Do I have to sign a Buyer Broker Agreement if I’m going to work with a real estate agent?
The policies vary from company to company and from agent to agent regarding Buyer Broker Agreements as does the timing at which they are signed. Some agents require you to sign a Buyer Broker Agreement before they will show you a single house. Others will wait until you are ready to present an offer on a property.
Types of Buyer Broker Agreements
There are different types of Buyer Broker Agreements. First, you may have an Exclusive Agreement that says you will only work with that agent. Second, there are Non-Exclusive Agreements that give you the option to work with multiple agents.
You can also specify the type of property, location, and price range that the agreement will apply to.
There are both pros and cons to signing a Buyer Broker Agreement.
Pros: You know that the agent is working for you and representing your best interests in a transaction. It has also been lined out if there will be a fee due to them if you decide to purchase a home that’s For Sale By Owner or if you don’t purchase at all. Everything is clear and in writing.
Cons: If you sign a Buyer Broker Agreement with an agent and then realize that you do not want to work with that person, you may be committed to paying the agent a commission when you buy and may not be able to find other representation.
Whether you choose to sign a Buyer Broker Agreement initially or not is a personal decision. Business transactions are most successful when based on mutual trust and when all parties are working for a Win Win situation. If everyone is on the same page, then a written agreement is just a formality.
Real Estate Agents are professionals who work on commission and only get paid at the time of a sale. If your agent provides good value, information, and is honest and forthright, a Buyer Broker Agreement lets them know that you will be loyal to them in a transaction as well. This can go a long way in building a productive business relationship.
If you decide to sign you may consider having a clause that will allow you to cancel the agreement if you determine that you will be unable to work with that specific agent and that no fee will be due. It is also worth being specific about how/if a commission will be paid if you decide to purchase a For Sale By Owner (FSBO) property.
Agents in Montana are required to have a signed form in their file if they represent you in the offer to buy property. They are also required to explain agency to you. So when you get to the point of making an offer on a property, be prepared to sign the agreement as part of the standard Buy/Sell packet of paperwork.
