There are few things that are as stressful as buying a home, especially for the first time. There are so many things to consider, such as the size of the home, the location it is in and whether it has a good school district. Many purchasers opt to have a real estate brokerage represent them in the sale. The responsibility of a person licensed to practice real estate is to act as a liaison between the selling and purchasing parties to the transaction. An agreement must be signed by the agency and the purchaser in order for the licensee to represent them during the course of the transaction.
The written agreement between an agent and a client must be clearly detailed, prior to any transaction taking place. This includes the names and addresses of both the purchaser and the company agreeing to represent them. It may also detail such things as the estimated price range of the purchaser as well as any contingencies they may have. For example, one contingency may be that they are already considering a certain home from a person without any agency representation, such as a friend or relative. The agreement would state that if they decide to buy that house or any house that was previously looked at prior to the agency agreement, the agency would not be entitled to any form of compensation.
This can also include the homes that the purchaser has looked at, that had a seller who was represented by an agency, but the purchaser did not have representation at the time of the viewing. This is why it is so important for a buyer to be clear when detailing to a prospective broker or agent, any type of contingencies that they may have. Brokers usually have pre written agency agreements and there are usually several kinds that the buyer can choose from.
The exclusive Right to Represent Buyer/Broker Agency agreement is the one that is typically used to detail the agreement between the buyer and the agent. In this agreement, the purchaser consents to allow the agent to represent them on an exclusive level. It also details the amount of commission the purchaser agrees to pay for the service, as well as the length of time the agent is given to represent them.
The Non Exclusive/Not for Compensation agreement also details what is expected of the agent. In this agreement there is no specification of the amount of commission to be paid and the purchaser retains the right to use more than one agent.
The Non Exclusive Right to Represent agreement also details the requisite obligations of the agent but also includes an agreed upon commission to be paid. The purchaser still retains the right to use other agencies.
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