Did you ever have a question you wanted to ask a real estate professional but were afraid or embarrassed to do so? Or maybe you did ask but received a glossy response that didn’t really answer your question. We try to provide candid answers to questions folks have brought to our attention.
Why would I want to sign a Buyer’s Representation Agreement? Signing stuff before I’ve found a house makes me nervous.
The key word is representation. Without a buyer’s rep agreement, you are in a ‘customer’ relationship with an agent. While this does require agents to provide a minimum level of duties to you — assist you in finding a house, properly take care of the money, inform you of any ‘adverse material facts’ (bad stuff) about a house — it doesn’t provide some of the critical ingredients in any real estate transaction. Two of these ingredients are confidentiality and the requirement to always act in your best interest — act as your ‘agent’ in a ‘client’ relationship.
For example, let’s say you’ve told an agent you’re willing to spend $600,000 on a particular house, but you want to make an offer of $585,000. If you are in a customer relationship with an agent — no Buyer’s Rep Agreement — they have no obligation to keep your true price to themselves. And as it may be in their best interest for the deal to come together … you can see where I’m going with this. However, if you have a client relationship with an agent — you have signed a Buyer’s Rep Agreement — not only must the agent keep your true price confidential, they are required by law to promote your best interests and to negotiate for what’s best for you.
A secondary reason to sign a Buyer’s Representation Agreement is to show your level of commitment to the agent you’ve agreed to work with. If you choose the right agent, this commitment to her will ensure she will do her utmost to help you find your perfect home and negotiate on your behalf.
