Oh, the dreaded paperwork that comes with buying a home. Piles upon piles of disclosures, advisories, contracts, and agreements can leave you feeling overwhelmed, especially if you’re uncertain of what they mean.
A buyer agency agreement is one of the papers a home buyer will see in this pile. A buyer agent is someone who assists a home buyer through the exciting but overwhelming terrain of buying a home. So, what’s the purpose of the agreement, and what are the benefits of it?
What is a Buyer Agency Agreement?
A buyer agency agreement, also called a buyer broker agreement, is the written agreement that enables a Realtor to represent the buyer of real estate, and it includes the terms and conditions of this representation. They’re similar to listing agreements, which define the terms and conditions of the relationship between a listing agent and a seller.
The agreement focuses on the main conditions of the representation between the buyer agent and the buyer client. These conditions include the duration of the representation, commission that will be earned and paid, services to be performed, and additional rights. Signing the agreement also means that a buyer is agreeing to be solely represented by the agent.
Buyer agency agreements also outline the specific duties required by both the buyer and the agent during the duration of the agreement. For a buyer, these duties can include acting in good faith, qualifying for the purchase of a home, and considering all homes presented by an agent. For an agent, these duties can include finding properties that align with the wants and needs of a buyer, disclosing all known facts, preparing purchase orders, and performing visual inspections.
What’s the Benefit?
Now that you know what a buyer agency agreement is, it’s important to understand how this agreement is mutually beneficial for both you and an agent.
- You’re covered by the law: Buyer agency agreements legally require an agent to act in the best interest of a buyer.
- Representation is important: Being represented by a professional will help you negotiate the best offer, prevent you from making critical mistakes, and give you someone to act as a buffer when conflicts arise. By working with an agent, you’ll also get access to a network of professionals that they know who can help you with other areas of home buying, such as home inspectors or movers and attorneys.
- You (more than likely) won’t have to pay the commission: A seller typically pays the commission for both the buyer agent and listing agent. It’s not common for a buyer to have to pay this fee.
- You’re not stuck with the initial terms: The terms of a buyer agency agreement are negotiable. This is especially important when it comes to the duration of a contract. If the proposed duration is too long for your liking, you can negotiate a shorter term.
- The agreement is actually with the broker, not the specific agent: If at any time you are just not getting along with the agent, the broker can help you find another that better suits your needs.
A buyer agency agreement sounds intimidating, but it’s something that will be beneficial to both you and an agent. Bittinger Team, REALTORS provides information related to all areas of real estate on BestMichiganHouses.com. Contact us today so we can use our industry experience and knowledge as you begin to search for your new home!