17 Oct What is a buyer’s representation agreement
What is a buyer’s representation agreement?
In the state of Minnesota, we have two types of buyer’s representation agreements. First, is an exclusive agreement buyer’s agreement. Second, is a non-exclusive buyer’s agreement.
In order to get representation from a real estate agent you must enter into a buyer’s agreement. Furthermore, a buyer’s agent is helpful to help navigate the complexities of a real estate transaction.
The exclusive buyers agreement
This contract is between the buyer(s) and their agent of choice. Upon signing this the agent is your advocate. Their duties include using professional knowledge and skills to assist in negotiation. Also, the agent must assist the buyer throughout the transaction. Additionally, this is a legal and binding contract for the agent to represent you and only your best interests. In Minnesota the commission is paid by the seller. In my case, in 32 years of real estate the buyer only elected once to pay my commission. This was the result of his generous relocation package. So, you are provided representation but don’t pay for it. As the result, the only fee the buyer will have is a broker fee that is paid at closing. As a rule, this fee goes to the agent’s company. Generally, it doesn’t go to the agent unless it is a very small, broker-owner company and they keep it for themselves. This fee for our company is 499.00. You will find many companies are higher.
The non-exclusive buyers agreement
This has the elements of the exclusive representation agreement, but buyer can work with other agents too. I have found that most agents don’t use this agreement. It is because agents work so hard for their clients and put in countless hours of work. For that they expect loyalty from their buyer clients. As an example, I have never used the non-exclusive representation agreement with my clients.
In conclusion, a real estate transaction is complex and having representation is a real benefit you. I suggest choosing an agent based on their track record, testimonials and years of experience. A real estate advocate (agent) with real estate savvy can be a huge benefit to you. In order to receive that representation, you need to enter into a buyer’s representation agreement.
If you need further information, please contact us. The Anderson team is committed to providing you the best representation possible.
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