Dealing with the Buyers Agency Agreement in Real Estate

Many people often overlook the need for buyers’ agency in real estate. But it is an indispensable part that requires a proper understanding of how it works. When you buy a home for the first time, there is much at stake in navigating your way to safety. You will have to deal with the choice of the house, financing your dream home, doing all the paperwork, and finally moving into the home. 

At a particular stage, you will need a real estate company to serve as the buyers agency, serving the buyer’s interest in the deal. You must prepare as a buyer to fulfill all the requirements and complete all the paperwork before closing the deal. It will then not be an excuse for ignorance if anything goes wrong. Moreover, the process becomes smoother and more accessible without any extra pressure.

As a buyer, you can demand a buyer’s agreement in the deal process. So, what do you have to know about the buyers’ agency agreement, and why do you need to sign one? We will be considering the definition of the buyer’s agency agreement, should you sign the agreement, and the possible advantages and disadvantages of signing a buyer’s agency agreement. 

What is a Buyer’s Agency Agreement?

A buyers agency agreement is a legal contract between a buyer and the real estate agent representing the seller. The document shows the terms and conditions between the two parties working together. Also, it contains both the expectations, goals, and objectives of the working relationship between a buyer and the real estate agent. This agreement is vital to ensure that both parties are protected in case of either party defaults to the terms of the contract.

The buyers’ agency agreement can also be referred to as a buyer representation agreement or a buyer broker agreement. Ideally, your agency can expect to prepare the contract and initiate the process. On the other hand, you can request one if it is missing in the deal process. Whereas the design will depend on the nature of the real estate property. Also, the buyers’ agency agreement may vary from one company to another. 

In other cases, it is tailored to the client’s needs to acquire an apartment. In all, the buyers’ agency agreement must contain all the terms of duties between the agent representing the agency and the client seeking to buy a property. Some standard information may include the duration of the partnership, the percentage compensation from the deal, the buyer’s representation, and exclusivity terms. Then, both parties must append their signatures to validate the document. 

How does a Buyers agreement protect the Buyer and the Agent?

For example, a real estate agent may have been processing a deal with a client, taking him to different properties. The agent may take the buyer to open home auctions or link up with suitable mortgage lenders. At the end of the day, if the buyer goes to buy the property from another real estate agent, then the former agent has lost. That will be unfair to him, hence the need for signing an initial buyers agency agreement. He also deserves compensation.

Moreover, it may happen that a client has been corporative with the real estate agent. But if the agent refuses to perform his legal duties by showing house options to the client or ignores multiple calls or house, that is a problem. A potential buyer will likely explore using another real estate agent. If such happens, the buyer’s agency agreement protects the buyer from the result of such actions and does not owe the former agent any commission. 

Should you sign a Buyers Agency Agreement

It is vital that before you append your signature to any legal document, you should understand what it is about. For instance, you need to fully understand all the stated terms and conditions of the buyer’s agency agreement. If any item is not apparent, it is also the right time to ask questions and clarify as much as possible. Otherwise, there will not be any room for any excuse afterward. Moreover, after signing the agreement, you cannot deny any content.

You don’t want a surprising discovery that you owe a particular fee or intentionally broke the law. Suppose you need help interpreting the legal document. In that case, you can have a buyer’s agent or lawyer on your side to enhance the smooth process. On the other hand, when you sign a buyer’s agency agreement, you have more peace of mind that the terms are secure and cannot change. If at all anything require review, both parties will do it. 

Pros of Signing a Buyers Agency Agreement

The first thing to remember when signing a buyer’s agency agreement is that there will be no surprises. Both parties that append their signatures will be on the same page while the deal is valid. You may need to review a few things that may improve, including both parties’ responsibilities. A signed agreement shows all the standard duties of both parties, agency, and clients, with all the clarity that each party may need.

The buyers’ agency agreement also shows the preferred conditions of each party. For instance, your agreed means of communication, the partnership’s duration, each party’s exclusive rights, and many more. Another good reason you should sign a buyers agency agreement is to enable you to find a great deal with a real estate agent without wasting time. Your agent should be able to trust you as much as you trust him.

Cons of signing a Buyers Agency Agreement 

A top disadvantage of signing with a buyer’s agent is that you are forever stuck to an agent. If this agent develops an attitude while the agreement is open, you cannot just break off the contract. In other words, you are forced to stay with the agency he doesn’t love. If you attempt to break off the contract, you will have to pay a termination fee to the agents, which is an extra cost. It is also unsafe to enter into a long-term deal with an agent.

In other words, a shorter duration of the agreement means that you will have time to review it in the future if you have to use the same agent. But suppose you breach any of the buyers’ agents’ conditions. You should pay some as a commission to avoid being sued or paying a higher fine. Go through the buyers’ agency details and negotiate for anything that could change. Go for the best and get the best always.