Should You Sign a Buyers Representation Agreement

Should You Sign a Buyers Representation Agreement

With the new MLS Rules, all agents must have a Buyer Representation Agreement before showing a client any home ( If agent shows a home without an agreement, they may be fined $500.00 and possibly lose their license ) ,

with a couple of exceptions.

• During and Open House
• Showing the agents own listing

In each of these cases, the agent is considered representing the Seller. If during one of these showings, the buyer wants the agent to help them buy the home, then a Buyer Representation Agreement is required.

Before signing a Buyer Rep Agreement is the time to talk about what the agent will provide.

• Term
  • Do not feel pressured meeting an agent for the 1^st time and sign a long term agreement. The first meeting with a buyer, I have a 1 day agreement. This gives the buyer and me some time to get to know each other. They can see if I am the right fit for them and if their needs are something I confidently help them with.
  • Terms can be for 1 day, a week, 3 months. They also may specify a particular house. Until I get a good working relationship with a buyer, I prefer to keep the terms as short and specific as possible to give buyers time to evaluate my services.
• Fees
  • Fees are Negotiable. ( That is what this whole rule change is about)
    • Fees may be paid from the Sellers contribution to buyer
    • Fees may be paid by Buyer directly to agent
    • Fees can be a percentage of sales price, a flat fee or be defined as al-carte services. Did I say they are negotiable?
  • Area
    • The defined area the agent will cover. Do not sign an agreement with Texas, or other wide geographical boundary. Good example would be N.W. Houston, specific subdivision or Metro area like Cypress, Katy, Woodlands. Can also be defined Zip Codes or School Districts.
  • Services the agent will provide
    • Full service will be more common.
    • Limited services are also an option. Examples are;
      • How many homes will be shown
      • Days of the week and hours agent can be contacted
      • How many offers negotiated
      • Comparable sale information provided

It is critical to sign a Buyers Representation Agreement with ONLY the agent you wish to work with. If you sign multiple agreements, you may be liable to pay an agent who did not write the offer and negotiate the deal a commission.