Once you have chosen an Agent, you may be asked to sign a ‘Buyer Agent Contract’. Just like a contract a Seller has with an Agent to sell his home, a contract may be required for an Agent to represent a Buyer.
The contract is in place to protect both parties. For the Agent, it is security that you are the only working with them and no other Agent, and it details their compensation they are to receive upon the closing of a property you purchase.
For the Buyer, the contract holds the Agent to their fiduciary duties, including fidelity, honesty, dedication to purpose and acting in the Buyer's best interests. The contract also prevents the Agent from representing both the Seller and a Buyer in a transaction, ensuring they are truly looking out for their clients’ interests.
You don't have to sign a Buyer's Agent agreement, however most Agents will want some sort of agreement in place before they put in any time and money. Remember, no money is due to the Agent until the deal closes and the commission comes out of the proceeds of the sale.
If you have no contract, you are free to change Agents at any time or even work with multiple Agents. But Agents do not like having a client working with several Agents at the same time, as this can leads to compensation complications. For example: an Agent can show a Buyer a home, but the client decides to put in an offer on that home using another Agent. Technically the first Agent is due the commission, as he/she presented that property first.
So, to avoid any complications, it is advised that Buyers should research different Agents to find the right fit for you, and secure a ‘Buyer Agent Contract’ that clearly defines the duties and expectations of the Buyer and the Agent. The duties usually include:
Please note that an Agent is not obligated to show properties not available in the Multiple Listing Service (MLS) unless requested to do so by the Buyer in writing.
In some cases, the Buyer is required to pay a $295 transaction fee depending on the sales price and work involved in the transaction.