As most land agents will attest, if you want to see a potential buyer run for the hills, just ask them to sign a Buyer Brokerage Agreement. I’ve been in the real estate business a long time, and rarely have I had a client that wasn’t a little apprehensive about signing one. Buyers need to understand that their land agent will be an integral part of their real estate transaction, and before convincing themselves that their agent is out to corner them, consider the protection a Buyer Brokerage Agreement provides. It is a clear statement of the duties of both parties, and it can be terminated, by stating in writing, that you wish to terminate the relationship.
Signing a buyer’s agreement is routine when agreeing to work with a land agent to purchase land. It’s just like signing a Seller Listing Agreement with an agent when selling your land. While you do need to understand what’s in the contract and ask the right questions, it can be a good sign when an agent requests one. It lets the agent know you’re serious about buying property—which in turn makes them serious about finding land that fits your criteria.
For those not familiar with the real estate business, a “Buyer Brokerage Agreement” is a legal contract between a broker and a buyer that 1) States the buyer is exclusively working with the REALTOR® 2) distinguishes a “customer” from a “client” 3) Verifies the REALTOR® is obligated to and working for the buyer 4) Confirms REALTORS® commission will be paid by the seller 5) Indicates the REALTOR® and buyer have agreed to work together as a team and not violate each other’s trust. Please keep in mind there are different types of Buyer Brokerage Agreements, and the agreement differs somewhat in every state. For this article, I’ll be referencing the Georgia Buyer Brokerage Agreement. Buyers should understand some of the main advantages of entering into this agreement with a land agent.
Professional Representation at No Charge
As a buyer, you never have to sign a Buyer Brokerage Agreement in order to be shown property or multiple properties. However, it is important to know that the agent is not representing you until you have a signed, written agreement in hand. In the state of Georgia, it does not cost the buyer anything to have representation, and it’s to their advantage to be represented. If you do find a piece of property and take ownership, the agent’s commission will be paid by the seller. If the sale of the property does not result in a profit for the seller, then the seller is responsible for paying the commission owed to the land agent. Real estate agents work exclusively on commission and are paid by the seller upon the sale of a property.
You Become a Client Instead of a Customer
By signing the Buyer Brokerage Agreement, you have created a client relationship, meaning that your agent will represent you exclusively in the transaction. Having one person to guide you through the process, who is acting solely in your best interest, will make your search for land significantly less stressful. The agent is contractually bound to act in your best interest. The client relationship with an agent/broker provides you more help and allows information to be revealed to you in order to make an informed decision about a property. Your agent can tell you everything they know about a property and the seller, and also keep confidential information about you under wraps that could potentially hinder the sale. A buyer’s representation agreement protects your rights as a client, as REALTORS® are bound by a strict code of ethics, holding them to the highest standard of behavior in all steps of the real estate transaction.
Most land agents are REALTORS®, and have access to the Multiple Listing Service (MLS). The MLS is a large database of all the current properties for sale in the area. In addition to the MLS, the best land agents will search land for sale websites such as LANDFLIP, and tap into their network of contacts within the business. The perfect property for the buyer might be a “pocket listing”, that without the agent, a buyer would have no knowledge of otherwise. Land agents can effectively communicate with FSBO’s (For Sale by Owner) or land sellers who do not have their land listed for sale with an agent. Buyer agents can usually arrange to have their commission paid by the seller if the buyer decides to purchase the property. A professional land agent values their time as much as the buyers’ time; they will check out properties in advance and explain the ins and outs of various properties and areas. They will also be able to refer you to reliable lenders, real estate attorneys, inspectors, surveyors, and other professionals. This helps expedite each step of the land buying process and move you to a successful closing all the faster.
It Outlines Expectations- No Monkey Business
Buying land can be overwhelming, and a buyer’s agreement offers peace of mind by clearly outlining all expectations both you and your agent have for each other throughout the land buying process. It clearly defines the services the broker will provide to the buyer and the responsibilities the buyer has to the broker. Your land agent is not going to flake out on you and become unresponsive when it’s go time. Buyers agree to not seek property information, view or purchase any property without the agent. If any party forgets the terms of the agreement, they will both have a copy that they can refer to for clarity.
It’s understandable why buyers are leery about making a commitment in writing, so for this reason, most agents take potential client(s) out at least once, before asking them to sign the agreement. It takes a little time to see if you’re the right agent for the buyer. In order to ensure both parties have a pleasant experience, it is important that your personalities mesh, both personally and professionally. Think about it this way: Why on earth would you want to be represented by the agent who also represents the seller, has had a relationship with them for longer, and cannot, legally, work solely in your best interests? So, don’t be afraid of the Exclusive Buyer Brokerage Agreement! It’s designed for your benefit and protection.
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