Q&A On The New Buyer Representation Agreements
As a result of the recent settlement by the National Association of REALTORS®, real estate agents will soon be required to enter into written agreements with buyers before giving property tours. Buyer Representation Agreements (aka Buyer Agency or Buyer Broker Agreements) are not new. We have used these agreements for years, but they have never been required in the state of Florida before. Some agents have already started using them. We welcome our buyers to sign an agreement with us, even before the new requirement begins in August.
Beginning in August of 2024, real estate agents will be required to enter into written agreements with buyers before giving property tours.
What does your Buyer Representation Agreement look like?
By The Sea Realty offers several Buyer Representation Agreements that can be customized for the buyer’s specific needs. Which form we use is dependent on the level commitment you are comfortable with and the type of relationship we have with you.
Our standard agreements can last as little as one week. Once you are comfortable with your agent and their services, you should talk with them about entering into a longer term agreement. Real estate transactions can last weeks, months, and even longer in some cases. Finding an agent who can commit to your long term success is key to a successful transaction.
We also offer a “Showing Agreement”, which is essentially a short term agreement that is specific to one or more properties. This provides buyers with an opportunity to meet with a buyer’s agent, and to learn about their experience and professionalism. When meeting your “showing agent” for the first time you should ask if they are available to represent you on a longer term basis.
What can a “Buyer’s Representative” do for me?
A Buyer’s Representative (aka Buyer’s Agent or Buyer’s Broker) specializes in providing many different services to buyers including touring multiple properties, preparing contracts and negotiating on the buyer’s behalf. For buyers that are new to the area, it is important to have a local agent who is very familiar with the neighborhoods, condo buildings, waterfront (if applicable) and the different types of properties available in the area. Local knowledge is key!
Real estate transactions in Florida can be very complicated. Locating and touring property is just one part of our job. You really need a local agent to negotiate the contract, manage the transaction and help you navigate all the way to the closing table. In addition to your closing, your buyer representative will coordinate property tours, inspections, estimates and appraisals. They will collaborate and communicate with your entire team, including your lender, attorney, title agent, inspector, appraiser, contractor and any other critical players. A good buyer’s representative will work extremely hard for you, saving you time and money!
Most importantly, buyer’s agents provide expert guidance through one of the most complex and important financial decisions you will make in your lifetime. Most sellers have a listing agent who represent them and their side of the deal. As a buyer, you will definitely benefit from having an professional buyer’s agent representing your interests in the transaction. Every party in a real estate transaction deserves to have professional representation!
Do you need more reasons to work with a buyer’s agent? Here are 105 Ways REALTORS Are Worth Every Penny of their Compensation
How much will a buyer’s representative cost me?
Every brokerage sets their own fees and your agreement will specify how much your buyer’s agent will get paid. It is likely you will not have to pay the fee out of your own pocket. In fact, as buyer’s agents, we are obligated to try to collect our fee from the seller or the listing broker. Sellers are not obligated to pay buyer agent fees, but many sellers do offer to pay our fees out of the sale proceeds. That is customarily how it has been done, and we anticipate it will continue this way for most transactions in the future.
What if the seller does not want to pay your agent’s fee? If you don’t want to pay it out of pocket and you are getting a loan, then you may choose to add your agent’s fee to the offer. For example, if you want to offer $500,000 for a property and your agent’s fee is $15,000, then you can offer the seller $515,000 and ask the seller to pay your agent’s fee. Every deal is different and there are many ways to approach it. The bottom line is we will do everything we can to collect our fee from the seller.
Can I work with more than one buyer representative?
Our agreements are mostly exclusive, but it is possible to work with multiple agents depending on the location and services they offer. For example, if you are looking to purchase a single family home in Fort Lauderdale and a condo in Jacksonville, then you would be able to work with two different agents. You could also work with a third agent if you are leasing commercial property in Clearwater. Just make sure the three agreements are location and service specific. You should never have more than one exclusive agreement for the same type of property in the same local market. Make sure you disclose to all your agents what exclusive agreements you have signed.
What is the bottom line?
Working with a buyer’s representative and signing an agreement prioritizes your interests, not the seller’s interests. As a buyer, you should expect personalized service designed to meet your real estate needs. Buyer agents provide valuable local knowledge and do a ton of legwork for you, saving you time and money. Signing a Buyer Representation Agreement will set clear expectations for both you and your agent. It is the new normal and the foundation for a successful real estate transaction.
Learn more about the NAR Settlement and the new buyer representation rules.
