What is an Exclusive Buyers Agreement and Should You Sign It? Part 1

Signing ContractThis article is written for Oklahoma buyers that are shopping for real estate, whether it's a home, land, ranch, commercial, waterfront, etc. etc. 

You have decided that it's time to purchase.

You've already visited with a reputable lender and been at least pre-qualified for a loan, so you know how much you can afford.

When you come in contact with a real estate agent during the next few days, you may be asked to sign a Buyers Agreement. 

 

So what is a buyers agreement and should you sign it? 

 

First let's go over what a Buyer Broker Agreement is.  Basically, it's an agreement between you, the buyer, that you are going to work, usually exclusively, through a specific real estate agent, to buy your property.  It means that you are not going to call any other agents (you will expect your agent to do that) about properties. You will call your agent with any questions about any properties, or to view properties, etc.. all inquiries and information will be through your real estate agent. 

 

Should you sign a Buyer Broker Agreement? 

 

Well, really only you can decide that BUT let's talk about the details you might find in an agreement, then you can better make that decision.

 

The Oklahoma Real Estate Commission has designed and made available on their website a Buyer's Agreement that is often used by Oklahoma real estate offices.  In Oklahoma, when signing a Buyer's Agreement, this would likely be the one that would be presented to you to sign, so using it as an example for specifics, let's go through this Oklahoma form, paragraph by paragraph. We'll break this into three posts to take the information in more bite size pieces:


  • A Buyer Broker Service Agreement is an agreement (service contract) between you, the buyer, and a real estate broker. 
  • You, the buyer agree to purchase, lease, option, or exchange real estate through the services and resources of the broker that you are signing the agreement with.

 

 

Those services my include, but not be limited to:

  • Consultation regarding particular properties (*Consultation may include that Broker will have found properties they believe you might be intersted in - which they will bring to your attention viewing and consideration). 
  • Availability of financing. (*Even though you've been pre-qualed, what type of financing is availabe for specific types of properties?)
  • Commiting your offer to purchase, lease, etc to writing (*writing the contract to purchase, etc.)
  • Receiving delivery of offers or counteroffers that have been made by you and returned by seller. (*broker receives the offer, is the same as if you had received it)

 

 

If you sign a buyer's agreement, you are representing that you:

  • Have not signed a written brokerage agreement currently in force with another Broker.
  • Are not relying on the Broker to determine suitability of property for your purposes.
  • Are not relying on the Broker to determine environmental or other condition of the property.

 

 

Broker:

  • Shall NOT be obligated to discover defects in the property
  • Shall NOT be obligated to advise on matters outside of the scope of his/her real estate license.
  • Does not make any representation or warranty with respect to the advisability of any transaction contemplated by you, the buyer.
  • Does not make any representation or warranty with respect to the legal effect of any transaction contemplated by you, the buyer.
  • Shall cooperate with legal counsel of buyer's choice (*on details of this transaction).
  • Since Broker is not an expert in matters relating to law, tax, financing, surveying, structural condition, hazardous materials, engineering or other highly specialized areas, broker advises you, the buyer, to seek professional advice relating to these matters. 

 

We've gone through the first two paragraphs of the Buyer Broker agreement that was designed by the Real Estate Forms Committee of the Oklahoma Real Estate Commisison .  Much of the wording within this article is straight from that form. 

 

Next post, we'll talk about how long the agreement is in force. 

Image courtesy of Flickr user:

alexandralee

Thank you!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 


Judi Barrett

Broker, Integrity Real Estate Services,

Office Address:  1280 Brown Addition  Rd., IDABEL, OK 74745  580-212-5946 

Judi Barrett, B.S. Edu., 

 

Integrity Real Estate Services 

Our Name Says It All. 

 

 

 

 

 

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33 Comments on What is an Exclusive Buyers Agreement and Should You Sign It? Part 1

20 Most Recent Comments Displayed Show All

JUL
29
2010
134,415 Points 2 Featured Posts Called Shot Master

Judi - I am a big fan of a buyers rep agreement as a first step to showing a client homes. We want to be in a relationship where the best interests of the clients are put at the top and a signed rep agreement does just that...
10:46am • #14
975,843 Points 6 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I see it as an employment agreement. The Buyer agrees to see that I get paid for the services that I provide.
11:58am • #15
Attended Rain Camp

Thanks for the post Judy. I wonder how many buyers would look at that and say, "And what exactly am I paying you for?" Goes to show that agents need to really outline the value they bring to the table.
12:20pm • #16
762,867 Points 106 Featured Posts Outside Blog Called Shot Master

This is a comprehensive explanation of the buyers agreement.  Really good information for consumers to know.
12:28pm • #17
464,155 Points 1 Featured Post

This shows that the buyers are serious and want me to be their representative.

Patricia
1:31pm • #19
464,155 Points 1 Featured Post

This shows that the buyers are serious and want me to be their representative.

Patricia
1:31pm • #20
861,517 Points 174 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

We have buyer/broker agreements here in California but I have yet to see anyone sign one.  Buyers are too fickle and those that are loyal would probably be offended at the idea of being "locked in".  I personally don't ask anyone to sign them, simply because I find my clients to be loyal without needing a contract.
2:33pm • #21
1,653,043 Points 134 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Richard,

:) Glad you agree with #1.

There you go.. it is different in different areas.

I did not know that about Texas.

 

Michael,

Yes.  I had written a post last week about signing a buyer broker agreement and I never could get happy with it, it just didn't saying what I was trying to say which mainly for buyers to understand what they sign when they sign one. 

I rarely ask a buyer to sign one.  But I want Oklahoma buyers to understand what one is.  The second is this series will talk about how the buyer rep gets paid.
3:15pm • #22
1,653,043 Points 134 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Lorraine,

For some reason I thought that most of the nation was using them all of the time, except for our area.  Guess I was wrong.

 

Brent & Deb,

Sounds like you guys have it worked out for what works for you.

 

Cheryl,

Yes, I believe so.. And the agent is agreeing to do the work.
3:16pm • #23
1,653,043 Points 134 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Patricia,

It does show that they are serious about wanting their agent to get busy and do a job for them. :)

 

 

 
3:22pm • #24
1,048,905 Points 397 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Well written post and explanation of the BBA. It really is a great benefit to the buyer and the agent to have a written agreement that outlines who does what and when. Not sure why every buyer doesn't insist on having an agreement.
5:11pm • #25
1,361,178 Points 244 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Judi, I know of Realtors that do not get a Buyer to sign a Buyers Agreement, and that to me is not wise.  They are taking a huge chance on doing most of the work and then not getting the deal, and that is not a wise thing to do.
5:30pm • #26
235,152 Points

Hi Judi:

Very easy to understand post.  I also like that you're breaking it into segments so you don't overload the reader with too many details at once!
5:31pm • #27
265,824 Points 8 Featured Posts Called Shot Master

That is a great explanation for a Buyers Rep Agreement!
9:37pm • #28
JUL
30
2010
142,363 Points 9 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

It was a well written post Judi. Don't trouble yourself over certain comments; #1 is likely a "copy and paste" to merely quickly acquire the 10 points awarded for commenting on a blog post.

Let me clarify Richard's (#7) comments  - in Texas, agents are considered a sub-agent of the seller. The ONLY way to sever that relationship is with a BRA. Texas allows agents to act as an "Intermediary" with written consent from all parties. [Some states refer to this as "Dual Agency" which is a bit misleading.] Under the Intermediary relationship an agent does not represent either party; they can only provide advice, and help "facilitate" the sale. He is correct that the Commission does not provide the form, the State Association does.

However, I disagree that it must be signed ONLY if it is an 'in-house' deal. The form should be reviewed with your customers/prospects and signed at the time of Agency Disclosure. If not, then the agent must take exceptional care not to violate the sub-agent relationship and limits what information can be shared with customers/prospects and curtails other actions the agent can perform. Any Texas agent showing properties without a buyer's rep agreement represents the seller. This is not the case in other states, like Louisiana.
1:04am • #29
698,000 Points 15 Featured Posts Outside Blog Called Shot Master

Well-written and bookmarked.   Thanks, Judi.  This is a must-read. 
8:21am • #30
JUL
31
2010
148,265 Points 6 Featured Posts Outside Blog Attended Rain Camp

Judi,

thanks for taking thetime to address such a difficult subject for most.  Some agents are afraind to get the BAA signed.  Might scare off the client.
10:25am • #32
868,871 Points 5 Featured Posts

Judi,

Thanks for the consumer explanation, it is a very good and careful one.

Ontario uses the same approach, but I'm alawys amazed at the number of people who really don't understand it.

Brian
1:16pm • #33
594,206 Points 22 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Judi:  Glad that you stopped by my Animal Rescue post because I have not run across your blog in all the time I've been on A.R.   Now that I am here I've subscribed!
9:16pm • #34
AUG
01
2010

That is a excellent outline of the Buyers Broker Agreement, Very informative. I myself have never used it for my clients. When I find them the home that they love, we write a contract. I don't want the buyer to feel like, if for some reason I am not doing a good job in finding them a home or they don't want to work with me (which hasn't happened yet) that they are not obligated to stay with me. I give my buyers the very best and have never had a client go with another agent. Thanks for the post, it really is very informative for agents that do use it!
9:58am • #35

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