Have you ever gone to an open house and wondered why the real estate agent hosting the open house asked if you were working with a Realtor®?  Just like sellers sign an agreement with an agent and the agent’s brokerage to sell a home, buyers can sign an agreement with a Realtor® who is helping them find a home.  If another Realtor® interferes in the relationship between the buyer and the Realtor® who has a signed contract with the buyer, it may violate the contract.

Why sign a buyer’s agent agreement?

If you are interested in buying a home, then you may have met with several agents.  You can interview them and decide which agent is right for you.  Once buyers have established a relationship with a Realtor® and start looking at homes, the Realtor® may have the buyers sign a buyer’s agent agreement. Although laws vary by location, in Virginia it is required that a buyer’s agent agreement be in place.

This agreement outlines a length of time that the buyers and Realtor® will work together.  While every contract can be different, the most common items included in a buyer’s agent agreement include:

  • Length of time the contract is valid:  This outlines how long the buyers and agents will work together to find a home.
  • Termination Rights:  This part explains how buyers or Realtors® can end their working relationship if either group is not satisfied with the relationship.  It is important to read this part carefully because it outlines what can and cannot allow the buyers or a Realtor® exit the contract.
  • Buyer Exclusivity:  There can be two types of contracts.  Exclusivity means that the buyers agree to work solely with the Realtor®  or brokerage to purchase a home.  This means that another real estate agent cannot be used to purchase a home.  Non exclusive contracts would permit the buyer to work with other agents.
  • Agent Responsibilities:  This section will outline the responsibilities of the real estate agent.  This would include things like scheduling and showing buyers homes, always representing the buyers best interests, and negotiating offers.

Why are there buyer’s agent agreements?

Realtors® work on commission.  This means that they don’t get paid until a home is sold.  If a buyer that a Realtor® has been working with for months suddenly uses another agent to purchase a home, all the time and effort the first agent put into the clients is lost.  This isn’t to imply that buyers have to stick with the first agent they speak with or an agent that they aren’t comfortable working with; buyers should only sign a buyer’s agent agreement with a Realtor® they want on their team.

What if the buyer breaks the contract and purchases a home with another agent’s help?

If a buyer doesn’t follow through with the termination terms on the contract and decides to use another real estate agent to purchase a home, the buyer can still purchase the home.  However, the commission from the purchase of the home will still be owed to the original agent in the contract.  Buyers may still have to pay the commission to the new agent too.

What does this all mean?

If you are searching for a home in Locust Grove or the surrounding area, the Realtor® that you work with will ask you to sign a buyer’s agent agreement. Before you sign, make sure that you feel comfortable working with the agent and that you read the agreement carefully. The reason you hear agents ask if you are already working with a Realtor® is because the agents don’t want to put themselves in a situation where a buyer’s agent agreement already exists.

If you are ready to start searching for homes in Locust Grove, I am here to help. Whether you need questions answered about a home, want more information about the home buying process, or need an Realtor® to represent you, contact me when you are ready!