There seems to be some wide confusion from home buyers about the Buyers Rep Agreement or the “BRA”. So in this article I’ll give you some helpful facts and information about this agreement and why as a home buyer, this agreement is in your best interest.
First what does this agreement obligate the buyer to do? By signing this agreement you have hired a real estate professional to represent you in finding a home, negotiating a great price and terms for you and following through all the steps from contract to close of the transaction. All the time with your best interest in mind. Your responsibility as a buyer is to the Realtor them to be your representative in the process.
What does it obligate the Realtor to do? The Realtor is bound by the Texas Real Estate Commission code of ethics to a fiduciary duty of protecting and advising you as a client through the home buying process from beginning to end. As a client the Realtor cannot convey any confidential information you reveal, to the seller or the listing agent. FYI, the seller pays the buyer’s broker an agreed commission rate listed on the purchase contract from the seller’s proceeds.
What if I don’t sign the agreement? You are not required to sign the Buyer Rep Agreement to purchase any home in Texas. Without this agreement you will be considered a customer and the Realtor remains a basic door unlocker and is representing the seller. So in this case the Realtor is not required to do anything except treat you fairly. No advice and no negotiations, just unlock the doors of the homes you want to see and the Realtor functions as a messenger. Remember the Realtor in this situation works for the seller so be careful what you say to the agent because he is allowed to convey any confidential information you tell him or her to the listing agent.
What if I don’t like my Realtor? You may terminate in writing at anytime. However there is a protection period, where as, if you purchase property the terminated Realtor has shown you within the protection period, you could owe that Realtor their commission. This is called the “procuring cause of sale” which means the realtor you had the agreement with was the cause for you to see the property and make a decision to purchase it. Even though you have terminated the agreement and are using another Realtor or you go direct to the seller you will still be responsible for paying a commission to the buyer’s broker.
Do I need a Buyers Rep Agreement to purchase a new construction home? It would be in your best interest to do so. Generally sales people at new home sites are not licensed and they work for the builder. By having a Realtor representation agreement you have someone to advise you, negotiate for you and protect you. In my experience a buyer that is represented will get a much better deal from the home builder than without representation. You don’t save any money by not using a Realtor when buying new construction. In fact buyers that don’t have Realtor representing them get a much poorer deal than buyers who do use a Realtor.
My advise to every home buyer seasoned or not is to hire a fulltime Realtor who assists people to buy homes as a career. I would vet them the same as hiring an attorney or a contractor. I always advise against using relatives or friends of relatives that are part time. How can you be really good at anything if you only do it 2 or 3 times a year? Buying a home is for most people the biggest investment in their lives and I suggest you hire the very best person you can find to assist you in this complicated process.