Prior to the 1990's, real estate purchase contracts were only two pages and were written to protect the "seller". All real estate professionals pretty much represented the "seller", not the buyer in any transaction. Today, real estate purchase contracts are eleven pages with several pages of addendums and are written to protect the "buyer". In the earlier days of real estate, the agent, hired by the buyer was working for the seller. This meant that everything the buyer discussed with the agent was disclosed to the seller.
Could you imagine telling your agent personal information about your situations, finances, etc. and then they would relay this information to the listing agent of the home you made an offer on? It was assumed by the buyer, the agent was looking out for their best interests.
Now that the rules have changed, real estate agents are now required to discuss in detail an "Agency Disclosure" form which is one part of the purchase contract. This disclosure form explicitly states who the agent represents. This form should be signed by the party that the agent is representing and is by no means a commitment from the buyer. It is only a disclosure and should be signed PRIOR to the writing of a purchase contract.
Over the years I've known several buyers who actually think they will save money by dealing directly with the agent who is the listing agent on a property. This listing agent then writes an offer on behalf of the buyer but the agent's fiduciary duty is to get the highest price for the seller, not the lowest price for the buyer. This strategy can actually cost the buyer thousands of dollars more when the negotiations start.
Being represented "exclusively" by your agent is crucial in a real estate transaction. Here's a good example; you call the listing agent off a sign you see in a front yard and ask them to show you the property. You preview the home, love it and ask to make an offer. When you discuss offer price, you tell the listing agent you would be willing to go higher but you want to start at a lower price. When the listing agent presents the offer to the seller, they can tell their seller you are willing to go higher. So the seller immediately counters your offer with a higher price.
Most buyers don't realize this, but walking into a new home community without a real estate agent can be very costly. That's right, the salesperson at the model homes represents the builder/seller, not you the buyer. So this salesperson has a fiduciary duty to get the builder the highest price possible for the new home.
If the buyer goes to a new home community by themselves and falls in love with one of their models, then they call their agent to meet them there can be disastrous. Most builders will not allow this even if the buyer did not register with the new home subdivision on their first visit. Once you cross that threshold in a new home community, the builder will not allow you to be represented by an agent.
Although the "Buyer Broker Exclusive Employment Agreement" is not standard practice, they should be. This is an agreement between the buyer and the real estate agent which discloses responsibilities and fiduciary duties between both parties. As a buyer, don't you want to know your agent is representing you "exclusively" and the agent will due their due diligence in offering you the best service possible? The agreement by no means forces a buyer to purchase a home, but rather an agreement that discloses loyalty between the buyer and their agent.
Could you imagine telling your agent personal information about your situations, finances, etc. and then they would relay this information to the listing agent of the home you made an offer on? It was assumed by the buyer, the agent was looking out for their best interests.
Now that the rules have changed, real estate agents are now required to discuss in detail an "Agency Disclosure" form which is one part of the purchase contract. This disclosure form explicitly states who the agent represents. This form should be signed by the party that the agent is representing and is by no means a commitment from the buyer. It is only a disclosure and should be signed PRIOR to the writing of a purchase contract.
Over the years I've known several buyers who actually think they will save money by dealing directly with the agent who is the listing agent on a property. This listing agent then writes an offer on behalf of the buyer but the agent's fiduciary duty is to get the highest price for the seller, not the lowest price for the buyer. This strategy can actually cost the buyer thousands of dollars more when the negotiations start.
Being represented "exclusively" by your agent is crucial in a real estate transaction. Here's a good example; you call the listing agent off a sign you see in a front yard and ask them to show you the property. You preview the home, love it and ask to make an offer. When you discuss offer price, you tell the listing agent you would be willing to go higher but you want to start at a lower price. When the listing agent presents the offer to the seller, they can tell their seller you are willing to go higher. So the seller immediately counters your offer with a higher price.
Most buyers don't realize this, but walking into a new home community without a real estate agent can be very costly. That's right, the salesperson at the model homes represents the builder/seller, not you the buyer. So this salesperson has a fiduciary duty to get the builder the highest price possible for the new home.
If the buyer goes to a new home community by themselves and falls in love with one of their models, then they call their agent to meet them there can be disastrous. Most builders will not allow this even if the buyer did not register with the new home subdivision on their first visit. Once you cross that threshold in a new home community, the builder will not allow you to be represented by an agent.
Although the "Buyer Broker Exclusive Employment Agreement" is not standard practice, they should be. This is an agreement between the buyer and the real estate agent which discloses responsibilities and fiduciary duties between both parties. As a buyer, don't you want to know your agent is representing you "exclusively" and the agent will due their due diligence in offering you the best service possible? The agreement by no means forces a buyer to purchase a home, but rather an agreement that discloses loyalty between the buyer and their agent.
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