I have gotten to the point now where I just won’t show homes to a buyer without them signing a Buyer’s Representation Agreement. When I explain this to people, I often hit an objection that sounds something like, “Well I am not going to sign anything that locks me into something!” I totally understand. The problem, of course, is that someone likely told them to beware of those tricky Realtors, or they had a bad experience with someone else in the past, or they are just uneducated about the Agreement. More often than not, it is the latter. So, in this post, I hope to educate about the Agreement, convince you that signing a Buyer’s Rep protects you, and show you how you will get better service by signing one.
The Buyer’s Representation Agreement
Many people believe that the Buyer’s Representation Agreement is an all-encompassing document that forces them to use a particular Realtor for the rest of their lives. Ok, so that’s a little dramatic, but it tends to be pretty close to the truth. So, let’s break down the agreement and show how easily it can be customized to serve you better.
In essence, the Buyer’s Representation Agreement is a simple form that says Buyer will be represented by Broker for the purchase or lease of real estate. It lays out compensation guidelines, areas, dates, and a bunch of other legalese. The part to pay attention to is that you, as the purchaser, can limit the scope of the agreement to an exact property or a certain date, or both. So, you aren’t locking anything in forever. For instance, let’s say you are out driving and see a home that you want to look at. You call an agent and set an appointment. When signing the agreement, you can make it show that it is only for that home and only for that day. Easy as that.
Now, here’s why you should do that…
Customer vs. Client
I am going to say this several times throughout this post, but the main reason to sign a Buyer’s Rep is that it makes you the agent’s client. If you don’t sign one, you are just a customer. What’s the difference, you ask? Everything!
As a customer, the agent has no fiduciary duty to you. As a client, they do. As a client, the agent is required to operate, negotiate, disclose and otherwise work on your behalf. As a customer, especially if they are showing their own listing, they owe that fiduciary duty to the Seller.
Benefits of Signing The Buyer’s Representation Agreement
Obviously, the fiduciary duty is the big one! Really, when you break it down, that should be the only one, but there are others.
1) You get the full attention, care, accountability, and disclosure of an agent because they know they are dealing with a client.
2) You get your best interests serviced at all times during search, negotiation, closing and beyond.
3) You get a better idea of the scope of services the broker/agent owes you as a client.
4) There is a greater peace of mind that you have an expert on your side making sure that your needs are going to be met.
5) Your overall level of satisfaction with the home buying process will be increased because you will have little or no doubt that you made the right decision and got the best deal.
So that’s not scary, right? It actually works to your benefit and makes for a better home buying experience. So, forget what you’ve heard, take a look at the Buyer’s Representation Agreement, set it up so it best serves you, and get the protection and service you deserve. All that from two pieces of paper!
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