What Is a Buyer Agency Agreement?

When seeking to purchase a property, you may automatically think of employing the services of a real estate agent. A buyer-agency agreement is one that sets very specific and often exclusive terms between yourself and a broker who acts as your agent.

Identification

A buyer-agency agreement establishes that a real estate broker will actively serve as the agent for a party seeking property. In this sense, the broker is obliged to fully understand the concerns, wishes and prerogatives of his clients and to then seek out the ideal property for them. This increases the level of representation available to the buyer by providing stronger agent advocacy.

Types

Exclusive buyer-agency agreements require a broker to be paid even if the ideal property is not located. Exclusive agency-buyer-agency forms do not allow the broker to be paid in all circumstances, but instead stipulate that the broker will be compensated if a purchase is actually completed. Open buyer-agency agreements allow brokers to sign contracts with other buyers as opposed to the "exclusive" relationship provided in the previous two arrangements.

Warnings

As with any legally-binding contract, there are dangers involved. The principle one involved with buyer-agency agreements is that the broker, as agent, is granted certain rights and abilities to represent their clients. You should review the formal content of the agreement to ensure that you are comfortable with its provisions, what it requires of you and the amount of power it assigns your broker.

References

• Go Beyond MLS: Buyer-Agency Agreements