It has been quite a while since I wrote about Buyer’s Agency… or having a Buyer/Broker Agreement (BBA) with the agent that helps you find a home. So, it’s time…
What is a Buyer/Broker Agreement?
Simply put, it is a contract between a buyer and their agent to clarify for whom the agent works for. Don’t let the contract part scare you off immediately. Truthfully, Seller’s Listing contracts are much scarier.
But, here is what you need to know. In the absence of a BBA, the agent that has driven you around and bought you lunch and made friends with you… doesn’t work for you or in your best interests. They want to… but they don’t. They are working for the seller. Trust me, your agent doesn’t want to work for the seller. They probably don’t even know the seller. But, agency law holds that they “owe loyalty” to the seller unless there is a BBA in place.
Now, in GA, like in many other states, the laws have been changing, and aren’t as clear as they used to be. But, the fact remains that the only way to insure that the agent you have been working with when you buy a house is working FOR you is to have it in writing. Trust me, your agent WANTS a BBA. But, many are scared to broach the subject. That is a whole different post…
Should I be worried about anything?
Frankly, yes. There are a couple of things that you do want to keep in mind. Don’t step into it blindly just because they bought you lunch or drove you around in their spiffy car.
- Is there an exit clause?
That may be the biggest thing. What if this agent turns out to be a dud? You need to make sure that there is a way out of the contract. This isn’t a marriage (for life), it is a business arrangement. Please note, as an agent, I want to give you service that keeps you as a client for life. but, I want you to come back for your next transaction because you want to.
You should be able to leave the relationship by giving the agent notice. And you shouldn’t have to pay them anything to do that. There is one reasonable exception, and that is that if you buy a property that the agent found for you, they should be paid for it… they did their job.
- Compensation…
I’ll admit, this is what scares most buyers (and agents) looking at a BBA, but it actually isn’t that scary. Here in GA, the VAST majority of the time, the buyer’s agent is paid by the seller at closing. So, it just shouldn’t be a huge concern. There is still a danger zone, though. And that revolves around how much. As an agent, I have to tread carefully around this for a blog post because of anti-trust laws. I can’t collude with other agents for a particular rate… so I will not quote rates. 
When wandering through the MLSs, as agent we can see what the seller is offering for a buyer’s agent. The vast majority are offering X%. There are a few that are higher, and a few that are lower. I know that when I write a BBA, I use the most popular commission rate. If a particular home offers a lower rate, I have a conversation with my client about that property. Often, the rate in the BBA can be negotiated into the deal. If it can’t then we have another conversation to determine what we are going to do.
The bottom line is that I would not want that to get in the way of a buyer getting the property that they want. And it hasn’t yet. I think that most agents feel the same way.
The bottom line…
If you are buying property, you NEED a buyers agent, and you need a BBA. You need to talk with your agent about the language in their BBA to make sure that you aren’t stuck if you get a dud. And you need to talk with your agent about how and how much they are getting paid. Laws and customs may vary by area… so talking to your agent is always a good idea.
photo credit: Ruth L