Exclusive Right-To-Represent / Exclusive Buyer Agency Agreement/ Exclusive Buyer Broker
This is the most common buyer-broker agreement between homebuyers and brokers. And is our default engagement position. This agreement outlines the obligations of the broker, the broker-agent relationship, and the responsibilities of the buyer.
It binds the buyer to the broker, and the buyer must pay the broker if he buys property during the term of the agreement, even if the buyer locates and arranges to buy the property. Even if the buyer buys property directly from an owner with no broker involved, the buyer still has to pay the exclusive agent a fee.
So the buyer may not retain more than one broker to assist him or her. But if another party pays the broker the commission, the buyer doesn’t have to.
An Exclusive Buyer Agent represents ONLY THE HOME BUYER, in a real estate transaction. They work within a company that never represents sellers and never takes listings, i.e. the possibility of Dual Agency never arises. This business model eliminates the possibility of conflict of interest that exists when one firm attempts to represent both buyer and seller in the same transaction.
Exclusive Buyer Agents will disclose information to the buyer that materially affects a buyer’s best interests, even if that information is detrimental to the seller! The listing agent cannot make such disclosures and must remain loyal to the seller.
So most of the time when a real estate buyer locates a particular property they are interested in, they normally engage an Exclusive Buyer Agency or Exclusive Byer Broker.
- An Exclusive Buyer Agent can provide guidance about how much to offer for a home and share insights that would provide an advantage to the buyer.
- An Exclusive Buyer Agent negotiates exclusively on the buyer’s behalf, seeking the best price and terms for the buyer.
- An Exclusive Buyer Agent works to protect their clients with contractual contingencies, designed with the buyer’s best interests in mind.
In this completely exclusive agency relationship, the buyer is legally bound to pay the agent when the buyer purchases the property described in the contract. This is true even if the buyer finds the property.
Exclusive Agency Buyer Agency Agreement
This agreement makes the broker the exclusive agent of the buyer, but it requires the broker to be paid only if the broker finds the property that the buyer ultimately purchases. If the buyer finds the property and buys it without help from the broker, the buyer owes no fee to the broker.
Nonexclusive right-to-represent contracts/ Open Buyer Agency Agreement
This buyer-broker agreement defines the broker’s responsibilities to the buyer, the relationship between the broker and the agent, and the buyer’s obligations. It provides for compensation to be paid to the broker if the broker proposes the house the buyer decides to buy or otherwise represents the buyer.
If another party pays a commission to the broker, this obligation is removed. Additionally, the buyer is typically able to buy a home through another broker as long as that home was not proposed by the previous broker. Usually, these agreements may not be revoked except for specified reasons.
Nonexclusive not-for-compensation contracts
This type of buyer-broker agreement describes the broker’s duties and obligations to the buyer, generally to be performed by the BROKER’S AGENT. It also outlines the relationship between the agent and the broker and the buyer’s responsibilities.
This contract specifies there is no compensation to be paid to the broker. Other common components include that the buyer can retain more than one brokerage and either party can revoke the contract at any time.
Normally the work process involves
- Helping buyers locate good sources for mortgage loans and assist them in getting pre-approved.
- Map active, under contract, and recently sold properties that meet buyers’ criteria to give them an understanding of the market. The idea is to show buyers in which neighborhoods these properties are located and how fast they sell so that they’re not caught off-guard when they make an offer.
- Make appointments to tour homes and drive buyers to these appointments.
- Advise buyers on the resale potential of the home.
- Help buyers analyze the price and value of a home before making an offer.
- Explain the standard offer form and provide advice on whether they should ask for further contingencies.
- Recommend trusted home inspectors and suggest additional inspections if they feel these are necessary.
- Attend inspection and appraisal tours and assist in interpreting results and negotiating inspection issues.
- Assist in reading necessary documents like agreement, title commitments, etc.
- Assist in coordinating communication between the lender, title officer, seller, and buyer so that there are no surprises at the closing table.
- Monitor loan commitment and ensure buyer doesn’t do anything (like make a large purchase) right before closing that could endanger their funding.
- Assist with the closing process by making sure the buyer has the correct documents and understands what they say.
- Ensure the correct signatures are in the right places.
- Earn between 2 % to 3% commission, depending on their agreement with the seller’s agent. You may ask who pays agent commissions: the buyer or seller? The seller usually pays a commission of 5% to 10%. The fee is then split with the buyer’s agent.