Dear Holly,
I have been speaking with a Realtor who has been providing me with information about properties in my price range. We have plans to start looking at homes next weekend. All of the sudden, he is asking me to sign a contract that says he is my Buyer Agent! I don't like to sign unnecessary contracts and I am not sure I want to sign this one. Is he being unreasonable or should I consider signing this so that he will take me out looking at houses?
Thanks for your opinion,
First Time Buyer
If you are ready to begin seriously looking at properties, you should strongly consider signing a Buyer Representation Agreement. I can't advise you if you should sign with this particular agent (Do you trust him? Do you have a good rapport?), but if you have developed a good working relationship and would like his help finding and working through the details of your purchase, and if you trust him to negotiate on your behalf, I would strongly consider doing so.
Without this contract in place, any information that you provide the agent that is helping you
is technically supposed to be reported back to the seller (without a buyers agent agreement, the agent is a sub-agent of the listing agent, who represents the seller). By signing the agreement, you are creating a legal relationship that mandates that all information you provide is confidential and may not be revealed to the sellers. This can be particularly important when it comes to financial information (for example, do you have more to put down than is revealed by your offer?).
There is a component of protection for your agent, too. Without this contract, you might let them show you homes for 8 Saturdays in a row and on the 9th Saturday, sit down with another agent and write a contract. Since all of our pay (every single cent, in most cases) is received in the commission paid at settlement, that agent would be left with not a penny to compensate them for the time, effort and expense of showing you homes. The Buyers Representation Agreement says that you will have them represent you in the purchase of your home and that they will be paid for that assistance. If you use another Realtor, without legally breaking the contract, you might be liable for paying them a commission when you purchase a home.
At the end of the day, the Buyer Representation Agreement should be beneficial for both of you. If you are nervous about how you will work together once you get out from behind the desk and start hitting the pavement, you might consider asking him to do a one-week agreement. This protects your Realtor in the event you find a home this weekend and gives you a chance at a 'dry run.' If things work out the way you hope, you can extend the agreement to a reasonable period for finding a house.
I hope this makes you feel a little bit better about signing the Buyer Representation Agreement. It really does provide you the most protection as you begin your home search.
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