What is Buyer/Broker Agency?
One of the most frequently asked questions we receive every day is – What is a “Buyers Agency” or “Buyers Brokerage Agreement” and why is it so critically important?
In 1993 the State of Georgia passed one of the most comprehensive consumer protection laws ever enacted regarding real estate. This law is titled the “Brokerage Relationships in Real Estate Transactions Act” and is known by its initials – BRRETA. Prior to this law going into effect, all agents involved in a real estate transaction represented the seller.
Today, the state of Georgia requires a written agreement to be in place for an agent to represent a buyer or tenant. This agreement called a “Buyer Agency” or “Buyer Brokerage Agreement” is when a Real Estate Agent or Broker enters into a contract to represent the Buyer in the purchase of a home or property. Now buyers have the option of choosing a buyer’s representative who is contractually bound to their fiduciary interests instead of the seller’s or builder’s agent. These duties include:
- Dedication of purpose
- Always acting in the clients best interests
What are the advantages?
Simple: The Listing or Selling Agent with the sign in the ground represents the seller of that property. Similarly, onsite Agents at new home communities represent the Builder, not the buyer. He or she cannot, and will not tell you all you need to know about one of the largest financial purchases you’ll make in your lifetime since they are contractually bound to the seller. Think of an Attorney/Client relationship as a good comparison. The good news – there are only distinct advantages to a Buyers Agency agreement.
Advantages of a Buyers Agency
- Without a Buyers Agency agreement in place, agents are limited by Georgia agency law on the types of information and advice that can be discussed. Subsequently, if you want full undisclosed representation, you need a Buyers Agency agreement in place
- Your buyers agent should tell you everything he or she can find out about the seller and reasons for selling
- Your buyers agent should point out and advise you on all the potential negative aspects of each property, not just the positives
- Your buyers agent should tell you if the listing is overpriced
- Your buyers agent should offer a wide variety of comparable properties to preview, not just their agency’s listings
- Your buyers agent should provide guidance and consultation throughout the process, acting as a project manager to keep tabs on important dates and deadlines
- Your buyers agent should be a contract expert, knowledgeable in all facets and types of transactions and documentation necessary to complete a successful sale
- Your buyers agent should help you formulate an offer price and negotiating strategy based on market data available to them and represent you like an attorney all the way to the closing table
A good buyer’s agent won’t stop showing property until you find the right one. They should actively assist in a comprehensive search based on your budget and buying criteria without prejudice to any agent or any company. Without a buyer’s agent helping you get the right house, at the right price and terms, you could potentially purchase a home at a much higher cost, or – worse yet, one that is not marketable at a later date to potential buyers or renters in that area.
What’s the cost?
There is no additional cost to entering into a Buyers Brokerage Agreement for a buyer’s agent to represent you. If you buy directly from the listing or selling agent, they receive 100% of the commission the seller is contractually obligated to pay. If you’re using a buyer’s agent, the commission that is paid by the seller is split between the agents.