When looking to buy a home, you might hear about something called a buyer agency agreement. This document helps outline the relationship between you and your real estate agent. But is it really necessary? Let’s explore what a buyer agency agreement is and how it affects your home search.
What Is a Buyer Agency Agreement?
A buyer agency agreement is a document that a homebuyer signs to work with a real estate agent. This agreement allows a licensed brokerage and a specific agent to represent the buyer in purchasing a home. The agreement explains the agent’s responsibilities, which include helping with the home search, negotiating offers, and managing the closing process. It also details how the agent will get paid if you buy a house.
The specifics of this agreement can change based on the market or the brokerage. However, it confirms your commitment to work with that agent. You can usually negotiate the terms and duration of the agreement, giving both you and the agent some flexibility.
Is a Buyer Agency Agreement Required?
New rules in the real estate industry require a written agreement that explains the agent’s fees before you tour a home. However, unless state law says otherwise, you don’t have to sign an exclusive buyer agency agreement just to look at houses.
Some agents may ask you to sign a full agreement before you can tour homes. This means you would have to work only with that agent for a specific time. Redfin, on the other hand, does not require this.
What If You Don’t Sign a Buyer Agency Agreement?
You can still work with an agent without signing an agreement, but it can lead to problems. Without a signed contract, there might be confusion about what the agent is supposed to do for you. The agent may not prioritize your needs compared to clients who have signed agreements. Additionally, without clear terms, you may run into issues with commission and the agent’s responsibilities down the road.
Buyer Agency Agreement FAQs
Can I Work With More Than One Real Estate Agent?
This depends on the type of buyer agency agreement you sign. If you sign an exclusive agreement, you must work with just that one agent. But with a non-exclusive or open agreement, you can work with multiple agents and only pay the one who helps you buy a home.
What Happens If I Find a Property on My Own?
If you discover a property without your agent’s help, inform them right away. This is especially important if you have an exclusive agreement. Sometimes, your agent may still receive a commission even if you found the home on your own, so clarify this before signing the agreement.
What If I’m Unhappy With My Agent After Signing?
Many agreements include a clause that lets you terminate the contract under certain conditions. Before you sign, check the termination terms to make sure you can leave the agreement without penalties if you’re not happy with your agent. At Redfin, for example, you can cancel your agreement by simply emailing your agent.
Do I Have to Pay the Agent If the Deal Falls Through?
Usually, you don’t owe the agent any commission if the deal falls through, as long as you haven’t broken any terms of the agreement. Make sure to review your contract for any specific rules about this.
Can I Switch Agents If I’m Under Contract?
You can switch agents, but only if your agreement allows it or if you can terminate the current contract. Changing agents while under contract can lead to legal or financial issues, so it’s crucial to understand the termination and exclusivity clauses in your agreement.
Conclusion
A buyer agency agreement can help clarify your relationship with your real estate agent. It’s important to understand what the agreement entails and how it affects your home buying process. If you have any questions about signing an agreement, don’t hesitate to ask your agent for more information.