Buyer Agency Agreements

Some Basic Facts...

Generally, Buyer Agency Agreements or Buyer Agency contracts commit home buyers and real estate agents to work together.

Before discussing buyer agency agreements, lets review how real estate agents' roles differ.

Assume that any real estate agent is a seller's agent until you know otherwise!

In most states a real estate agent must disclose which party he or she works for... by default its usually the homeseller, and the agent will typically disclose during the first substantial contact with a homebuyer, whether it's in person, by telephone, by mail, or in an email.

Here's a brief look at some of the details you might hear during disclosure:

Seller's Agent

• The agent works for the firm that holds a seller's listing.
• The agent's loyalty is with the homeseller.
• Buyers should not give confidential information to a seller's agent.
• Any agent is a seller's agent unless you've signed a contract to change that status.

Buyer Agent

• An agent who has signed a contract to represent a buyer in a home search and sales transaction.
• The buyer agent's loyalties are to the homebuyer.
• Buyer agents should not disclose confidential information about the homebuyer to the seller or seller's agent.
• Some buyer agents work exclusively with homebuyers and never take listings.
• Many do both...List and Sell.

Dual Agent

• A real estate agent who works for the firm that holds a seller's listing, and who has signed a buyer agency agreement so as to represent a buyer who wishes to purchase that listing.

• The agent has a loyalty to both the buyer and seller.
• Ask your agent to explain dual agency before it happens.
• Get all of the what-ifs sorted in advance.
• Find out exactly what you can expect from your agent should dual agency occur.
• Dual agency must be agreed to in writing by both the homebuyer and the homeseller.
• Real estate laws differ, so ask about dual agency rules in your state.

• Verify that the agent can work as a buyer agent.



• Ask the agent to explain the services you can expect if you make him/her your buyer agent.



• The buyer agency agreement should cover a specific time period agreeable to both parties.



• Buyer agency contract should be in writing.



• The buyer agency contract should outline the expectations of both the buyer and the real estate agent.



• The buyer agency contract can be expansive or limited to cover properties for sale only in a specific geographical area.



• Buyer agency agreements should spell out the agent's compensation.
  Buyer agents are usually paid a portion of the seller agent's commission at closing, but not always.
  Ask how agents are paid in your area.
  
  
• If you buy a 'for sale by owner property', will you be required to pay the agent's commission?
  Spell it all out in writing now.