Why Should I Sign a Buyer Brokerage Agreement ?

 

Doesn’t that mean I can’t work with any other REALTORS®?

When you sign a Buyer Brokerage Agreement (BBA), yes you are committing to work with the REALTOR® you signed it with.

 

Why would I do that? Isn’t it better to have more REALTORS® looking for what I want?

You may be thinking to yourself, “If one is good, then surely 5 looking would be better!”

This is a myth and is counter productive. When you sign a BBA and make a commitment to work with one REALTOR® they are also making a commitment to you, making your needs a priority for them.

When you ask a REALTOR® to help you find a property but don’t make a commitment to working with them, or allowing them to work for you fully, they will set up an automated search through the MLX/FUSION system. The search will automatically email you on a preset schedule and it will be up to you to let the REALTOR® know when one catches your eye. At the time, the REALTOR® will do what is necessary to fulfill their fiduciary and/or general duties to you, depending on your agency agreement.

What most people don’t realize is that all REALTORS® have access to the same information, so you will potentially end up with several searches, sending you the same information, based on the criteria you have provided. Property searches can only be filtered so much, before ‘good properties’ get filtered right out of the search. While search tools in MLX/FUSION are powerful, they are not all –discerning. At some point, the search results need a pair of live eyes on them to more closely scrutinize the private and public details. The average person doesn’t have that many hours or the desire to do this.

When you have a written BBA, REALTORS® will review the many properties generated by the search, as well as possibly physically preview the properties – saving you time! However, if you choose to use multiple REALTORS®, plan to spend valuable time sifting through the searches yourself, and quite possibly looking at properties that don’t fully suit your needs.

REALTORS® will focus their time on clients that they have a written commitment with by way of a BBA, as these clients are relying on them to provide the service.  

 

Won’t I have to pay extra fees?

No - this does not add any extra fees. While the BBA defines the fee structure of a REALTOR®, it also allows for collection of the fees from the seller.

While it may seem that a buyer doesn’t pay for a REALTOR’s® services to buy, that is a perception only. The seller typically signs the listing agreement allowing for payment of REALTOR® fees, but has also built these into the sale price of their house.

 

My other REALTOR® didn’t make me sign a Buyer Brokerage Agreement – why are you?

In the past, BBAs were not mandatory.

There are two methods of operating a brokerage:

  • Common Law (CL) – all agents are representatives of the brokerage and the brokerage is the entity that represents the client; all agents are deemed to know the details of others’ clients, whether or not they do
  • Designated Agency (DA) – the brokerage designates an agent(s) to represent a client; no one else in the office knows, or is deemed to know a client’s information unless they are the designated agent

Under a CL brokerage, they are still optional.

Under a DA brokerage, they are mandatory. The BBA solidifies the agency relationship and allows an agent to act fully on your behalf. By the end of 2014, it is anticipated that a BBA will be mandatory for all brokerages.

BBAs were born from complaints that buyers were not represented in real estate transactions.

Going back ~20 years, there was a time when every REALTOR® was either a listing agent working for the seller, or a sub agent of the listing agent, working for the seller. Buyers had no representation and it really was caveat emptor, or buyer beware. Methods for dealing fairly in real estate transactions have evolved over the years, and the BBA ensures fair representation for the buyer.

 

Don’t you have to work for me in my best interests anyway?

As discussed in the Agency Relationship Guide, there are different ways for you to work with a REALTOR®:

Sole Agency

 

O – obedience

L – loyalty

D – disclosure

C – confidentiality

A – accounting of $$

R – reasonable care & skill

Honesty

Advise on & advocate for

 

Transaction Brokerage

 

O – obedience

L – loyalty

D – disclosure

C – confidentiality

A – accounting of $$

R – reasonable care & skill

Honesty

Advise on & advocate for

 

Customer Status

 

O – obedience

L – loyalty

D – disclosure

C – confidentiality

A – accounting of $$

R – reasonable care & skill

Honesty

Advise on & advocate for

Provide factual information only

 

The best way a REALTOR® can provide service is through Sole Agency.

Working in Designated Agency under a Buyer Brokerage Agreement, is the best way to facilitate this activity.

 

Doesn’t this just protect the REALTOR®? Where’s the benefit in it for me?

While there is remuneration discussion in place and accounted for, no, protection for the buyer is also clearly defined. The BBA clearly establishes duties of the brokerage and the REALTOR®.

 

What if I don’t like your work or think you aren’t working hard enough?

If you don’t like our work, then we need to talk about it. We pride ourselves on providing extreme customer service! If however, we still don’t agree then Section 10 of the BBA clearly outlines how the agreement can end early.

 

I might get a better deal by looking on my own

While there is always a possibility of you ‘scoring a deal’, the odds are not in your favor. Most people that are selling their property as a “For Sale by Owner” either want more than what the property is worth in market value, or may be trying to hide a defect they don’t want to disclose.

A REALTOR® will help dig for information, as well as provide data supporting the fair market value.

 

I may get a better deal by calling the REALTOR® on the sign of the property I want to buy

This is another myth. They are more than happy earning both the selling and buying side of the commission they’ve negotiated with the seller.

You are also putting yourself directly into a Transaction Brokerage situation, where the REALTOR® cannot act fully on your behalf. While they are obligated to provide the services mentioned above, they cannot advise you on price or motivation, nor can they advocate for you.

 

 

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Team Leesman C.A.R.E.S

Team Leesman C.A.R.E.S

REALTORĀ®
CENTURY 21 Bamber Realty Ltd.
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