Exclusive Buyer Brokerage Agreement
Are you working with a Realtor to purchase or lease a home?
At some point fairly early in the process, your Realtor will most likely ask you to sign a form called the Exclusive Buyer Brokerage Agreement.
The Exclusive Buyer Brokerage Agreement is an agreement between the buyer and his or her Realtor. Drafted by the Georgia Association of Realtors (GAR), it’s way too long, five or six pages, and It uses way too much verbiage, but stay with me, I’ll explain why it’s a good Agreement.
It basically states:
- The Buyer is exclusively working with the Realtor
- The Realtor is working for the Buyer
- The Realtor is treating the Buyer as their client, versus their customer
- The commission for the Buyer’s Realtor is paid by the Seller, not the Buyer (you)
- There’s no monkey business going on here!
Let’s take a closer look at these points.
The Buyer is exclusively working with the Realtor.
This means that you have chosen me to work with to find your next property. Additionaly, you are not working with more than one Realtor. This is really important because at the end of the often long road to closing on a property, only ONE Realtor will be paid what’s called the buy-side commission. So this all needs to be worked out early on, at the very beginning. And that’s one of the things the Exclusive Buyer Brokerage Agreement does.
The Realtor is working for the buyer.
This is typically the case, but not always.
Consider the case where you are out looking at properties and in order to see them, you are calling phone numbers on yard signs. This results in the listing agent showing you the property.
Or, consider the case where you are going into new home sales centers on your own.
In both of these cases, the Realtors you are interfacing with are representing the seller, not you, the buyer! You…are unrepresented – never advisable in the world of real estate.
The Realtor is treating the buyer as their client, versus 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 client.
Example – the Buyer tells his Agent his maximum price he will offer. The Agent can not / will not disclose this to the Seler’s Agent, as they work through lower offers.
The Buyer’s Realtor gets his commission paid by the seller, not the buyer (you).
It’s important to know where the commission is coming from. And it’s nice to know that as a buyer, you are not the one paying it. So it is very clear that you receive Professional Representation at no charge.
There’s no monkey business going on here – Expectations are clearly stated
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 100% committed to his client and working diligently for her. And, the Buyer is not going to stop communicating and switch to their cousin’s brother’s mom’s Realtor when they discover this person is a Realtor!
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.
Bottom line
The Exclusive Buyer Brokerage Agreement is very beneficial to YOU and it really exists for your benefit and protection.
If you’re happy with your Realtor, don’t hesitate to sign the Exclusive Buyer Brokerage Agreement. In fact, make their day and ask them for it!