What is the exact purpose of a Buyer’s Agent Agreement? (disclosure, appraiser)

[ColoWeb]

I just want to make sure that I understand the exact purpose of the Buyer’s Agent Agreement. It basically states that you have, for a given period, to work exclusively with the chosen agent? After the set time frame either party can go their own way?

Are there any items one has to watch out for in them?

How many properties would an agent generally show you before asking one to sign the agreement?


Thanks!

[gbone]

Originally Posted by ColoWeb

I just want to make sure that I understand the exact purpose of the Buyer’s Agent Agreement. It basically states that you have, for a given period, to work exclusively with the chosen agent? After the set time frame either party can go their own way?

Are there any items one has to watch out for in them?

How many properties would an agent generally show you before asking one to sign the agreement?


Thanks!

In my state(TN), the primary purposes of a Buyer's Agent Agreement is to document the business relationship between the two parties. It spells out the responsibilities of each party, clarifies the agency relationship, addresses remuneration and time frame. The intent of this agreement is to protect both parties.
In general, I will explain the Agreement to buyers and have them sign it to at least cover the time frame for the initial showings(one or two days). If they are satisfied with me and my services based on the initial showings and want to continue working with me I will ask them to sign an Agreement for a longer period of time(i.e. ninety days). If they are not satisfied with my services they are free to find another Realtor to work with. Also, if I am not performing my responsibilities per the Agreement and the client and I are unable to mutually resolve any problems, I will let them out of the Agreement. I don't care to work with people that don't want to work with me.

[Brandon Hoffman]

Answers can vary depending on agent, company policy and state law.

The purpose is that you are formally hiring an agent which binds the agent to your best interest and protects the agents time. I think they are a good thing.

[2bindenver]

In CO, our forms come from the state. It is a fee for service contract, for a specific fee, for a specific time frame.

See State of Colorado-Department of Regulatory Agencies - Division of Real Estate

and the exact form is http://www.dora.state.co.us/real-est...0040705CLN.pdf

[TexasHorseLady]

Our forms are written by the Texas Real Estate Commission (well, their attorneys), and are intended to, as stated above, clarify in writing the relationship between the parties. Without an agreement, the agent is bound by law to fiduciary duty to the seller, NOT the buyer. With an agreement, that fiduciary duty transfers to the buyer and they have someone representing their interests.

They last for the duration of the contract. However, here in Texas, there is a paragraph that protects the agent for a set period of time after the contract ends. If the agent showed a property to the buyer, who said they didn't want to buy it, and then within that time period after the contract ends (could be 30 or 60 days - what it is varies by agent and broker but it's written into the agreement before anyone signs it) purchases the property, the agent is entitled to their commission. This exists because there have been buyers and sellers in past who colluded to defraud both agents of pay for their work by waiting until the agreements (listing and buyers') expired and then got together to sell the property.

Pretty much every paragraph in a contract (real estate or otherwise) exists because somebody, sometime, usually several somebodies several times, did whatever the paragraph protects against. Sad commentary, but true.

It used to be that you could sign one any time up until you write the offer, with some agents. However, in the current time with the current market and the current fuel prices, a lot of agents are tightening up on this one and won't work unprotected. Same thing with getting a preapproval letter before going shopping. Taking a buyer window shopping who you don't know can buy what they're looking at is foolish, these days, and a waste of resources.

[ColoWeb]

Thanks everyone. In that agreement, in Colorado at least, it has this clause:

12. DISCLOSURE OF BUYER'S IDENTITY. Broker …[] Does []… Does Not have Buyer's
permission to disclose Buyer's identity to third parties without prior written consent of Buyer.

'Third parties' is very general (anyone basically) so, if 'does' is checked why would a buyer agree to this?

Thanks

[Brandon Hoffman]

Originally Posted by ColoWeb

Thanks everyone. In that agreement, in Colorado at least, it has this clause:



'Third parties' is very general (anyone basically) so, if 'does' is checked why would a buyer agree to this?

Thanks

We have a similar clause in our agency agreement. In SC third parties refers to 3rd parties involved in the transaction, such as appraisers, lenders, attorneys on behalf of the client. It does not mean we have the right to sell or give out personal information.

[Moonwalkr]

We were shown as many houses as we wanted and did not even sign a buyer's agreement until we were ready to put in an offer. Different agents probably work differently.

[2bindenver]

Colorado seller/property listing agreements have a "holdover" clause to protect the brokerage's commission if a buyer was introduced to a property, then waited for the listing to expire before coming to an agreement to buy/sell.

In order for this to work, the brokerage must submit the names of prospects in writing. The third party in the buyer's listing agreement - is the listing brokerage. Then anyone that becomes a part of the transaction.

I have only once had "does not" checked - The buyer was a local professional athlete who felt if folks knew who he was the seller wouldn't take the deal, the appraiser would look as closely...It was harder to sell the place without buyers figuring out who owned it. He had a trophy room and every bedroom had photos of him & the kids in uniform.

[ColoWeb]

Thanks 2bindenver, Moonwalkr and Brandon Hoffman.

I added reputation to everyone. For 2bindenver it says I have to wait before giving you some more... so I will wait.