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If you’re reading this blog chances are that you’re knee deep into your home selling or purchasing journey and looking for more information to help lead you to the right decision.
One term you may be confused about is the ‘buyer agency agreement’ and this blog will walk you through the ins and outs of this real estate partnership.
What is a buyer agency agreement form?
A buyer’s agent is someone who represents you as the home buyer. This person will guide you through the complexities of buying a home.
A key (and legal) aspect to this partnership is the buyer agency agreement, also referred to as a buyer-broker agreement or buyer representation agreement, outlines the terms of your working relationship, including:
- The agent’s responsibilities
- The length of the agreement
- The agent’s commission from the sale
How does a buyer agency agreement work?
So what does it mean to sign this agreement?
When you sign the buyer agency agreement, you’re entering into a legal agreement to let this agent list your property until you sell the property or the contract length runs up.
If you end up selling your home, the agent will earn the commission you agreed upon based on the sale price of the home.
Protip: You can always negotiate your real estate commission, but they generally run about 5%, 3%, and 1.5% of the total home price.1
How long does a buyer agency agreement last?
Every scenario is different, but generally the buyer agency agreement lasts for at least 90 days.
Some will last up to a year, but remember – you can always negotiate this up front.
What types of buyer agency agreements are there?
There are different names of the buyer agency agreement, but what’s important to understand is the distinction between the types of arrangements: exclusivity.
Your agreement will either be an exclusive buyer agency agreement or a nonexclusive buyer agency agreement.
Here’s what sets them apart.
Exclusive buyer agency agreement
The most common buyer agency agreement is the exclusive buyer agency agreement.
This is a legal contract that binds you as a home buyer to work only with the realtor you signed on with.
If you sign this document, you agree that you will not work with different agents.
Nonexclusive Buyer Agency Agreement
Quite the opposite of the above, a nonexclusive buyer agency agreement permits you to work with multiple real estate professionals when buying or selling your home.
There are two types of nonexclusive buyer agency agreements: right-to-represent and not-for-compensation.
A right-to-represent contract states that your agent will be paid if they recommend a house to you or they represent you during the process.
On the other hand, a not-for-compensation contract means the real estate professional will represent you but they are fully aware that they will not be paid.
What is dual agency in buyer agency agreements?
Maybe you’ve run across the term dual agency.
This is rare, but it does happen and it’s good to know in case you see this in written agreements.
Dual agency is a written contract that refers to brokerage being able to serve on behalf of the buyer and the seller.
In this case, the brokerage is a dual agent— serving on either side of the transaction.
The majority of real estate transactions will indeed involve real estate agents negotiating for the best purchase price, brokerage fees, and broker compensation on their side, sometimes the commission will not be split by multiple real estate agents.
How do I cancel a new buyer agency agreement?
Are you wondering how to get out of an exclusive buyer agency agreement?
It’s important to know your options.
Not every relationship goes as planned and if you find that you aren’t happy with the service or performance of your real estate agent or vice versa, you can let them know that you’d like to terminate your buyer agency agreement.
This can be done in one of two ways.
First, you can simply wait until the contract runs out of time. If you signed on for 90 days, you can wait until 90 days have passed and let the contract naturally expire.
Or, you can provide written notice that you’d like to end the contract.
Of course, it’s up to the other party to agree to the terms and sign a termination agreement.
How can PandaDoc help me create a new buyer agency agreement form?
Whether you’re a buyer, seller, or agent – having a written legal agreement in place will help if, in the rare instance you need it, to take legal action.
Here’s how easy it is to create one using PandaDoc.
- Log into PandaDoc or start a free account.
- Select an existing template from the PandaDoc template gallery, upload an existing contract to edit, or create a new template from scratch.
- Update the necessary fields to reflect the specifics of your buyer agency agreement, including contract length, compensation, dual agency, duties and responsibilities, and more.
- Assign an appropriate workflow for the document and designate a signing order.
- Create an approval workflow if one one or more people sign off on the documents.
- Use PandaDoc to create an Audit Trail so you can easily monitor when your document is opened, viewed, and completed.
- Use PandaDoc’s redlining function to collaborate on documents and edit in real-time so both parties are on the same page before signing the contract.
- Collect e-signatures from all parties.
- Store your documents for easy retrieval within PandaDoc.
If you’re ready to start creating your buyer agency agreement using PandaDoc, start your free trial today.
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.
