WHAT IS A BUYER REP AGREEMENT?
Buying a home is likely the largest purchase you will ever make. Sure, you can do it on your own, but it can be a risky move to make without a Realtor®. So take the stress off – let a Realtor® guide you through the process and avoid the pitfalls of going it alone!
When you choose a Realtor® you should ask about signing a Buyer Representation Agreement, or “BRA” for short. Although it’s not a mandatory document to sign, it’s a good idea to make sure you know what you’re getting with that Realtor®! Here are some things that a Buyer Representation Agreement covers:
1) A BRA defines the relationship between the buyer (you) and the real estate brokerage that is working on your behalf. It sets out the property type that your Realtor® is going to help you find, and the geographic location you’ll be looking in. This is important so that everyone is on the same page with what the ultimate goal is going to be!
2) The BRA lists the services to be provided and how much commission the Realtor® will be receiving when the purchase is complete. When you purchase a home, the Seller typically pays all of the commissions from the proceeds of their home sale, but it’s something you will want to know in advance.
3) This document also confirms that you are agreeing to work exclusively with one Realtor® for a designated period of time as you look for your new home. As a client, the brokerage has a special responsibility to follow your instructions, protect your confidential information and promote and protect your best interests. This includes a full commitment to find you a home while ensuring your priorities are put ahead of others including the Sellers and Listing Agents. This is all laid out in writing for everyone’s benefit.
If you’re not comfortable with signing a Buyer Representation Agreement, you can enter into a Customer Service Agreement (CSA) with the brokerage instead. In this scenario, the obligations of the brokerage will be different. While they will still help you buy or sell a home, they won’t have the same level of responsibility to you as they would if you were a client.
For example, the Realtor® would still show you properties and help you fill out paperwork, but they wouldn’t necessarily provide advice. While the brokerage will have less of a commitment to you, so will you to the brokerage. Typically, CSAs are not legally-binding contracts.
Think of it as the BRA is a wedding band, while a CSA is a promise ring. The level of commitment from both parties will be less with a CSA. Regardless of whether you sign a BRA or CSA, the brokerage will still have to act fairly, honestly and with integrity to provide conscientious and competent service. Keep in mind, a brokerage can choose to decline your business if you choose not to enter into a full Buyer Rep Agreement.
Above all else, it’s important to determine whether the brokerage and the Realtor® are the right match for you. No two are the same! To avoid misunderstandings later on, don’t make any assumptions and be sure to list all the details in writing. If you’re unsure about something, ask questions. WE ARE HERE TO HELP YOU!