As a buyer, should I sign an agency agreement with a REALTOR®?

As a buyer, should I sign an agency agreement with a REALTOR®?

What’s better when you’re looking to buy: committing to one agent or “playing the field” with multiple sales reps?

If you’re just starting your search, talking to more than one agent is actually a very good idea: that way you can find one who’s a fit with your personality and has the skill sets to really bring value to what you are looking to buy and where. (After all, you’ll be working together on what could be the biggest financial decision of your life.) But once you’ve found someone you like working with, signing a Buyer Representation Agreement (BRA) can be beneficial to both you and your agent.

What is a Buyer Representation Agreement?

It’s a legally binding contract that defines the relationship between a buyer and a real estate agent. It details the services the REALTOR® will provide, commissions they will receive from the seller, and includes a specific time period where they agree to work together exclusively. One to three months is common, though that is totally negotiable: it can be two weeks or six months or apply only to a single showing.

One thing to remember: if there’s anything in the agreement you don’t agree with or don’t understand, say so. Ask lots of questions, and if you need to have someone else review it before you sign, that’s okay.

Read more: Buyer representation agreements: understanding the fine print (RECO)

Why should I sign a Buyer Representation Agreement?

While it isn’t a mandatory element of a buyer/agent relationship (unlike a listing agreement for sellers), it gives your agent something you want them to have: the confidence to commit the time that’s needed to help you buy.

There’s a lot more involved than just taking people on showings, opening doors and turning on lights. Great agents also educate buyers on value, guide them through every step of the process, submit offers, negotiate, support them through bidding wars - and fight hard for them when needed. Most agents, if they aren’t sure a client will stick around, will be less inclined to spend a lot of time.

But you won’t necessarily have to sign on the dotted line right away. While some agents will ask for a BRA before agreeing to take you on a showing, others are a little more flexible and will wait until you’re ready to make an offer on a place. It's kind of like a first date. After the meeting, you will know if it's worth continuing (and that goes both ways).

I like to build rapport and trust before asking my clients to sign, so I tend to do what feels right organically. I’ll often just get them to sign the BRA before I submit their offer. But when I have potential clients who are looking for a very specific property I know will take a while to find, I’m more likely to ask them to sign earlier. It gives me the confidence I need to invest my time.

And with that confidence comes a big benefit to the buyer client: having an agreement ensures you’ll be prioritized over someone who hasn’t signed and get the best service from your realtor as possible. Pro-tip: don't sign for more than 3 months if possible. You may decide after working with someone for a while they really aren't the right fit.

What happens if I want to work with a different agent?

If it’s been a month and you’re just not seeing eye-to-eye, it’s possible to dissolve the agreement with a release, as long as both parties agree. However, there are situations where you’ll be opening yourself up to legal action. For example, if your agent helped you find a place you like, but you broke the agreement to buy that property privately...or you decided to work with your sister, who just got her license. The initial agent would be legally entitled to the commission.

Ultimately, we want to work with people who are committed to working with us. And remember, signing an agreement won’t cost you anything as a buyer: the seller pays 100% of the commission.

Looking for an agent who will help you navigate the market and find a great place to call home? Let’s talk!

About Sean Miller

Sean is one of the top realtors at Property.ca. He has the drive and expertise to guide you through one of the most important financial decisions you’ll ever make. Whether you're a first-time buyer, a seasoned seller, are new to the Toronto market or are looking for a great investment, he makes the experience as stress-free as possible, quickly assessing your needs and offering a full range of options that fit with your lifestyle and budget. Navigating the GTA market is his specialty, and stellar customer service and deep market expertise are his calling cards. He is always ready to go the distance to help clients make the right choice, at the right time and the right price.

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