If you’re planning to buy a new home, chances are you are also planning to hire an agent to represent you. Most home buyers use a buyer’s agent to support at least part of their home-buying process. However, there are exceptions when buyers either prefer to contract real estate attorneys to represent them or have enough industry knowledge to handle the process themselves.
Buyer’s agents offer specialized advice and support during some of the largest financial dealings people encounter. When purchasing a home, it is advantageous to have a seasoned expert advocating solely for your interests, rather than the seller’s, throughout the process. (Conversely, sellers typically engage a listing agent to represent their position in the transaction.)
New standards are emerging on how agents interact with consumers, including a requirement for buyers to sign a legal agreement with a buyer’s agent that lays out the terms of the relationship. This agreement is commonly referred to as a Buyer’s Agreement, and there are various versions of these agreements that you may encounter during your home-buying process. Here’s an overview of the main types.
The Buyer’s Agreement
When you are ready to hire a real estate agent to represent you in a home purchase, you should enter into either an exclusive or non-exclusive buyer’s agreement with the agent. This agreement should clearly define the services that your agent will perform for you, as well as their compensation.
The Buyer agreement also creates an “agency” relationship between you and your agent. This means that the agent is obligated to provide guidance and support on your behalf throughout the agreement period. In essence, the buyer’s agent exclusively represents you, not the seller, in the real estate transaction.
Due Diligence Before you Sign an Exclusive Buyer Agreement
Prior to entering into an exclusive buyer agreement, make sure you are comfortable with your selected agent. Do your research to ensure there is a good fit. Your agent will be your advisor during one of the most significant purchases you will ever make. Do not sign the agreement unless you are confident that the agent is right for you.
Buyer Agreements Should Include:
- Term of the contract
- Agent duties
- Compensation terms.
- Buyer obligations
Protecting Your Interests
Upon signing a buyer’s agent agreement with your selected agent, the agent is legally bound to prioritize your interests over the seller’s. According to the terms of your agreement, you should be provided with personalized service to meet your specific real estate needs.
A buyer agreement is more than just a formality; it sets the foundation for a successful collaboration with your real estate agent. Please visit our blog and website for more information about real estate and financing.