What is a Buyer Agency Agreement?
Have you been asked to sign a Buyer Agency Agreement? If you’re in the early stages of looking for a home, or haven’t found an agent you trust, you’re probably wary. And I don’t blame you.
Just because someone shows you a few houses he isn’t necessarily qualified to represent you. You have to be careful about what you sign, or you could end up owing real estate commission to an agent who had nothing to do with helping you purchase the home.
Early in your search it’s probably OK to sign a limited Buyer Agency Agreement — for example, just for the day or for a particular house. After all, you’re asking the agent to do work and if she shows you the house and you buy it, you’re tacitly agreeing that she is qualified to represent you. It’s just not fair to ask people to work for free.
When you get serious in your home search, then you should interview a number of agents and hire the one who you think will best represent you in your home search and purchase. You should educate yourself on selecting an agent to represent you and what the legal agreement will look like. Ask about the different levels of agreements:
(1) Written acknowledgment of buyer agency is the minimum required by Illinois state law. The agent must describe the services available to a buyer and the duties and responsibilities of a buyer agent.
(2) Non-Exclusive Buyer Representation Agreement: The Realtor can show homes, prepare market analyses and represent the buyer in the purchase of a home. The client is not required to work with only that agent. Many agents and brokers will start a relatioship with a client under this arrangement and then request an Exclusive Agreement before writing an offer.
(3) Exclusive Buyer Representation Agreement: If the client buys a home in the time period and in a specific area he agrees that the agent will exclusively represent him in the purchase of a home.
I would be very worried about working with an agent who says “oh, I never bother with a Buyer Agency Agreement“. Would it be a good choice for a buyer to select an agent who picks and chooses which laws he or she will follow? Or to select an agent who doesn’t make a written commitment about the work to be done and the compensation to be provided?
In Illinois, a buyer cannot be equally and fully represented by the agent who is listing the home being purchased. Many agents and brokers — me included — believe that “dual agency” (doing both sides of the transaction) should be illegal in Illinois. In a simple transaction perhaps an agent can perform services known as “ministerial acts” without representing either side, but there just don’t seem to be simple transactions anymore.
If you would like more information about buying or selling a home in the western suburbs of Chicago, please call me at (630)945-7935 or email me at email@example.com.