I am looking for a new home. Why should I sign a buyer-broker agreement with my real estate agent?
I have been asked many times by prospective buyers, why do they have to sign an agreement with me to house hunt? Here is my response.
Buyers use real estate brokers & agents to provide a wide range of services that include more than just house hunting, which in and of itself is very labor intensive. Client services also entail negotiating and writing contracts, providing advice and recommendations, researching neighborhoods, working with contractors as well as home and termite inspectors, accompanying buyers on the final walk through and settlement, identifying properties for comparison purposes, and providing information on lenders, contractors and title companies.
Real Estate agents definitely have a lot on their plate and are paid for this work when a transaction occurs, as a result of their efforts. So why, when it comes to signing a form outlining roles and responsibilities for brokers, agents and buyers, do many folks get anxious? I think it is primarily because many people do not understand what a buyer-broker agreement is all about.
It is important to first understand that a buyer-broker agreement is not optional. It is a requirement under Virginia Law, that a broker, when working with a buyer, enter into a written buyer's broker real estate agreement defining the legal relationship. This contract explains the duties and responsibilities of both parties and sets out exactly what services will be provided by the broker. When my husband and I bought our house 22 years ago, we were unaware that our real estate agent was representing the seller. A buyer broker agreement means the broker is representing the buyer not the seller. The agreement sets forth the commission to be paid to the broker, when a sale takes place.
A signed agreement does not have to be a long-term contract. It can be for a month, a week, a day, or even to show a single property. The agreement can also stipulate if your agent is a limited services agent, a standard agent or an independent contractor. The agreement can be exclusive or non-exclusive. There is flexibility in the type of agreement one can sign.
That said, a buyer broker agreement is required and protects both the would be purchaser and the broker and his/her real estate agent.