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Buyers… Prepare! Why a Buyer Representation Agreement is Right for You!

Buyers… Prepare! Why a Buyer Representation Agreement is Right for You!

In real estate, there are times when prospective buyers may think that signing an exclusive agreement with a particular real estate agent may limit their options. They may wonder…

“What if my agent can’t find a home that is right for me?”

“What if I could find the home of my dreams by myself?”

“What if I could save on agent commission fees by going it alone?”

A major reason for these questions and assumptions is that many buyers do not understand exactly what it means to be represented by a designated agent by signing a buyer representation agreement.

The term itself, “buyer representation agreement,” may be enough to scare a potential buyer away! It sounds intense and very formal; but, what does it even mean?

Put simply, when it comes to real estate, a buyer representation agreement is an employment contract. It lets buyers know that a particular real estate agent will work exclusively for them. It also outlines both the agent and buyer duties. For example, a buyer representation agreement may say that a realtor is obligated to show a buyer homes that they may be interested in and write up a contract when a buyer is ready to make an offer on a home.

In order for a realtor to keep up their end of a buyer representation agreement, prospective buyers have some responsibilities, too. Some buyer representation agreements say that buyers must give their agent a description of the properties or features that they are interested in. The agreement holds both the agent and buyer responsible for keeping up their ends of the deal.

Just like every other employment contract out there, a buyer representation agreement also outlines the agent’s compensation for doing their job. But, unlike every other employment contract out there, a buyer representation agreement may also outline that a buyer is not responsible for paying that agent’s compensation. How can that be?

Well, if a real estate agent does not find a buyer a home, the buyer may not be responsible for paying the agent. Even when realtors find a home and a buyer makes an offer, it is often the case that the seller will cover all agent fees. So, yes, for buyers that means their real estate agent typically works for them for free! 

Further, the buyer representation agreement also means something more for buyers. It means that the agent they sign with is obligated to give them the best of their efforts. And, that means doing things for their buyers that they do not do for non-clients, like taking the time to drive by a property that a buyer might be interested in before taking the buyer to see it or making the extra effort to go above and beyond scouring only MLS listings to find for sale by owner properties that meet a buyer’s criteria.

In doing those “extras” for their clients, agents are able to establish and build the loyalty that a buyer representation agreement guarantees them from a buyer. Thanks to the buyer representation agreement, buyers understand what to expect from their agent from day one.

As far as a buyer wondering “What if I could do better on my own?” most buyers simply do not have the scope or market know-how that real estate agents have. So, they are unable to find homes that might not be easily listed. And, they may not know the right questions to ask when it comes time to make an offer. By signing a buyer representation agreement, buyers do not have to worry about knowing what questions to ask, because their agent is able to ask the tough questions for them.

With all of the buyer perks that come along with signing a buyer representation agreement, buyers typically feel a sense of relief in knowing that their real estate needs are being represented by a professional that they can trust. However, if a buyer or an agent feels that their loyalty has been broken or was never fully-established, buyer representation agreements are typically based on mutual consent. Buyers and agents who recognize their working relationship is not beneficial, are often able to terminate the agreement, rendering it null and void.

If you’re a buyer who is ready to work on finding the home of your dreams with an agent who is eager to help in your search, contact a Berkshire Hathaway HomeServices The Preferred Realty agent today.