPRESENTATION AGREEMENT
You have decided to purchase a new home and recognize the need to find a competent Real Estate Agent to assist you. You Buyers Agent representative may ask you to sign a Buyers Agency Agreement.
What is this document? Why should you sign it?
A Buyers Agency Agreement is a formal legal document designed to formalize the agency relationship between you the buyer and the Real Estate Agent that will be representing you. The document will outline in detail what services you can expect from your agent and likewise what the Real Estate agent expects from you. Consider it a helpful tool in adding clarity to the expectations of each party. It will establish loyalty between you and your representative and is the first step in establishing a confidential client relationship.
- More Service without Paying more for it – In North and South Carolina unless negotiated otherwise Sellers have agreed to pay the Buyers Agency Commission. So Buyers can have access to quality services without any extra expense or upfront cost. This typically applies to all homes listed in the MLS system by Real Estate Agents and Builders. The exception would be “For Sale By Owner” where sellers have not elected to use a Listing Agent. In some rare cases, a seller will not agree to pay a Buyers Agency Commission and you can either ask your Buyers Agent to not show you these properties or discuss how compensation will be handled in these cases.
- Be a Client not a Customer – There is a big difference. Signing a Buyers Agency Agreement establishes a Fiduciary relationship with the Real Estate Agent that comes with a set of duties and obligations to you the buyer which includes, loyalty, confidentiality, accounting, disclosure etc. A real estate agent is obligated to present to you a “Working with Real Estate Agents” disclosure which explains the various agency relationships that exists. As a client the Real Estate agent is working for you and your interest. In most cases the Seller is working with an agent to look after their interests, so it only makes sense that a Buyer should have the same benefit. Any and all information disclosed to your Real Estate Agent is to remain confidential under your Buyers Agency Agreement. If you choose not to sign a buyers agency agreement then the Real Estate Agent becomes a Sub Agent to the seller and has no obligation to keep any of your motivations or other confidential information private and is free to disclose information to the seller that may assist in procuring a sale.
- Avoid any Misunderstandings – Signing a Buyers Agency Agreement will clarify all the expectations and loyalties of each party in the agency relationship and avoid any misunderstandings.
- Agency Relationships are based on mutual consent – A Buyers Agency Agreement will typically include a time frame to be agreed upon between the parties. The time frame will often be agreed upon based on how long you anticipate being in the market. Buyers relocating from other states with homes to sell may opt for a longer agency relationship period to allow time for several trips and to see the existing home. Where a relocation buyer that needs to move more quickly may opt for a time period. In either case it can all be discussed and agreed to between the parties. Like any relationship at the beginning each person may be trying to determine if the fit is good between the parties. In some cases a Realtor or Buyer may discuss working together for a few days under a trial period to insure each party is comfortable. If you choose not to immediately sign a buyers agency agreement it is generally understood that while you still do not have a written agreement that any properties shown to you the Real Estate Agent will be entitled to a commission based on procuring cause. Most professional Real Estate Agents will expect a signed agreement very early in the process as its to the benefit of each party to have an agency agreement. If for some reason the Agency Relationship is not going well most professional Real Estate Agents are willing to end the agreement early.It’s important to remember that a key component of the relationship is loyalty. The Buyers Agent may be handling many tasks for you beyond showing you property. If you sign an agency agreement you should make every attempt to see the relationship through and not be swayed by family members or friends that suddenly have an uncle or brother in Real Estate.
- Knowledge is power – Having someone to guide you through the process will not only relieve much of the stress associated with the transaction but could potentially save you from making any mistakes. A professional Buyers Agent will do the necessary research to insure you are making a wise purchase decision and that your interests are protected. Most buyers only buy a few homes in their lifetime and are not knowledgeable of many of the aspects of real estate and associated risks. For most people it’s the biggest investment they will make and having your own representation can save you from making costly mistakes. It’s an easy decision especially when the cost is most often paid by the seller.
- Strength as a Team – Working together with a Signed Buyers Agency Agreement you have formalized your relationship with a professional Buyers Agents. As a team working together with your best interest in mind you will achieve the best buying experience possible.