A lot of first time buyers are confused about what the Buyer Representation Agreement is and why they have to sign one when they first start working with an agent. They feel they might end up trapped by it or afraid to sign it in case they change their mind or decide they don’t like working with a certain agent and don’t want to commit for a time period whether it be a few weeks or months. Before we have any of our clients sign one we fully explain the purpose of it and how it protects our clients. Here is a breakdown of what a Buyer Representation Agreement is and why it is best that you sign one when you first start working with an agent.
A Buyer Representation Agreement is a written representation agreement between a buyer and Real Estate Brokerage (you, the buyer, choose either Client or Customer Representation). It states very clearly that the company’s legal duty is to ensure the buyers interest are protected and promoted at every possible opportunity.
In other words, under a Buyer Representation Agreement the company MUST ALWAYS put YOUR interest first - able everything else except the law. If you choose to sign a Buyer Customer Service Agreement, then the brokerage only owes you, the buyer, the duties of accounting and honestly.
If you do not wish to be represented under a Representation relationship, the company you choose automatically must work for the Seller during the transaction. It’s either one or the other. Almost every home Seller on the market has already agreed in advance to pay the individual who brings the Buyer and sells their home. In fact, this one of the mandatory conditions of being listed on the MLS system. Since the Seller pays the fees, if the Buyer does not have a Buyer Representation Agreement in place, their Realtor must work for the Seller as a “sub-agent” by law. In a situation like this, although they must be honest and cannot misrepresent facts, your Realtor is actually acting as an agent on behalf of the Seller and must protect their interest instead of yours.
Here’s what happens in this scenario: all information gained about your situation, including what you are willing to spend may be shared with the Seller to enhance his or her negotiating position. It also means that when details are presented to you about the market statistics, the Realtor cannot advices you.
On the other hand, if we work for you under a Buyers Representation Agreement, we owe you full confidentiality and will not tell the Seller anything. It’s our duty to make sure you are fully protected. You will be advised about the true market value of homes and about the best strategy to purchase your ideal home for the best possible price.
The caveat: Not signing a Buyer Representation Agreement may mean you will spend more than you need to, sometimes without even knowing it.
The Buyer Representation Agreement gives the Realtor permission to represent ONLY your interests in the transaction, and it means that you will use that brokerage if you decide to purchase a home during the time period of the agreement. So, the choice is up to you - would you like someone to work for you, or to work against you? Either way, as a Buyer, your Realtor’s services are almost FREE since they get paid by the Seller.
To find out more contact us anytime at Info@wyhomesco.com