Planning on using a Realtor to help you purchase a property?
If so, at some point early in the process, your Realtor is going to ask you to sign a form called the Exclusive Buyer Brokerage Agreement. If he doesn’t, you’ve got a pretty clueless Realtor on your hands.
What is an Exclusive Buyer Brokerage Agreement and why do you need one?
In short, it’s an agreement between the buyer and his or her Realtor that, via way too much verbiage, states:
- The Buyer is exclusively working with the Realtor.
- The Realtor is dedicated to and working for the buyer.
- The Realtor is treating the buyer as their client, not their customer.
- The buyer’s Realtor has his commission paid by the seller, not his buyer.
- There’s no monkey business going on here!
Let’s take a closer look at these.
- The Buyer is exclusively working with the Realtor. This means that the buyer is not working with more than one Realtor. This is really important because Realtors don’t get paid until all the hard work is done. Also, only one Realtor gets paid for representing a buyer at a closing. Let me assure you that there’s nothing worse than putting in a ton of hard work with a buyer to later have them say something like “I’m now going to look in Cobb County and I won’t be needing you for that.” Ouch.
- The Realtor is dedicated to and working for the buyer. This typically is the case regardless, but sometimes the Realtor really represents the seller and in this case, you are just this Realtors customer, not client. This is what happens when a buyer roams into a builder sales center in a community without his Realtor. The Realtors in the Sales Center are representing the seller, and you are unfortunately, unrepresented.
- The Realtor is treating the buyer as their client, not their customer. Most people are not aware of the differences between Agent/Client and Agent/Customer relationships. But in short, an Agent/Client relationship is parallel to an Attorney/Client relationship where all information is confidential and the Attorney fully represents the best interest of only their clients.
- The Buyer’s Realtor get his commission paid by the seller, not the buyer. It’s important to know where the commission is coming from. And it’s nice to know that you are not the one paying it.
- There’s no monkey business going on here. This means that the Realtor and the Buyer are working together as a team and are not going to violate each others’ trust. The Realtor is not going to flake out on the buyer and become non responsive when it’s go time. And the buyer is not going to stop communicating and switch to their cousin’s brother’s mom’s Realtor when they discover they exist!
Lastly, by Georgia Real Estate Law, the Exclusive Buyer Brokerage Agreement has to be signed and on file prior to closing so the Closing Attorney knows what Realtor to legally pay the commission to.
So, don’t be afraid of the Exclusive Buyer Brokerage Agreement! It’s actually there for your benefit and protection.