The BRA is a contract that defines the relationship between a buyer and a real estate brokerage. The term itself, “buyer representation agreement”, sounds intense and may be enough to scare away Buyers! Before running away, it’s important to understand what a BRA is and what it means to sign one.
The Toronto Real Estate Board has done a great job outlining the benefits of signing a BRA (http://www.brafirst.ca):
- It ensures that your Realtor will be committed to finding your home
- It outlines the fiduciary duties of your Realtor (and their brokerage) such as full disclosure of property information, loyalty, and confidentiality, to name a few
- Protection of your interests
- Expert professional advice
- Puts your home criteria must haves in a Buyer Registry Service so Sellers’ agents can contact your Realtor if there is a potential match
Here are some things to be mindful of when signing a BRA:
- It is an exclusive contract, which means you will be obligated to work with that specific brokerage for the duration of the time period outlined. If you decide that you no longer want to work with that specific brokerage, you must terminate the contract before working with another brokerage.
- It outlines the commission payable regardless of what is being offered by the Seller. For example, if the BRA states that the brokerage will be paid 2.5% of the purchase price and you decide to purchase a home that is “For Sale by Owner” where the Seller is offering no commission, you will be responsible for paying the amount outlined in the BRA.
- Pay attention to the duration of the holdover section. If the BRA has expired and you decide to purchase a home that you visited while under contract with the brokerage, you will be responsible for paying the commission outlined in the BRA if it is purchased during the holdover period.
Signing a BRA provides contractual protection and serves as a guarantee in writing, that your Realtor (and their brokerage) will make your home buying needs a top priority. When hiring an agent, find someone that you actually like and can trust, someone who will work hard to help you find your dream home, and will look out for your best interests, not their next commission cheque!