Why Do I Have To Sign A Buyer Broker Agreement And What Does It Mean To Me?

If you contact a REALTOR to see a property or properties, the REALTOR is legally required to have you sign an agreement for representation (Buyer Broker Agreement) before showing you a property. A listing agent can show you a property that they have listed, but cannot discuss the price or any offer details unless they sign an agreement to represent you. Without this agreement, the REALTOR cannot be paid.

The agreement will detail the obligations of the REALTOR and your obligations, including responsibility for compensating your REALTOR should you purchase a property.

Here are some things that you should know:

• REALTOR compensation is negotiable. Be sure to read the agreement before you sign so you know your obligations.

• Sellers can still offer compensation to your REALTOR when you buy a property. My experience is that most sellers will still compensate the buyer’s REALTOR. If the seller compensates your REALTOR the full amount you agree to in your Buyer Broker Agreement, you will not be responsible for any further compensation. If the seller offers partial compensation, you are responsible for compensating your REALTOR for the remaining balance.

• The compensation for your REALTOR is part of the negotiation process with the seller when you submit an offer.

• There are multiple Buyer Broker Agreements we can choose from. If we haven’t built a relationship and trust yet, we can use a form that doesn’t lock you into a long-term commitment.

• A word of caution…pay attention to what you are signing, and once you have signed an agreement, do not contact other REALTORS. Always contact the REALTOR with whom you signed the agreement, unless the agreement has expired and you do not intend to renew with that REALTOR. Also, if you wish to purchase a property the REALTOR showed you, be sure the protection period has expired before contacting a different REALTOR to make an offer.

  If you are a buyer and have concerns about being able to afford to compensate your REALTOR or do not understand how compensation works, do not panic. I will walk you through it, explain all the possibilities, and help you negotiate compensation into your purchase.

More than ever, you should treat hiring your real estate agent like conducting a job interview. When searching for a REALTOR, ask questions about their compensation, their services, and the written agreements you will need to enter with them.