What’s the difference between a georgia exclusive and a non-exclusive buyer’s agreement?

A person who is planning on buying a home will usually sign a broker agreement with their real estate agent prior to writing up a purchase agreement. These agreements are designed to explain who is representing the buyer and what the details of this agreement are. There are a number of different buyer-broker agreements that are used throughout the U.S. Some are used more frequently than others. Let’s take a look at some of the most common agreements.

Non-Exclusive, Not for Compensation

This buyer-broker agreement is used to outline the real estate agent’s responsibilities to the buyer that they are representing. Other details will include the agency relationships, the scope of duties for the broker, and the obligations that are placed on the buyer in this agreement. Compensation is not part of this agreement. The buyer retains the right to hire another broker to help them find a new property. The buyer reserves the right to request that a single agency is their only form of representation.

Non-Exclusive, Right to Represent

This is a non-exclusive agreement that is drawn up to describe what the obligations are for the broker on behalf of the buyer. This includes information about relationships within the real estate agency and the scope of the responsibilities for each party. There is no responsibility in place for compensation. A commission will not be needed if the broker is being paid by the seller of a specific property. Buyers often think that they will need to pay a fee when they are in contact with a real estate agent who is representing a property. This is not necessarily the case. A buyer also reserves the right to buy a property from another real estate agent as long as the home is not being sold on behalf of the original agent. The buyer also has the right to request a single agency is involved.

Exclusive, Right to Represent

This agreement is very similar to the non-exclusive option when it comes to major details. The big difference between these two agreements is that the buyer is required to work exclusively with their real estate agent in this type of agreement. The buyer is not allowed to hire more than one broker but they can request single agency from the company that they are choosing to deal with. The commission is negotiable with the agent. If the seller of a home is paying commission to an agent then the buyer is not responsible for these costs.

The Importance of a Buyer-Broker Agreement

These agreements are incredibly important. When first signing up with an agent it might not seem like a big deal to consider all of the specific details that are part of a buyer-broker agreement. However, it is important to think about the future and what might occur down the line. This agreement is designed to protect the buyer and the real estate agent. Without one of these agreements there is a lot of room for error. It’s always best to outline the agreement ahead of time so that everybody knows what is expected of them. These guidelines can be followed throughout the entire process and nobody will fall short in the end when a deal is finally made.

Need more information about buyer-broker agreements, or looking at new homes in San Marcos? Contact The Damron Group REALTORS, a real estate agency in San Marcos, TX, to speak to a professional real estate agent.

Sellers sign a listing agreement. Buyers sign a buyer’s agency agreement.

It’s pretty common practice for a buyer’s agent that you’re working with to ask you to sign a buyer representation agreement.  It exists because an agent could spend hours, upon hours, working with a buyer only to have them go under contract with another agent. Real estate agents work on 100% commission, so when they spend their money, and more importantly their time, working with a buyer who changes their mind at the last minute, it hurts their bottom line. If a buyer were to work with Agent John for weeks, and then suddenly choose Agent Betty to help purchase a home simply because she is a friend of the family, then John really loses out.

Like many real estate terms, this one too goes by many names which are all basically the same type of agreement: Buyer Agent’s Agreement, Buyer’s-Broker’s Agreement, Exclusive Buyer Agent Agreement, etc. Regardless of the name, they all break down to a few key elements that state the rights of the buyer, duties of the agent, outlines compensation, and makes clear the relationship you have with the agent. 

Elements of an Exclusive Buyer’s Agent Agreement

Typically,  there are four key areas of an exclusive buyer’s agent agreement.  Depending on when your agent is asking you to sign it, whether it be on that first day when you innocently show up at Starbucks and have no idea when you’ll find a house or the day you make an offer, there a portions that may apply more than others.  Be sure to read the entire agreement in detail and ask the agent if you have any questions.

Buyer-Broker Exclusivity

The buyer agrees to work only with the broker and the agent that you chose. The expectation is that you won’t be asking another broker, during the agreement timeline, to enter into a relationship with you to help you buy a home.  By signing,  you’re committing to paying that broker a commission if you purchase a home during the term of the contract.   If you signed agreements with multiple agents,  you would owe each of them an agreed upon commission, even if only one of those really helped you.  No one wants to do that. 

Term of the Buyer-Broker Contract

On the first page of your  exclusive agreement with a buyer’s agent, typically in the first paragraph, you should see the length of time, or term, that indicates how long the agreement is in force. This might be weeks, months, or even years. Like most things in the real estate industry, the term length is negotiable.

Buyer-Broker Compensation

Another element of the exclusive agreement with a buyer’s agent is the compensation. All commission percentages are negotiable. However, it is most likely, that the seller is going to ultimately pay the buyer’s agent for bringing them a qualified buyer. However, your contract could include a minimum commission amount that you may have to cover if the seller isn’t offering your agent a commission.  Be sure to read this portion carefully. 

Property Description in the Buyer-Broker Contract

The final key portion of a contract between a buyer and agent/broker is the description of what the buyer is looking for and the desired price range. For example: if you are looking for small condo to use as a primary residence with John again,  then you are free to look at a multi-unit apartment complex with Betty. The more clear you can be on what you’re looking for upfront, the safer you’ll be.  If you already have a property you’re under contract with, you could even negotiate the agreement to apply only to that property. 

Should you sign?

First, read all the terms of the contract in detail and decide how serious you are about finding your dream home.  If you choose not to sign, chances are the agent you’re talking with won’t give you their full effort, attention, or time of day. Can you blame them? Since agents work on 100% commission, it’s really a protection issue for them more than anything else. (That’s assuming they still choose to work with you at all)

Consider it this way-  if you want someone to have your best interest in mind,  you should probably consider signing it.  If you call up the listing agent you met an an open house,  they’ll help you, but likely with the seller’s best interest in mind. (Dual agency and other forms of agent representation are a story for another day)  You want to know that there is someone looking out for you in this process, and that agent wants to know you’re committed to them as well-  in the form of a buyer’s agency agreement. 

Things to confirm before you sign: 

1 – Can you shorten the contract?

As previously mentioned, everything in real estate is negotiable. Sure, an agent might want an agreement that covers four months, but you could do 12-hours if you really wanted to. If you’re not sure that this agent is a good fit for you, or you’re not committed to your home buying search,  you might consider a lessened term. 

2 – Ask for a test trial

There’s a saying that goes, “Why would you buy the cow before you drank the milk?” The same situation can be applied here. Don’t be afraid to ask for a trial run. Can you spend an afternoon with this person? Do they really have your best interest at heart? Ask if they’ll drive you around and show you a few places first. Can’t hurt to ask. Why would you sign an agreement with someone prior to knowing how diligent they will be in helping you?  You should feel comfortable committing to them as your agent. 

Why might a buyer opt for a non

What's a major disadvantage of a non

Are buyer broker agreements required in Georgia?

What is a non