“I met with a real estate agent to see if they could help me purchase a home. The agent said I had to sign a Buyer Representative Agreement before they would show me properties. Is the Buyer Representative Agreement a form required by all agents? I never had to sign one before.” J.B., Vacaville, CA
Not all brokers require clients to sign a Buyer Representative Agreement. The Agreement guarantees compensation to the broker when you make a purchase, which is redundant with the broker compensation section in most standard purchase agreement (offer) forms. The Buyer Representative Agreement goes a step further to document potentially unique features of the broker/buyer relationship. Some of these features could include:
- Guaranteeing a commission to your broker if they show you a home, then you submit an offer to purchase that home through another broker within a specified period of time.
- Providing the broker with a commission amount or form of payment that might be different from the commission offered by the seller’s broker.
- Confirming, if applicable, the existence and terms of any Buyer Representative Agreement you may have entered into with another broker.*
- Identifying the specific type of property, features or price range being sought (e.g. home, land, commercial).
Most buyers should have no problem signing a Buyer Representative Agreement. Like all real estate agreements, they should read the document carefully and consult with an attorney if they have concerns.
*Regarding Agreements with other brokers – the Buyer Representative Agreement may be Exclusive or Non-Exclusive. Buyers are free to work with as many brokers as they like on a non-exclusive basis. However, some brokers (my opinion is most) will not offer their services under a Non-Exclusive agreement or work with buyers who disclose they are simultaneously working with other brokers. Brokers concerned with the potential for buyers being obligated to other brokers often require a signed Buyer Representative Agreement to protect their compensation in the event of conflict. Buyers who have entered into previous agreements with other brokers may want to consult with an attorney to confirm they no longer have obligations under those agreements.
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