You've decided to buy a home. You've called a real estate agent that a friend referred you to. You meet this agent at their office prior to going out to see some homes, and as you sit down at the table to talk, you notice this form lying there. What starts running through your mind? "Why do I need to sign anything"? "I don't think I'm ready to commit to anything yet"? Uncertainty? Curiosity?
The form you're seeing is most likely a Buyers Representation Agreement. This agreement explains what an agent's duties are to "customers" and to "clients". This is an important distinction! An agent's customers include individuals in a real estate transaction not represented by said agent, while the client is the person the agent is representing. In Tennessee, agency relationships must be in writing. If you haven't signed a Buyers Representation Agreement, the person showing you homes is not your agent.
Don't you want an agent to provide you with their knowledge of the current market and not just be a "door opener"? Without this signed agreement, you aren't able to take advantage of all your agent can do for you. For example, without an agency agreement, they can only provide you with information that is a matter of public record and you must request it.
With an agency agreement in place, agents are bound to be loyal to you and your interests and to be obedient to your lawful instruction. As your agent, they become your fiduciary. They are then able to answer questions through the negotiation process, and advise you on steps and procedures required to get you through the entire process to a successful closing. These are not duties that are provided to customers, only clients.
Agency agreements are for an agreed upon time period and spells out clearly what each party is obligated to do. One of your obligations as the client is to make your purchase through your agent, only. However, if you don't end up buying a home at all, don't worry, you don't owe them anything. You will have had the assurance that you've had someone looking out for your interests along the way.
Buyers Representation Agreements are for your benefit, as a buyer. They should provide you with comfort, not fear. Comfort that you have a professional in your corner, constantly looking out for you. Read the agreement, and ask questions about anything that is unclear. Your agent should be comfortable to discuss the details with you. Don't limit an agent's ability to provide you with all the benefits they offer. Become a team with your agent, and let them navigate for you through the homebuying journey.
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