If you are a real estate buyer in Pennsylvania, eventually you will probably come face to face with a REALTOR.  You may be confused by the papers that are put in front of you and that you are asked to sign.

Many buyers that I speak with have been to see other agents in the past.  One of the first questions I always ask is whether they have previously signed an agreement to work with any other agent.  It's remarkable to me that many of these buyers don't know what they signed in the past, what they have obligated themselves to, or when those agreements expire.

There are two important, but totally separate documents that buyers are exposed to.  The first is the Consumer Notice, which is required by the Pennsylvania Real Estate Commission to be shown to prospects by real estate licensees.

The Consumer Notice explains that real estate agents are not necessarily working for tha buyer.  They may represent a buyer, a seller, both, or neither.  The notice goes on to explain the duties of the agent in each of these situations, and notes that information given to the agent is not necessarily confidential unless and until the agent is actually representing the buyer.  The buyer is asked to sign that they received this information, and the licensee (agent) is responsible for keeping the notices on file for the state.

The second document is called the Business Relationship Between Broker and Buyer.  This document can be modified so that the agent is or is not representing the buyer for a certain period of time.  If the agreement is for the agent to represent the buyer, the  agreement is commonly known as a Buyer Agency Agreement.  A buyer, or prospective buyer, is under no obligation to sign a buyer agency agreement.  But should you sign one?

My recommendation is to sign a Buyer Agency agreement - but only with a REALTOR whom you like and trust!  There are great advantages in having a real estate agent working on your behalf and for your interests.  However, it is a binding agreement, and should only be done if you are serious about buying a home.  It doesn't require you to purchase a home - just that you will work with a particular broker if you do purchase a home during the time period.

One great advantage in being represented is that the agent knows that you will continue to work with him or her even if a particular house is wrong for you.  This means that the agent has absolutely no motive not to tell you everything, both good and bad, that they can find out about about each property.

A Buyer Agent will also keep your negotiating position confidential, which would not necessarily be the case if you were negotiating with an agent not representing you.  Your buyer agent will have a fiduciary responsibility to you.

Long story short - pay attention to what you are asked to sign, and understand what is involved.   If you do sign an agreement to work exclusively with one agent, and then have a different agent write up an offer to purchase a home, you could end up owing someone a commission that would otherwise have been covered by the seller.

©BrianSchulman2008