Have you heard the news? This year, the National Association of Realtors (NAR) has required a written agreement to be in place for realtors to show homes to potential buyers. The idea of signing an agreement before even meeting a realtor can seem alarming to most, and I completely understand that. I’d like to inform my clients of what this means for me, and how I can help you moving forward. Keep reading to get a simple, straightforward breakdown of what a buyer’s agreement means for my business.
WHAT DOES IT MEAN?
A buyer’s agreement sets the terms and conditions between a home-buyer and the real estate agent. The most important pieces of information in a buyer’s agreement outline:
*the buyer’s obligations
*the agent’s duties & compensation
*the length of contract
BUYER’S OBLIGATIONS:
It’s important to note what type of agreement you are signing. Is it exclusive or non-exclusive? An exclusive agreement would mean the buyer cannot work with a different agent during the length of the contract.
By signing an exclusive agreement, the buyer may also be agreeing to not purchase a home WITHOUT an agent. That could look like trying to buy an off-market home without the realtor you signed an agreement with. You would still be responsible for paying their commission as outlined in the agreement.
AGENT’S DUTIES AND COMPENSATION:
The buyer’s agreement doesn’t just give stipulations to the buyers; it also outlines what is to be done by the agent. In this section of the buyer’s agreement, you will get an accurate depiction of how I will work for you and what I promise to give. I, along with many other agents, take my job very seriously. This agreement helps to show just how much I care about serving my clients and doing the best I can for them.
Along with outlining my duties, the agreement will state an agreed upon compensation. This compensation amount is to ONLY be paid if/when you purchase a home. There are important things to note about this: you are agreeing to pay my commission even if the sellers of the home you are buying decline to pay your commission. Additionally, if the contract is breached and the buyer purchases a home with a different agent or without an agent DURING the time of the buyer’s agreement, the commission still must be paid to the agent by the buyer.
LENGTH OF BUYER’S AGREEMENT:
I like to make an initial buyer’s agreement for only one week long. This gives myself and my clients the freedom to make sure we are a good fit going forward. Buying a home is such an important and big life event, we want to make sure that our values and goals align.
If we see one or a couple homes in that first week and decide to move forward together, I typically have you sign a 6-month long buyer’s agreement.
If we go passed that 6 months together, we can decide at that point what would be the appropriate amount of time to re-up the contract for.
Also in the buyer’s agreement will be grounds for terminating the contract. That is an important piece to look over before signing.
BUT I JUST WANT TO LOOK AT ONE HOUSE…
Unfortunately, the NAR specifics that even if you are not sure you want to embark on a full home-buying mission, a contract still must be signed in order to show you any houses, even just one.
Signing a contract can seem extremely intimidating to someone who just wants to look at one house that caught their eye and just might be the one, and I know that! Do not let that deter you from reaching out to me! As stated above, we can do week-long contracts to give you the freedom to decide your next chapter.
WHAT ABOUT OPEN HOUSES?
You can attend open houses without a buyer’s agreement signed.
It’s important for you to know this, in case there are any realtors that are trying to convince you otherwise.
You may attend an open house as an unrepresented buyer, and no, you do not have to sign a buyer’s agreement with the realtor hosting the open house!
STILL CURIOUS?
Here are some articles to check out if you are interested in learning more!
https://www.zillow.com/learn/buyer-agreement/
https://www.housingwire.com/articles/nar-clarifies-details-on-buyer-broker-agreements/
Your friend and Realtor,
Libby Long