The first time you sit down with your REALTOR to start the exciting process of finding your next home, they will likely have a host of paperwork to go over with you. One of the documents you will be presented with is what's called a Buyer Representation Agreement.
So what is this, and do you have to sign it?
A Buyer Representation Agreement (BRA) is a contract between you and the Real Estate Brokerage, represented by your REALTOR. A BRA outlines the geographic location for your potential new home, as well as property type (single detached home, condo etc.). It also lists the services that will be provided by the Brokerage, and the commission that will be paid to the Brokerage. It will have a commencement date and an expiry date for the contract.
It should be noted that you will be required to initial anything longer than 6 months for your contract length. This is to ensure you understand the length of the agreement. As well, the commission as outlined in the BRA is generally an amount that is paid by the Seller's upon the closing of your purchase. These are both things you should understand and discuss with your Brokerage, to make sure you fully understand what you are signing and that you're not agreeing to terms that you don't want. As always, it's important to read any document your Brokerage asks you to sign, and request that your Salesperson walk you through it.
You’re under no obligation to actually purchase a home during the term of the agreement, and a BRA can be terminated upon agreement between both the Buyer and the Brokerage.
You don’t have to sign the Buyer Representation Agreement; however, upon signing you can be sure that your REALTOR will be held to the highest professional standards and obligations, and will work for your best interests in finding your new home.