The Buyers Representation Agreement has become standard practice and very beneficial if used and understood by all parties. Recently, we have heard about buyers signing buyer representation agreements (B.R.A), and ending up in front of a judge! One couple, it turns out; the real estate team the couple contracted with, made a statement of claim to commissions because the couple went off on their own after signing a buyer representation agreement. The couple stated, “we found our own home”! “We went out and found a home and did not need the real estate teams help”. When the judge asked why the couple did not work with the real estate team they first hired… The couple stated, “we found our own home and the Sellers Agent of that home we found on our own, offered us a better benefit. The Seller’s agent would also sell our home for lower costs”.
Know what you are asked to sign
The judge ruled in favor of the real estate team. The judge ordered the couple to pay a sum equal to the amount the team would have earned, had the couple worked with the team to purchase the house.
Lets face the facts, there may be many variables in this situation. Reasons, why the couple dealt directly with the seller’s agent. Reason why the real estate team felt they are owed a fee. However, the real issue becomes, did the couple understand what they were asked to sign? Did the real estate team explain the what if’s? We do not really know the circumstances and level of understanding the couple had, or did not have, before during or after they signed a buyer representation agreement. But here is the take-a-way.
When you are interviewing agents to help with your real estate search, ask these questions;
- How does signing the buyer representation agreement benefit us, the “buyer”?
- If we sign a buyer representation agreement with your company, and we are not happy with your service, can we cancel and hire another agent, without cost or obligation?
- What happens if we purchase one of your company’s listings? Can you represent both the Buyer and Seller you already have under contract? How can you act in both our best interests, does this not cause a conflict of interest?
Listen and clarify answers
If you find, during the question period, the Agent is having difficultly or avoiding providing clear answers to the questions above, or unwilling to explain both the pro and cons of signing the BRA, we recommend respectfully thanking the agent for their time and move on to the next appointment.
The buyer representation agreement has been around since 1995 and has its pros and cons. If you are thinking about making a move, either buying or selling, you need to have a conversation and discussion about representation agreements at the beginning of your search. An agent should be able to explain both pros and cons of being represented. Buying and selling a home can be stressful enough. It is the role of the professional to ensure you, the client is protected. Your understanding of the representation agreements should not be clouded.
Let us know your thoughts. Should one sign or not sign? Do you think there is a buyer benefit, or is it all in the Agents benefit?
Recently published Guide is jam-packed with Money saving Tips. Download our FREE Buyer Guide in less than 5 seconds.