A person who is planning on buying a home will usually sign a broker agreement with their real estate agent prior to writing up a purchase agreement. These agreements are designed to explain who is representing the buyer and what the details of this agreement are. There are a number of different buyer-broker agreements that are used throughout the U.S. Some are used more frequently than others. Let’s take a look at some of the most common agreements.
Non-Exclusive, Not for Compensation
This buyer-broker agreement is used to outline the real estate agent’s responsibilities to the buyer that they are representing. Other details will include the agency relationships, the scope of duties for the broker, and the obligations that are placed on the buyer in this agreement. Compensation is not part of this agreement. The buyer retains the right to hire another broker to help them find a new property. The buyer reserves the right to request that a single agency is their only form of representation.
Non-Exclusive, Right to Represent
This is a non-exclusive agreement that is drawn up to describe what the obligations are for the broker on behalf of the buyer. This includes information about relationships within the real estate agency and the scope of the responsibilities for each party. There is no responsibility in place for compensation. A commission will not be needed if the broker is being paid by the seller of a specific property. Buyers often think that they will need to pay a fee when they are in contact with a real estate agent who is representing a property. This is not necessarily the case. A buyer also reserves the right to buy a property from another real estate agent as long as the home is not being sold on behalf of the original agent. The buyer also has the right to request a single agency is involved.
Exclusive, Right to Represent
This agreement is very similar to the non-exclusive option when it comes to major details. The big difference between these two agreements is that the buyer is required to work exclusively with their real estate agent in this type of agreement. The buyer is not allowed to hire more than one broker but they can request single agency from the company that they are choosing to deal with. The commission is negotiable with the agent. If the seller of a home is paying commission to an agent then the buyer is not responsible for these costs.
The Importance of a Buyer-Broker Agreement
These agreements are incredibly important. When first signing up with an agent it might not seem like a big deal to consider all of the specific details that are part of a buyer-broker agreement. However, it is important to think about the future and what might occur down the line. This agreement is designed to protect the buyer and the real estate agent. Without one of these agreements there is a lot of room for error. It’s always best to outline the agreement ahead of time so that everybody knows what is expected of them. These guidelines can be followed throughout the entire process and nobody will fall short in the end when a deal is finally made.
Need more information about buyer-broker agreements, or looking at new homes in San Marcos? Contact The Damron Group REALTORS, a real estate agency in San Marcos, TX, to speak to a professional real estate agent.