The buyer’s agent is still relatively new to the real estate industry. And, Buyer’s Agency can be a bit scary and confusing to buyers who have not bought or sold a property recently. The agreement is simple and protects the buyer and their agent during the duration of the relationship.
As the practice of real estate progresses, so do the legal elements of the trade. By law, agents are now required to disclose agency relationships and the differences between being a client and a customer.
Customers are not in an agency relationship and cannot be adequately represented by an agent. The agent is prohibited from discussing anything in detail, including offer strategies or price opinions. An agent in a customer relationship can open up property for viewing, answer general property questions, and disclose what is known about the property.
The other side of the coin is the client relationship. In this relationship, the agent has duties to their client. They must keep confidence, advise to the best of their ability, and work solely for the buyer in a transaction.
Before Buyer Agency was part of the real estate transaction, both the agent working with the buyer and the agent working with the seller had a duty to the seller. No one really worked for the sole benefit of the buyer. That’s why the exclusive buyer agency agreement was introduced. This allowed the buyer to be represented entirely by an agent without fear of their interests or confidence being compromised.
Now that buyers agency is a common practice, there are a few things to keep in mind when being presented with an agency agreement.
An Exclusive Buyers Agency Agreement is a Legal Document
This agreement is legal and binding. It states that you agree to work exclusively with your agent for the reasons outlined in the contract for the term indicated in the contract.
Your agent agrees to be obedient, loyal, disclose, keep your confidence, accounting, and show reasonable care with your requests and questions.
Because these are legally binding agreements, you cannot decide to work with another agent without notification or cause. You must be released from an Exclusive Buyers Agency Agreement before working with another agent.
Understand the Duration of The Agreement
As of late, I’ve encountered a few would be clients that have signed a long-term contract (up to 12 months) with another agent. Most of them had no idea what they signed or for how long the contract lasted.
I advise not to sign an agreement for over six months. Agency contracts can be signed for a day, a week, a month, or whatever time period you feel most comfortable with so don’t feel pressured into signing a long term agreement.
Know the Scope of The Agency Contract
The scope will be defined in the contract, and it can be a blanket statement that covers all properties within a particular area or a specific property. The range can be amended to whatever serves the situation best.
If you are looking at a lot of properties in a specific region, then a blanket statement is best. If you are only interested in a small area for a short visit, then the scope should be more defined.
Too many people sign a six month to a year contract for a short visit. If you are on an exploratory search, a short term agency agreement may be a better option for you.
Why You Need A Buyers Agent
A buyers agent works only for you in a transaction or exploratory search. They keep your confidence and work hard on your behalf.
Most buyers agents understand that sometimes you want to drop in on an open house or at a new development, and that’s still okay for you to do. You should disclose to the host or sales staff that you are working with an agent. Then, if you like something and want more information, the two agents will work with one another to meet your needs.
Another benefit of having one agent working for you is that information and communication will be consistent. Trying to work with several agents means you will receive different data, and sometimes it will be conflicting information. Remember, not all agents are created equal.
Choosing a Buyers Agent
Before signing an agreement with an agent, make sure you are working with a full time experienced one. Check reviews, ask for a resume, and make sure you are comfortable with the person you choose. You are going to be spending a lot of time with your choice. Choose someone you click with.
How do Buyers Agents Get Paid
It will be outlined in the Buyers Agency Agreement. But, most times, the buyer’s agent is paid out of a cooperating agreement through the brokers. That means the agent is free to you.
If you have any questions about Buyers Agency or are in need of a Buyers Agent let us know. We’re happy to help. If you’re out of our area we can match you up with a great Buyers Agent in the area where you are looking.