If you’re in the market to buy a home, you’ll need the services of an experienced real estate agent to help find the perfect home for you. These professionals will work within your budget and keep your needs and wants in mind to narrow down the perfect properties for you to look at.
But part of the process of carrying out a real estate transaction is signing a Buyer Representation Agreement. If you don’t sign this contract, you’d be doing yourself a disservice if you refuse to sign this agreement from the start, for several reasons.
Read on to find out some of the risks that you may be exposing yourself to if you don’t sign a Buyer Representation Agreement.
1. You Won’t Be Exclusively Represented
If you don’t sign a Buyer Representation Agreement, your agent won’t owe you a fiduciary duty in a real estate transaction. While it’s proper and morally ethical for an agent to make sure a buyer is well taken care of during a real estate deal, without a contract, the agent doesn’t legally need to keep your best interests in mind.
Instead, a signed Buyer Representation Agreement will guarantee that your agent’s duty is first and foremost to you. That means the agent will do whatever is within their legal power to get the best deal for you. While the agent may also treat the seller fairly and honestly throughout the process, you are the number one priority for your agent and brokerage.
2. You Risk Not Getting the Lowest Price on a Home
As a buyer, you’d be better off signing a Buyer Representation Agreement in order to ensure that you are the only client that your agent is representing in a deal. As mentioned, having exclusive representation means your best interests will be top of mind for your agent, and that includes during the negotiation process.
Without a signed Agreement, your agent does not necessarily have to ensure the utmost confidentiality. That means certain pieces of information that could impact the final deal may not be kept confidential between only you and your agent. If the agent is trying to act fairly and honestly with all parties, any relevant information could be shared, since they’re not solely representing you.
Instead, as an exclusive buyer client as specified in your Buyer Representation Agreement, your agent’s goal is to get you the best price and conditions. Your buyer agent will share historical sales information to help negotiate a better price, which could be a disadvantage to the seller if the “comparables” show that the subject property is overpriced.
You may not get this type of service without exclusive representation.
3. You Might Buy a House That Has Issues
Buying a home is more complicated than you think. There are a lot of moving parts, and more often than not, you don’t buy and sell houses every day. It might be once every five years or a decade. Or it’s the first home purchase you are making.
An agent is not required to perform any additional due diligence about a property unless you have a signed agreement with them. They only need to disclose the material facts that are already known or should be known.
If there is a better property, the agent does not need to show or make you aware of other properties that might be a better fit.
If you want to make sure that your agent works only for you and is dedicated to keeping your best interests in mind, signing a Buyer Representation Agreement is a good idea. In fact, once you’ve found a solid agent, you’d be well-advised to sign that contract right from the get-go.
When you’re ready to start the house hunting process, reach out to the Kevin Yu Team!