Buyer’s Representation Agreement
An agent typically works with a buyer for several weeks to a few months, sometimes longer. They do a variety of things, including:
- Introducing the buyer to lenders and helping obtain preapproval letters
- Finding listings that fit the buyer’s requirements
- Call listing agents to determine availability
- Making appointments with sellers to view the home
- Driving the buyer to houses to tour
- Researching comparable sales for buyers
Often, an agent might ask for a buyer’s representation agreement.
What is a buyer’s representation agreement?
A buyer’s representation agreement, also known as a buyers broker agreement, is an employment contract. Typically, they are bilateral contracts. It spells out the duties and responsibilities of the realtor to the prospective buyer and vice versa. If a buyer or agent doesn’t perform their duties, the other party may have the right to exit the working relationship.
Should you sign a buyer’s representation agreement?
Buyers may be apprehensive about the idea of signing an agreement. No one wants to be stuck with an agent they don’t work well with. Before signing an agreement, meet the agent first and get the know them. Additionally, there are a few other precautions you can take to ensure you are more comfortable.
Ask for short term
Typically, an agent might request a 90-day commitment at a minimum. However, you are free to negotiate. You are free to ask for whatever term you want. 24-hour, seven-day, or 30-day term.
Specify areas and terms
Most agreements will contain a description of the property you are looking for. If you are still unsure of what you want, you can just specify the terms and the area that you are looking for in the contract. This allows you to work with other agents in other areas and/or with different terms.
Before signing an agreement, tell your agent you would prefer to spend a day looking at properties together. Afterward, if you think you can work well together, you will sign the agreement before going out again.
Ask for a guarantee
A guarantee allows agents or buyers to discontinue their relationship if it isn’t working out or if your personalities clash. This way, you aren’t stuck with someone who you don’t jive with.