FAQ's about Buyer Brokerage

Q. What is Buyer Brokerage? 

A. Simply put, it’s a signed agreement between a Buyer and a Realtor used when looking to purchase a property. There are 3 types of Buyer Brokerage Agreements: Exclusive, Non-Exclusive and Customer Status.

Q. Why do I need to sign a Buyer Brokerage Agreement?

A. Short answer is that it’s required by RECA. Longer answer is when you hire a Realtor’s services to purchase a property, you are hiring them for their expertise, knowledge and experience. The best way to explain this new relationship is by outlining the terms in a service contract, thus ensuring all parties are aware of their expectations, duties and responsibilities.

Q. When do I have to sign a Buyer Brokerage service contract?

A. The actual answer to that is “at your first convenient opportunity”. I suggest you consider signing it sooner that later to ensure you’re getting the best service possible.

Q. Who benefits from an Exclusive Buyer Brokerage Agreement?

A. Both the Buyer and the Realtor benefit from signing an Exclusive Agreement. Think of this like a marriage of sorts. When you're in a Non-Exclusive Agreement, it's like you and your Realtor are causally dating but when you're in an Exclusive Agreement, it's like you're "married" for the timeframe stated on the Agreement. The Buyer has peace of mind that the Realtor is working hard to find them the perfect property and the Realtor is happy to work hard for that Buyer knowing their work will pay off in the end.

Q. What is/are the difference(s) between an Exclusive and Non-Exclusive Buyer Brokerage Agreement?

A. Short answer is nothing aside from how the Agent’s commissions are to be paid. Long answer is that an Agent and a Buyer have the same responsibilities in both agreements, but in a Non-Exclusive Agreement the Buyer is not responsible for the Agent’s fees. In an Exclusive Agreement, the Buyer may opt to cover any shortage in fees for their Realtor's services.

Q. What does a Customer Status Agreement entail?

A. No one owes any duties to the other party in a Customer Status relationship. It basically states that the Buyer is unrepresented and the Realtor owes them no fiduciary duties, will not advise, give opinions, etc. The Realtor can only provide facts and stats and provide the paperwork and accounting in this case.

Q. Can a Buyer get out of an Exclusive Buyer Brokerage Agreement?

A. Yes, both the Buyer and the Realtor are able to request a Termination which is signed by all parties on the original Agreement. If this is a concern for you, don't hesitate to discuss it with your Realtor at any time.