Buyer Broker Agreements: What, How and Why
At MikkiMoves, we pride ourselves on our attentiveness to our clients and our commitment to providing a smooth transaction and outstanding experience.
We need to know who our clients are, and to set the expectations and understanding between Buyer and Agent, we ask that all of our Buyers sign a Buyer Broker Agreement. Ask for your sample copy today.
For most transactions, there is no additional fee, as the Seller’s agent will pay your Buyer Agent at the close of escrow. The Buyer Broker Agreement also allows us additional unique ways to work for you. We can literally go knock on doors of suitable houses not for sale, and advertise for your needs on our website and in networking meetings.
In the event a private transaction comes together, your agent eventually will need to be paid. We work hard to negotiate with the Seller to pay your fees, in which case, there would still be no additional charge for you.
Buyer Broker Agreements are a Good Idea
Here are a few reasons why we use Buyer Broker Agreements:
- There is a clear understanding of expectations from all parties.
- The Agent is obligated to work hard for you, and knows whom to call first when new properties come into your Agent’s radar.
- You have our service guarantee and can participate in our non-profit collaboration program.
- We can explore more options than what is available on the Multiple Listing Service.
- There is no question of what the agent is supposed to be doing and not doing for you.
- It sets the stage of understanding for tasks and duties to be performed by Buyer and Broker or Agent.
Meet with your agent, who can go over the agreement with you and answer your questions.
Then get busy shopping for your new home or investment!
Q & A for Consumers
MikkiMoves uses the California Association of Realtors ® (C.A.R.) Buyer Representation Agreements. Here are some common frequently asked questions about the agreements:
What is the Buyer Representation form (BRE) and what does it do?
The Buyer Representation Agreement is an agreement between a potential buyer of real property and a real estate broker. The agreement has three key features. First, it defines the scope of the tasks and duties to be performed by buyer and broker. Second, it provides a written consent to a dual agency if one develops. Third, it places a limit on the time within which a legal action can be brought against the broker.
How will buyers benefit from using any of the above forms?
Surveys have shown that one of the biggest sources of problems is lack of communication between the agent and his or her client. By putting the duties and obligations in writing, buyers will be more informed about the broker’s responsibilities early in the transaction.
The forms also identify tasks and services the broker will do as well as what type of services in a transaction may be performed by others. With this knowledge, buyers will be able to discuss or negotiate the terms of the relationship.
Also, by having the opportunity to discuss and consent to potential dual agency early in the relationship, buyers can consider this question and avoid an awkward surprise about this issue later in the relationship. By bringing more clarity and certainty to the relationship between buyer and broker, neither becomes dependent upon the other’s memory for establishing its terms.
The agreement commits the buyer to a single broker for the transaction. It is exclusive and irrevocable. Even if a buyer enters into another agreement with another broker, or uses another broker without the benefit of an agreement, if the buyer acquires the property identified in the agreement the buyer may still owe the broker compensation.
If unhappy with your agent after signing a Buyer Broker Agreement, you can “fire” your MikkiMoves Agent. We have a service guarantee, and if for any reason you are unhappy after alerting your agent about your unhappiness to allow time for correction, then we would release you from the contract with a cancellation form.
Must a buyer sign one of these forms before working with a particular broker or real estate salesperson?
While written agreements of this type are not required by law, in any professional relationship for services, it is good to have a written document so all parties have the same expectations. Some real estate offices may require one of these agreements, but that will be up to the brokerage firm. In the past, most brokers did not use these types of agreements because either the agreements were not available or those that were available did not meet the brokers and client’s mutual needs.
Why do the forms have a two-year limitation on the time to bring legal action against the broker?
Many agreements that individuals enter into have limitations of one sort or another. The drafters of these standard forms, the California Association of REALTORS®, believed that the two-year limitation is reasonable for a number of reasons. First, two years gives a buyer adequate time to make a decision about such important matters. Second, the California legislature has already statutorily recognized the two-year time frame as a reasonable period of time for a buyer to bring legal action against a real estate licensee. These contracts provide some consistency with that state law. Of course, the limitation would not apply to actual and intentional fraud.
Many terms are used to describe various relationships that may occur in a real estate transaction. The following questions and answers are designed to help clarify several of these terms.
What is agency?
Agency is a legal relationship that is established between a principal (buyer or seller) and an agent (real estate broker) where the agent represents the principal in dealings with third parties. The relationship requires the mutual consent of both principal and agent.
What is the difference between single agency and dual agency?
In single agency, the broker represents only one of the principals (buyer or seller). In dual agency, the broker represents both buyer and seller in the same transaction. In the real estate industry, even if one salesperson in an office is working with a buyer and another salesperson in the same office is working with the seller, the broker of the real estate firm is considered a dual agent.
What is a buyer’s broker?
The term “buyer’s broker” is often use to describe a broker working with a buyer under a written contract that provides compensation.
April 9, 1999 Copyright © 1999 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) All rights reserved. Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R. Legal Department. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. The information contained herein is believed accurate as of April 9, 1999. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.