This article should give you a clear and simple explanation of the Buyer Broker Agreement. This article outlines how we represent you and how our compensation works, ensuring transparency from the start. One important point: we will always ask the seller to pay our commission as part of your offer. In many cases, sellers are willing to cover this, which helps reduce your out-of-pocket costs.
The agreement also isn’t rigid. It’s fully negotiable at any point during the process, so if anything needs to be adjusted as we go, we can revisit it together.
Our goal is to make sure you feel comfortable, informed, and supported from start to finish. We’ll walk you through each section, so you know exactly what you’re signing.
What is a buyer’s representative?
Defined most simply, a buyer’s representative is an advocate for the buyer—not the seller—in a real estate transaction. Real estate laws and regulations vary from state to state, but buyer’s representatives usually owe full fiduciary (legal) duties, including loyalty and confidentiality, to their buyer-clients and must act in their clients’ interests throughout the entire transaction.
Why should I use a buyer’s representative?
A buyer’s representative can provide the expertise you need throughout the entire transaction, greatly improving your buying experience and potential results.
Why choose an accredited buyer’s representative?
Not all buyer’s representatives are equal. All REALTORS® (members of the National Association of REALTORS®, or NAR) must subscribe to a strict Code of Ethics, which helps ensure that you will be treated honestly.
But a REALTOR® with the ABR® designation has gone a step further, by completing Accredited Buyer’s Representative (ABR®) training, specialized education offered by the Center for REALTOR® Development (CRD).
In addition to knowing the dynamics of the local market, REALTORS® with the ABR® designation understand the special needs of buyers. They have additional knowledge and experience that take them a step beyond an agent who only concentrates on listing property for sellers. An ABR® can provide you with valued assistance throughout the transaction and help you make informed decisions that can lead to a successful home purchase.
Issues to discuss when choosing a buyer’s representative
Here are some of the most important issues to consider and questions to ask when interviewing prospective buyer’s representatives:
Experience and credentials: How long have you represented buyers? How many homes have you helped buyers purchase?
References: Can you share the names and contact details for three past buyer-clients who can provide references?
Knowledge: What are your areas of specialized knowledge? Which types of housing or neighborhoods do you know best?
Representation: If I hire you, what duties will be owed to me? What representation choices do I have as a buyer?
Services provided: How will you assist me at each stage of the transaction? Do you have a written buyer agreement that details your obligations to me and my obligations to you?
Finding properties: Do you have full access to the multiple listing service (MLS)? The MLS is a broker cooperative that helps listing brokers sell their clients’ homes and helps buyers who are working buyer’s representatives find their homes in an efficient and transparent manner.
Personal support: Will you personally handle all aspects of my transaction, or will I be working with assistants? Who will explain and complete the various forms, agreements, and steps required to reach closing?
Negotiating: Will you counsel me on a negotiating strategy and appropriate contingencies? How will you present my offer to the seller?
Financing: Will you provide guidance on affordability and mortgage options, and choosing a lender? And whether I should consider a mortgage prequalification or preapproval?
Related service providers: Can you supply referrals for providers of other services related to my transaction, including home inspectors, surveyors, movers, and other services?
Compensation: How will you be compensated?
How is a buyer’s representative compensated?
Compensation for buyer representation is negotiable between buyer’s representatives and the consumers they serve. The types of compensation available for buyer’s representatives take multiple forms, depending on these broker–consumer negotiations. Types of compensation include, but are not limited to:
- A fixed-fee commission paid directly by consumers, including the buyer or seller.
- Concession from the seller to the buyer.
- Portion of the listing broker’s compensation.
The seller may not be offering any compensation to the buyer’s broker, either directly or through the listing brokerage, in which case you would be responsible for paying your buyer broker’s compensation.
If you don’t have funds to pay your buyer broker compensation at closing, talk with your buyer’s representative about your options.
Sellers may authorize their listing broker to offer compensation to a buyer broker, expressed as a percentage of the gross sales price or as a flat dollar amount. In some situations, however, the compensation offered by the listing broker is less than what is agreed to in the buyer’s agreement.
If you find a house that you think is the perfect fit for you, but the offer of compensation is less than what is agreed to in the buyer’s agreement, it may be possible for your buyer’s representative to contact the listing broker before viewing the property to see if the listing broker would pay additional compensation to satisfy what is stipulated in the buyer’s agreement.
What’s next?
Once you’ve chosen an ABR®, you can begin working as a team to find and purchase the home you want.
Patrick Allard, Broker/Owner & REALTOR®
Mobile: 908.672.1139
Email: patrick@teamallard.com
Website: www.teamallard.com