My Agent wants me to sign a Buyer Brokerage Agreement
I recently did a post about buyer brokerage agreements and it seems they are becoming more and more common, as I’m getting asked by people who are looking to buy a home if they will have to sign one or if they will have the option to sign one. Some agents will not work with you unless they have a buyer brokerage agreement in place while others won’t use them at all. I’d suggest the latter are going to be the minority in the future.
I don’t always use buyer brokerage agreements, but there are instances where I will require a signed agreement. I’m not sure how appealing working for free is to you but its not very appealing to me. Nathan in our office recently had clients who were buying a property for their daughter, and since they were paying for it they weren’t really concerned with what she wanted. What they did want was to see almost everything on the market – house, condo, anywhere in Edmonton between $350,000 and $450,000. At last count they had been out looking 9 times and had viewed about 50 properties and written several offers that were not accepted.
In this day of mere postings the likelihood of them picking a listing that offers the buyer’s agent $1.00 in compensation for all their time and effort isn’t that unlikely. In fact I almost think that it’s a law in real estate that the more time I spend with someone who is looking to buy a property, the more likely it is that they will choose a property offering $1.00 in compensation. In a nutshell, that’s why I would consider using a buyer brokerage agreement in this case. It spells out what I’ll be paid and what my clients expect of me for that compensation. If you are a buyer like this, it will be increasingly more difficult to find an agent who will work as they used to (on the promise of compensation) without the protection of a buyer brokerage agreement.
This is one of the main reasons buyer brokerage agreements will become more common place. The competition bureau seems to want to model the Canadian real estate industry after the U.S. industry (cause that’s worked so great for the U.S.). In the States buyer brokerage has been common place for well over a decade. In the end I won’t be surprised if our MLS® looks like the states in a few years as well and thats a whole other story.
About Sheldon Johnston
Sheldon is very familiar with the ins and outs of real estate; he has been licensed to sell Real Estate in Alberta for over 20 years. Sheldon has served on the Real Estate Council of Alberta, the Real Estate Insurance Exchange and the REALTORS® Association of Edmonton. Find Sheldon on Twitter @edmontonsheldon.