Should You Sign a Buyer's Broker Agreement?

A buyer’s brokerage is a contractual agreement that ties a homebuyer to a specific real estate agent. A buyer’s brokerage is an ironclad contractual agreement. If a buyer should find a For Sale By Owner who refuses to cooperate with Realtors, the buyer would still owe a fee to the agent they purchased that home.

Is this truly a benefit for the buyer?

Brokers implement Buyer Broker Agreements more to protect themselves than to protect the buyer.

You see, an agent invests a lot of time and effort behind the scenes, reviewing Multiple Listing Service data and previewing homes before they show them to clients. There is also the time and money spent driving prospective homebuyers to the various homes.

At any time, the client could turn around and buy from a For Sale By Owner or utilize the services of another agent they meet at an Open House or by calling on an ad. If a buyer switches allegiances at the last moment, the agent’s investment in time and money is lost.

Generally when an agent represents a prospective purchaser of real property, they work diligently for that individual. With the advent of agency disclosure laws in most states, the duties and responsibilities of agents to their customers are specifically outlined.

The real estate industry can be very difficult for nonprofessionals to understand. A buyer without a written agreement is fair game for any agent that can get them to write an offer regardless of the amount of time and funds another agent has invested in them. Sadly, many buyers are lured away from an agent they have worked with by a wily competitor.

Will a buyer's broker work more diligently for a buyer because they have a signed contract? In theory, they will work harder.

What often happens is an agent will work with a buyer for a few weeks to several months or longer. The term of a buyer's broker agreement is negotiable. Although many agents might request a 90-day commitment at minimum, you are free to ask for a 24-hour, seven-day or 30-day term; it's whatever you can negotiate.This effort includes: 

• Introducing the buyer to lenders and obtaining loan preapproval letters
• E-mailing listings that fit the buyer's requirements
• Calling listing agents to determine availability
• Making appointments with sellers before showing homes
• Driving the buyer from one neighborhood to the next, sometimes touring up to 10 homes a day

Buying agents do not expect formal agreements, but it makes them feel more comfortable knowing that the Buyer is serious enough to sign a Brokers Agreement. Like listing agreements, buyer's broker agreements are typically bilateral, which spell out the rights and duties of both parties. Because bilateral contracts are essentially a promise for a promise, if the agent doesn't perform, you have the right to fire the agent.

If you are comfortable signing a contract which obligates you to working with a particular broker, by all means, do so.  If you are not comfortable, just proceed slowly.

For additional explanation, simply give me a call or send me a note -- 703 336 3745 or Karrina.Brown@gmail.com

     Respectfully,

    Karina Taylor Brown