Buyer Broker Agreement: What it Is and What to Include

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Buying a home isn't as simple as shopping for anything else; you'll be required to sign several agreements even to begin the process, such as the buyer broker agreement.

Whether you're a home buyer looking for a broker's help or a broker simply interested in knowing more about the agreement, this legal document is one of the essential steps of real estate.

It's worth noting for a buyer that a broker will ask you to sign several disclosures and contracts while you work with them. That's why it's important to know what you're getting into before signing away!

If you're curious about the importance and contents of a buyer broker agreement, keep reading.

Here is a complete guide to buyer broker agreements.

What is a Buyer Broker Agreement?

A buyer broker agreement is a contract that legalizes the relationship between a buyer and a broker. Furthermore, it is a legally binding contract that outlines the rights and responsibilities of both parties. This contract essentially details that the buyer is utilizing the help of a broker to search for and buy a home.

When a buyer signs the real estate contract, they legally agree not to work with any other broker to help them buy a home. The terminologies used in a buyer broker agreement differ from state to state, but they all require the same responsibilities.

In a buyer broker agreement, there are specific duties a broker must fulfill and certain duties for the buyer too. A refusal to fulfill these responsibilities will result in a contract breach and legal trouble.

Here are the duties of a broker in a buyer broker agreement.

• Finding properties for the buyer to consider
• Disclosing material facts
• Reviewing paperwork
• Preparing purchase offers
• Conducting visual inspections as required
• Fiduciary duty to act in the best interests of their clients and avoid conflict of interests

Here are the duties of a real estate broker in a buyer broker agreement.

• Considering the properties the broker presents
• Acting in good faith and trusting the broker to help them
• Qualifying the purchase of a property
• Reading documents, such as the buyer inspection advisory
• Cooperating with the broker

Buyer broker agreements sometimes go by other names even though they may mean different things, including:

• Buyers agreement. A contract that details the terms and condition of the working relationship between a real estate agent and home buyer.
• Buyer representation agreement. A contract that details the relationship with a buyer’s representative, such as what services they provide and what the buy can expect.
• Purchase agreement. A contract between the seller and buyer that details the sale of the property.
• Buying agency agreement. A contract that details the relationship between the home buyer and the buyer’s agent.
• Exclusive agency agreement. A contract where the broker acts as the agent and the sellers pay commission to the listing broker if the property is sold by any real estate broker. If the property is sold by the sellers, then the seller doesn’t have to pay commission to the broker.
• Exclusive listing agreement. A contract that specifies one real estate broker to act as the seller’s agent.
• Listing agreement. A contract that gives a real estate broker authority to find a buyer for the property owner.
• Mortgage broker fee agreement. A contract between a real estate property buyer and a mortgage broker. It outlines the terms and conditions of the fees the mortgage broker will receive.
• Mortgage agreement. A contract between a buyer and lender that gives the lender the right to take the property if the mortgage plus interest is not paid.

Here is an article about buyer broker agreements.