The Importance of Buyer Representation Agreements in Real Estate
Note: The following blog on a vitally important topic comes to us by permission of our friends at Greater Chattanooga REALTORS® (GCAR). It recently appeared as a post from GCAR’s 2023 president, Steven Sharpe, ABR, AHWD, C2EX, ePRO, GRI.
In the fast-paced world of real estate, many factors can pose an issue when purchasing property, which is why the role of a buyer’s agent has become more crucial than ever before.
Buyer representation agreements are a win-win proposition for both real estate professionals and consumers. Not only do these agreements help build trust by promoting transparency through up-front and honest conversations, but they also provide clarity regarding services clients can expect to receive, as well as how their real estate professional will be compensated for their time. This transparency is crucial for all parties so that REALTORS® can help educate consumers during one of the biggest and most complex transactions many make in their lifetime.
So what does a Buyer Representation Agreement consist of? Simply put, it’s a legally binding agreement that details many crucial elements of the relationship, such as services, agency relationship and compensation. And, signing one at the beginning of the relationship protects both the broker and the buyer by avoiding misunderstandings.
Discussing the Buyer Representation Agreement helps ensure the homebuyer has a loyal advocate representing them in the transaction, including whether the agent may be serving as a dual agent (someone who acts as both the buyer’s and seller’s agent in a transaction).
While jurisdictions vary in what is required in terms of written agreements when it comes to compensation, most states require that any exclusive brokerage or agency relationship be in writing, and about half of states require written disclosure of an agency relationship in order for the real estate professional to be paid for their services.
To my fellow REALTORS® this is a reminder to make sure to check where you fall in terms of requirements, and check with your REALTOR® association for a buyer representation agreement form, and be sure to explain all provisions of the agreement to a buyer client.
For REALTORS® and individuals who are looking to learn more about the homebuying process, I encourage all to visit www.competition.realtor for infographics, informative articles, and other resources to help facilitate these important conversations during a buyer representation meeting.
Purchasing property can be stressful, but the process is much smoother when everyone is clear on all the details at the beginning of the process. Providing clarity to a complex process is a REALTORS® area of expertise. Whether you’re looking to buy or sell property, utilizing the knowledge of a REALTOR® will help ensure that the process will go as smoothly as possible, and that as a consumer, you are getting the most value from your most important investment. That’s Who We R®.
About EMTAR: Chartered in 1969, our Association’s 1,300+ REALTORS® are a proud part of the 36,000+ members of Tennessee REALTORS® and of the 1.5 million+ members of NAR, all working to serve the public and protect the rights of America’s property owners. EMTAR members are known not only for their unmatched real estate excellence and high ethical standards, but also for being generous, hospitable, others-focused, loyal, hardworking, and eager to help wherever and whenever help is needed.