Buyers Agency Agreement
Buyers Agency Agreements? Do you need one in North Carolina?
Yes, if you are going to work with a REALTOR® or licensed agent to represent you.
It is the law. An agent cannot represent you in a real estate transaction without a written agreement.
The North Carolina Association of REALTORS® provides members with a form that describes the relationship and establishes expectations for the parties.
Absent a formal agreement, the default assumption is that the agent is working for the Seller, not for the Buyer.
The Buyer agency agreement serves a valuable purpose for the Buyer. The Buyer becomes a "Client," rather than a "Customer." When the Buyer is a Customer, the Agent's loyalty is with the Seller, and the benefits of advocacy remain with the Seller. We sell to Customers. We consult with Clients, and the legal responsibilities are more detailed in that relationship.
Some folks are hesitant to formally engage an agent for a variety of reasons:
- Sometimes they are afraid they will be tied down to the agent, even if the relationship is just not working. I always give the client, and myself, a "Get Out Of Jail, Free" card. All my Buyer Agency agreements include the provision, "Either party may terminate this agreement at any time prior to location of a suitable property." I want people to be at ease as we work together, and in the client/agent relationship of their free will.
- Some folks do not understand how agents are paid, and that makes them nervous to sign a document. To make it worse, some agents are uncomfortable or inarticulate when it comes to discussing compensation. Agent compensation is dealt with in the agency agreement, but should always be open to conversation. We are fortunate in the Triangle MLS, as Buyer agents typically have no problem collecting co-brokerage fees from listing agents, and this simplifies the compensation conversation.
- Some people just don't like paperwork, and will sacrifice security for convenience. But, for sure, there will be tons more required documentation before a home is bought. Meetings where we are writing offers, discussing purchase terms, and exploring property values are much easier if we don't have to spend valuable time going over a Buyers Agency Agreement that should have been reviewed days or weeks prior.
And I did a 60 Seconds in Real Estate video touching on some of these topics: