The Buyer Brokerage Agreement
The Buyer Brokerage Agreement or Buyer Agency Agreement is the contractual agreement between the buyer and their agent that covers roles, responsibilities, duties, length of the relationship, and of course, compensation.
Here are the benefits:
- Creates Confidentiality – Your agent will be bound to maintain confidentiality of your financial and personal details.
- Clarifies the Relationship – Not surprisingly, multiple agents often compete for clients. Once you enter into a buyer broker agreement, you eliminate the confusion about who you are working with.
- Ease of Search – Your Buyer’s Agent is responsible for scheduling, facilitating, and administering your search, taking those burdens off your hands.
- A Defined Length of Time – The agreement can be for an hour, the length of one showing, or years. It’s entirely up to you and your agent, but knowing when the relationship terminates is an important protection for the client.
Realtors® and Commissions
There are not hard and fast rules regarding commissions. That said, there is an expectation in the market as to how agents are compensated.
In many cases (but not all), a resale home seller offers a Buyer’s Agent Commission that is paid to the Buyer’s Agent. The compensation offered is stated in the Multiple Listing Service.
Typically, the commission paid to the Buyer’s Agent is stated as a percentage of the sale price, depending on the type and price of the property, but how your agent’s compensation is determined will be disclosed in the Buyer Brokerage Agreement.