Profile picture for Jmbeebe0722

Does A Buyer's Agency Agreement Commit Me to Buying a Home?

We have currently started looking at our first home to see what is available. We have the funds to do so, and if we find the right home we plan to pursue purchasing. We have been out looking once with a "buyer's agency" and she would like us to sign a "Buyer's Agency Agreement".

I like the lady, and have no problem doing so, I just want be sure if we decide to wait or don't purchase within the contract term would it be a breach on contract? Or is this just to say if I do purchase, we would use her?







  • October 21 2013 - Saint Louis
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Answers (15)

Profile picture for Ask Cathy
You should definitely enter into Buyer Agency Agreement. Think of it as a  "loyalty" agreement.  The real estate agent is  promising to perform a service for you and in return you will be loyal to them so they receive compensation at the end of the transaction.  Agents are technically  representing the seller's interest unless the agent enters into a Buyer's Agency Agreement.

 All of the real estate agents fiduciary responsibility is  now for the buyer.  Signing the agreement does not require you to buy anything. It just holds the real estate agent accountable to you and no other parties involved in a transaction. So that you can get the best house for the lowest price possible.

 
  • March 10
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If you like her and wish to hire her, by all means enter into a Buyer Agency Agreement.  Of course, make sure that you understand the agreement and what is in it.  This by no way obligates you to purchase a property.  Consider it a type of "loyalty" agreement.  A Realtor promises to perform a service for you and in return you will be loyal to them in order that they receive compensation by securing a real estate transaction through them.  As a Realtor in the state of Missouri, technically we are suppose to be representing the seller's interest unless we have entered into a Buyer's Agency Agreement with a potential buyer.  At that moment the buyer goes from being a customer to a client.  All of the Realtor's fiduciary responsibility is to the buyer.  Again, signing the agreement does not require you to buy.  It basically lays out the length of the agreement, any additional compensation or fees, type of property being sought and ensures they receive compensation from the Seller if buyer chooses to purchase a property.  As always, if their are questions regarding the legalities of this type of an agreement, you should contact a lawyer.
  • October 31 2013
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Profile picture for JoshBarnettREIB
Every contract is different, seek the advise of an attorney if what she has explained is causing doubt.  
  • October 22 2013
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When you sign a buyers agency agreement go over every detail before you sign it.  Most buyers agent agreements are pretty simple.

They state the parties involved.  The length of time the agreement will be effective.  The agreement that if you buy a home during the life of the agreement and DO NOT use the real estate agent named in the contract you might owe them a full commission.

Some agreements are written just for a specific house, or a specific day.

If you are looking at multiple houses it is better to use a length of time rather than complete a new agreement for every house.
  • October 22 2013
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Yes, Jmbb, it's just to say that if you do purchase, you would use her.

All the best,
  • October 21 2013
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Profile picture for Dunes ..
Can't you read it and decide if "decide to wait or don't purchase within the contract term would it be a breach on contract? Or is this just to say if I do purchase, we would use her?"
Is it that complicated?

You are hiring services...negotiating services and cost
Nothing wrong with saying I'm not signing if that is in there or gotta change that or or or...they can agree or not and you can agree or not
Protect your interest and goals, it's your business transaction..a huge one.
Agent selection is important, EVERYTHING you sign is important
Especially a commitment to Services or cost

This is business not "I like the lady"..don't fully understand or agree
DO NOT SIGN..Shop Smart

Best of luck and happy hunting
  • October 21 2013
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Profile picture for wetdawgs
I would read the contract extremely carefully.  Get clarity on all items where you aren't sure. 

How long a period does it cover?   Sometimes it is for homes for that day, sometimes it is six months or longer (or anywhere in between)

What obligations do you have?  Do you have to pay upfront fees such as Craig describes?  (I wouldn't, but you have to make the decision for yourself). 

In our experience of purchasing several homes, a buyer's agent earns my business (and hence their commission) by their stellar performance and not by a document I have to sign before they start to work for me.     It isn't simply a matter of liking or not liking the person, but whether or not they can perform the buyer's services you need/expect.

  • October 21 2013
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Normally when I do a agency agreement is is only for the homes I am showing the buyer that day. I would need to see the agreement to give you a better answer.
  • October 21 2013
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Profile picture for SoCal Engr
"Also I typically charge buyers between $600-$1500 depending on the price point of the properties up front to cover some expenses related to showing property, drafting contracts etc..  but credit the funds back at closing."

And, if the buyer doesn't close on a property? C'est la vie? Hasta la vista, up-front-funds?
  • October 21 2013
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Profile picture for craigfial

More agents should use Buyer Agency Agreements since it protects all parties.  The benefit to the buyer is the Agency Relationship.  The client is represented by the agent that was hired.  If a seller hires an agent to sell their property, that's who their loyalty lies.  An agent that represents both seller and buyer can act as a transactional agent, but where does their loyalty begin and end?

Buyers that work with agents without an agreement are may not be properly represented.  Single Agency is the strongest relationship you can have with a client.

It does not require you to purchase anything, but in the event event you purchase a home without your agent, you would likely be charged whatever commission would have been earned or what's listed in the agreement.

Also I typically charge buyers between $600-$1500 depending on the price point of the properties up front to cover some expenses related to showing property, drafting contracts etc..  but credit the funds back at closing.

  • October 21 2013
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Profile picture for Brown Buford Team

Make sure you read it.  Typically it just commits you to that agent in the case you do purchase a home.

  • October 21 2013
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No it does not, read it over but in no state does it say you have to actually buy a home. Now if you look at a home with that agent then change agents and end up going back and buying it you may have to pay the former agent the fee so make sure you read the contract before you sign...
  • October 21 2013
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Profile picture for SoCal Engr
Read the agreement. No one can force you to buy a house. But, you may sign an agreement that commits you to a minimum level of compensation to the REA, against the possibility that you do not buy.

I'm not saying this is a given, but read the agreement and know what the conditions are - including under what conditions you may unilaterally terminate the agreement.
  • October 21 2013
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Hi
The buyers agency agreement is an agreement of loyalty that says you will
be loyal while you are looking to buy a home to that agent and should you find one you want to purchase you will have your agent be with you until the end of the sale. It is you hiring them and they will get paid if you should buy. You can choose how long you want to try this out together (you write this in the contract) and to see if you and the agent work well and if they can find you a home. It is also a agreement of loyalty from the agent to you that they will work very hard for you to find your dream home and look out for your best interests.
Christine

  • October 21 2013
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In most states (not sure of MO) the buyers agency agreement doesn't legally bind you to use the agent. In most states there's a separate document often called the 'buyers representation agreement' (or something similar). This is the document which compels you to use the agent IF you decide to purchase a home during the duration of the document.

No agreement forces you to buy a home should you opt to not purchase a home.
  • October 21 2013
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