Real estate agents perform administrative and legal tasks such as preparing documents to be signed by the buyers or tenants of a property. These documents include notices, disclosures, and contracts. The latter are bilateral (two-way) legally binding agreements between the parties. An example of such an agreement is the real estate buyer broker agreement, which we will discuss in this article.
What is a buyer broker agreement?
When you hire a real estate broker to help you buy a property, you must sign a buyer broker exclusive agreement to define the legal relationship. This means that the buyer has an exclusive contract with that broker and cannot work or search and sign with another real estate broker,
The buyer-broker agreements clarify the parties’ roles and obligations and state precisely what services will be offered by the broker. There are several kinds of real estate deals between the broker and the buyer. There are also non-exclusive real estate brokerage agreements.
Generally, buyer broker agreement samples are provided by the broker on pre-printed forms for blank spaces, and are tailored to the laws of the place where the broker works or the property is located.
Brokerage contract obligations of the parties
Broker’s obligations: The real estate broker must look for potential properties for the buyer to consider, and must review documentation, prepare purchase offers and perform a visual inspection.
Buyer’s Obligations: The buyer must take into account the homes displayed by the real estate agent, behave in good faith, be able to buy the house, read the paperwork, and comply with the agent.
Essential elements of real estate brokerage agreements
Brokers often own brokers and hire agents or work independently. By signing an exclusive buyer brokerage agreement, the buyer agrees that will work only with the broker and, by extension, with the agent the broker has selected.
But in the case that the buyer does not like the assigned real estate agent, they can ask for another one, taking into account that the exclusivity agreement is with the broker and not the real estate agent.
The length of the contract
How long does a buyer broker agreement last? Generally, the duration of the brokerage contract is detailed in the first paragraph of the legal document and is subject to the contractual terms of the buyer-broker agreement during that period of time. Depending on the complexity of the transaction and your needs, it may be extended up to one year, but most brokers will accept it for one month.
Since all real estate fees are negotiable, the real estate brokerage agreement stipulates the fee that the broker and agent will get from the buyer.
If the seller will pay for the compensation, and it’s clarified in the contract, the buyer doesn’t have to pay for it.
The description of the property
The real estate brokerage agreement should describe the type of property being purchased and the price range.
Are buyer broker agreements enforceable?
The buyer-broker agreement depends on both parts, so breaking the contract can be difficult, but not impossible. You can request that the broker release you if you are not satisfied. If you request to be released and the broker does not agree, the steps to be taken will depend on the terms of your contract.
The brokerage agreement is a legal contract, so if both parties don’t agree to mediation, one of the parties has the right to pursue legal compliance of the contract if either party does not comply with the conditions.
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