Buyer agency agreement

Buyer Agency Agreements are where a Realtor represents the buyer of real estate.

Creation

With the advent of "Buyer Agency" (Buyer Brokerage) in the early 1990s as opposed to seller agency, a real estate Agent/Broker agrees and contracts to represent the Buyer in her purchase of a home/property. Buyer Agency Agreements were developed to set out the terms and conditions of this representation. They are similar to the written "Listing Agreements", required between Listing Agents and Sellers (property owners). Buyer Agency Agreements set out the main conditions of the relationship between the Buyer Agent and her Buyer Client including such things as the duration of the agreement, the commission to be earned/paid, and the various rights, duties and obligations of the parties.

Fiduciary duties

The Buyer Agent owes fiduciary duties to the Buyer under this relationship and agreement, including fidelity, honesty, dedication to purpose, acting in the Buyer's best interests, etc. [The fiduciary duties are often labeled "candor, loyalty and good faith"; see Fiduciary or "Meinhard v. Salmon" for a thorough discussion of fiduciary duties.] The commission to be paid to the Buyer's Agent in the Buyer Agency Agreement, though ultimately the Buyer's obligation, is generally offset against the share, or "co-op", commission offered by the Listing Agent through the Multiple Listing Service ("MLS"). An exclusive buyer agent is a real estate agent who is licensed with a firm that does not accept listings on property. Exclusive buyer agents (and their clients) avoid the conflict of interest of working with an agent who promotes their listings or their firm's listings.

The Realtor, when working for both parties, can have a conflict of interest, possibly breaching their duty to their clients.

See also

*Agreement
*Conflict of interest
*Contract
*Closing
*Fiduciary
*Listing
*"Meinhard v. Salmon"
*Real estate
*Real property
*Real estate trends
*Realtor

References