Boston condo buyer asks: ‘What’s an Exclusive Buyers Agent Agreement?’
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Boston condo buyer asks: ‘What’s an Exclusive Buyers Agent Agreement?’
The real estate landscape is evolving, and a big change this year is the mandatory use of the buyer broker agreement. Though this agreement has been around for years, a majority of agents didn’t use one—leading to potential confusion about agent-client relationships.
Buyers will now need to sign what’s called the Buyer Representation and Broker Compensation Agreement with their chosen buyer agent before viewing properties or making offers. This agreement, similar to a seller’s agreement with their listing agent, formalizes the relationship between the buyer and their agent. More info coming
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Boston condo buyer asks: ‘What’s an Exclusive Buyers Agent Agreement?’
What is an Exclusive Buyers Agent Agreement?
The simple answer to this question, an exclusive buyers agent contract is an agreement between a Boston condo buyer and their Boston real estate broker for a set period of time. The agreement will state that a Boston condo buyer will not buy any real estate of a specific category, in a specific location without using the services of that broker/agent (real estate office).
As always, be sure to read any real estate agreement in full before signing and I also recommend consulting a lawyer for legal advice.
The 3 Basic Parts to an Exclusive Buyers Agent Agreement:
Set period of time
Agreement to compensate for help with finding a specific type of real estate in a specific location
Agreement not to work with any other Boston condo broker/agent in finding the specified real estate category.
3 Reasons Why I Think Home Buyers Shouldn’t Sign an Exclusive
1. Time period is too long. Relationships can change. If the period of time set in the agreement is too long, the Seaport condo buyer might feel trapped. Even if they like the broker/agent, they could reasonably worry that the broker/agent will stop serving their interests and working hard for them over a long period of time.
2. Compensation is too high, too risky. The vast majority of the time the seller offers to pay the buyer’s agent commission. In fact, some exclusive buyer’s agent agreements say that the buyer’s agent will accept whatever the seller is offering, while others put a hard number of the buyer’s agent commission, and so if the seller isn’t offering enough money to the buyer’s agent, it will be the responsibility of the buyer to pay their buyer’s agent the difference, no matter how high that amount might be.
3. Type of real estate or location is too general. The exclusive buyer’s agent agreement should specify the geographic location the agreement applies to and the type of property. The location and the type of real estate the real estate buyer is looking for should match the buyers agent’s expertise. Realtors are often experts within location and within a property type, not experts in general.
Example of an Exclusive Buyers Agent Agreement
Should I Sign an Exclusive Buyers Agent Agreement?
I’m not a big advocate of an exclusive Boston condo buyer’s agent agreements. It limits your options, and I really don’t see any plus signs for the buyer, its mostly for the Boston condo broker.
Are there Top Buyers Agents that Don’t Require an Exclusive Agreement?
It is important to say that just because a top buyer’s agent doesn’t require an exclusive agreement, this doesn’t mean they are willing to work with buyers who are using multiple real estate agents for the same reason at the same time.
Its best that you be honest with the real estate agent you’re working with, especially if you’re asking them to work on your behalf in good faith, without a signed exclusive agreement. Having an honest open relationship is important for both use as the buyer and your agent.
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