I understand that it is important to have a written representation agreement when a buyer is represented and that it is necessary for a broker to have a written agreement signed by the person who agrees to pay a commission to enforce this right with a client. But why should I worry about this fee issue, given that in my market, the seller`s agent almost always pays the broker`s fees cooperating among MLS housing offers? A relationship between a broker and a client can legally exist without a written document. However, there are four good reasons why a broker-client relationship should be written, whether with a buyer, seller, landlord or tenant: The duration of the contract term. I often do three months. If a buyer does not buy for another six months or does not realize a new building that can last up to a year, I will do a period of six or twelve months. It is quite negotiable. There are ways to end representation before the end of the period. 14. ATTORNEY`S FEES When I declare the buyers` representation agreement to clients, I often jokingly refer to the “losing clause” – it actually says that if one party is late and the dispute enters into a dispute, the party who loses the case can be held liable for the other party`s legal and attorney`s costs. They do 99.9% of the time. Paragraph 11B states that your agent will first try to obtain payment from the seller. If the house is listed in the MLS, there is already an agreement for the seller to pay.

Often, owner contracts contain a section that promises to pay your agent as well. The most common exception is working with an FSBO owner. But even then, it is possible for your agent to negotiate with the seller to pay the commission. The TAR-buyer-tenant replacement agreement contains language that says that the broker will attempt to obtain payment of brokerage fees from the seller, owner or its agents, but provides that if the buyer does not receive all or part of the declared commission from these sources, the buyer/tenant is required to pay that commission (or the difference in the amount stated in the agreement and the seller of B. Owner or their representatives). This provision may also constitute a legal right to a tax of a buyer who has purchased a home during the term of the contract by using another agent to complete the purchase, contrary to the buyer`s agreement to use the broker mentioned in the buyers` representation contract. Brokers should clearly explain the buyer`s potential obligations under this paragraph of the agreement when they submit the representation contract for the buyer`s signature for the first time. The clarity of the rights and obligations of the parties in the brokerage-client relationship is one of the main reasons for a written brokerage contract.

I should also mention the most common error on the internet about buyer representation – the one that works according to the slogan: “Well, if I don`t have an agent as a buyer, the seller doesn`t have to pay a commission from a buyer`s agent, so I can get the house cheaper.” It always seems useful, but the truth is that the commission is set at the time of the listing of the property and is between the seller and his agent. This commission is paid regardless of whether there is an agent of the buyer, so that if the seller is not able to renegotiate this commission with his agent, the same amount is paid to the listing broker, so that the listing agent is actually paid more than he would have received if an agent of the buyer had been involved. . . .