Understanding the Buyer Representation Agreement

When sellers want to put up homes for sale, they usually recruit a real estate agent to list and advertise the property. The real estate agent represents the sellers during the sale process. All agents are ethically and legally mandated to act in the best interest of the seller. But, how can you trust that a real estate agent will take care of your interest? This is where a buyer representation agreement comes in.

A buyer representation agreement is a contract that legally binds a real estate agent and the buyer to a separate representation relationship. The contracted agent serves as the agent of the buyer in the real estate transaction. The buyer benefits from the expertise of an agent who helps in locating the property and negotiating for the right price. The contract is meant to recognize the time and expertise put in by the agent in the real estate transaction.

Importance of a Buyer Representation Agreement

1. High-Quality Service

Formalizing your relationship with a real estate agent through an agreement helps the agency to treat you like a client rather than a customer. The difference is that clients are entitled to superior services, unlike customers. The agent will treat you with respect knowing that failure to perform as per the contract will have consequences.

2. Avoid Misunderstandings

A buyer’s representation agreement is important because it clarifies expectations. This helps both you and the real estate agent know what exactly the two of you should expect from each other. There will be no room for confusion since everyone knows what role to play before, during and after the transaction.

3. Get More Without Paying Extra

In most cases, you will realize that the listing broker has already accepted to pay a commission on behalf of the buyer’s broker. In case that hasn’t happened, you can talk to your agent and request that he or she not show you any of those homes. But you can still view the homes bearing in mind that you will have to pay the broker’s commission if you close a deal.

4. Strength as a Team

When you and your buyer representative work in a formalized way, it means you have built a team dedicated to helping each other. You all understand that cooperating with each other will be the only way to succeed. A buyer representation agreement helps both teams realize the importance of working together to complete the transaction successfully.

5. Protects Your Rights as a Client

All licensed realtors are required to abide by a certain code of ethics. This means that whatever they do should be in the best interest of their clients. In other words, a buyer representation agreement ensures that a real estate agent doesn’t take advantage of you. Failure to abide by the code of ethics may lead to license cancellation.

In a nutshell, a buyer representation agreement is an important document both for you as a client and a real estate agent. It helps ensure that the agent will be paid while ensuring that your rights as a client will not be violated.

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