Make Buyer's Broker Agreements Work For You
Posted: Thursday, June 12, 2008
by Marci McFarland
http://www.marcimcfarland.com
One thing that home owners can balk at when considering an agent is the buyer's broker agreement (BBA). The BBA is a relative newcomer to the world of real estate and many future homeowners are leery of signing themselves into a contract with a relatively unknown quantity - their real estate agent. However, there are ways to make the BBA work for you.
Understanding what the BBA entails is imperative so that you know what is expected of you, the client, and what is expected of the agent. A BBA does not mean that you have to buy a home; it means that if you buy a home within the length of time specified in the contract, that the agent you sign with gets a commission. The nitty-gritty details of the contract, however, can vary.
Read the contract! Many misunderstandings occur because the client does not take the time to go through the contract and see if they understand and agree to it in its entirety. Ask for a sample that you can highlight and scribble on, so that you can get clarification or request a change. The time you spend on this is time you'll save on clarifying and arguing later.
When in doubt, thrash out the details. When in doubt, ask for clarification or for a rewording of the contract. It's uncomfortable, to say the least, to realize that you have to pay a commission even if you find property on your own and the agent hasn't been involved at all. Keep in mind that the agent, after spending a lot of time and gas money on showing you houses and researching properties you might be interested in, is not going to be enthusiastic about losing a commission to your "miracle house".
Don't be afraid to negotiate. A contract is to clarify what conduct has been agreed upon by the client and the agent. Anything up until you sign is negotiable, such as the length of time the contract specifies, retaining the rights to buy a "for sale by owner" property, and guarantees. Also feel free to propose an "acquaintance period" where you spend a specified time looking at properties or discussing your goals before signing on the agent.
Require a guarantee. If an agent isn't working out for you, or you are not working out for the agent, you are not going to be represented as well as you could be. When you're dealing with the amount of money most people invest in property, this is a serious issue. Get a guarantee that allows you both to walk away if things head south.
BBAs are required by many brokers before they start working for you. Since most brokers work on commission, they cannot afford to invest time and money into someone who is not likely to purchase a home with their services. At the same time, you need some assurance that your broker is working for you and you are not going to end up paying someone who did not do their job. Be informed and know what you want to see in a contract and a buyer's broker agreement can be one of your best tools for finding the house you want.
Marci McFarland is a Sarasota real estate agent with a broad professional approach. Her unique insight into the various lifestyle requirements of her clients, combined with an intimate knowledge of her service area including Sarasota golf real estate, make her an ideal choice for families and investors alike.
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