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 AGREEMENT BETWEEN SELLER & BUYER

Why Buyer's Agents Ask for a Buyer Broker Contract

A buyer broker contract is an agreement between the buyer and the buyer's agent. There are 3 basic types of buyer broker agreements. One is exclusive. An exclusive buyer broker agreement binds that buyer's agent to you and you to that buyer's agent. You cannot buy a property without owing a commission to that agent. Agents who want to ensure that they have a legal and binding agreement that allows them to represent a buyer exclusively, and be paid for their efforts, will ask a buyer to sign an exclusive buyer broker agreement. Buyers who hesitate to sign an exclusive buyer broker agreement with me, for example, are saying they don't care if I get paid, so I don't work with them. I work with buyers who agree that I will get paid. I'm no different than any other agent in that regard. Which is why I don't blame your buyer's agent for refusing to show you any more properties without a guarantee of compensation.

Do Buyers or Sellers Pay the Buyer's Agent?

This has caused a great deal of confusion in the real estate industry and with consumers. Generally, a listing agreement between the seller and the seller's listing agent specifies how much the listing brokerage will pay the selling brokerage for bringing a buyer. Yes, you read that correctly. The seller, in effect, pays your buyer's agent to negotiate on behalf of the buyer, not the seller. C. A.R. buyer broker representation agreements state that if anybody other than the buyer pays the commission, then the buyer is relieved of the obligation to pay it. There are instances where a buyer may pay a brokerage directly such as when there is no commission offered because the property is a for sale by owner. But typically the commission is paid by the seller to the listing brokerage. The listing brokerage divides the commission with the broker of the agent who brings an offer.