A Buyer Agency Agreement is different from the Property Showing Agreement we just covered. The Easy Out Buyer Agency Agreement you provided authorizes a Five Star Real Estate agent to represent the buyer in purchasing properties, including providing negotiation and advocacy services throughout the transaction. The form specifically states that it establishes an agency relationship between the buyer and Realtor.
Because this agreement establishes representation, buyers should understand its scope, how long the agreement lasts, the compensation terms, the protection period, and how the agreement can be canceled. These terms are spelled out in the agreement and should be reviewed before signing.
What Is the Easy Out Buyer Agency Agreement?
The Easy Out Buyer Agency Agreement authorizes the Realtor to represent the buyer when purchasing property. The agreement describes that representation as including negotiation and advocacy services throughout the transaction.
Unlike the Property Showing Agreement, this document does establish an agency relationship between the buyer and Realtor. The fiduciary duties associated with that relationship are disclosed and documented on a separate agency disclosure form.
What Types of Property Does the Agreement Cover?
The agreement states that its scope covers all listed and non-listed properties.
The form specifically provides examples that include residential property, commercial property, vacant land, new construction, and for-sale-by-owner properties.
That makes this section important to review because the agreement isn’t written as applying only to homes found through the MLS.
How Long Does the Buyer Agency Agreement Last?
The agreement contains spaces for a specific beginning date and ending date.
According to the form, the agreement begins on the date entered and automatically ends at 11:59 p.m. on the specified ending date or upon the closing or termination of any then-pending transaction, whichever is later.
Buyers should therefore review the dates entered into their particular agreement rather than assuming how long the representation will last.
How Does the Agency Disclosure Relate to This Agreement?
The Buyer Agency Agreement states that the fiduciary duties of the agency relationship between the buyer and Realtor are disclosed and documented in a separate disclosure form.
That’s the Disclosure Regarding Real Estate Agency Relationships we covered earlier in this series.
The distinction between these two documents is important:
The Agency Relationships Disclosure explains the nature of the agency relationships and specifically says that disclosure is not a contract for agency services.
The Buyer Agency Agreement, on the other hand, establishes the agency relationship between the buyer and Realtor.
How Does Buyer Agent Compensation Work Under This Agreement?
This is a section buyers should review carefully because the agreement establishes the compensation terms between the buyer and brokerage.
The form provides spaces for an agreed percentage of the sales price or a flat fee, along with a space for a Broker Administration Fee. The agreement states that this negotiated compensation is due upon the successful closing of a transaction.
The agreement also authorizes the Realtor to negotiate with the seller or listing brokerage for compensation due to the buyer’s brokerage firm on the Purchase Agreement.
What If the Seller Doesn’t Offer Enough Compensation?
The agreement specifically addresses this situation.
If no compensation is offered, or the amount offered by the seller to the brokerage firm is less than the amount agreed upon in the Buyer Agency Agreement, the form states that the Realtor may choose not to show or represent the buyer in purchasing the property, or may amend the compensation terms of the agreement.
The form also states that MLS participants may not receive compensation from any source that exceeds the amount or rate agreed to in the Buyer Agency Agreement.
Finally, the agreement specifically states that the broker fee is not set by law and is fully negotiable.
What Is the Protection Period?
The Buyer Agency Agreement contains a Protection Period.
The form provides a blank where a specific number of days is entered. It states that the brokerage firm will be owed the agreed broker compensation if the buyer, or someone acting on the buyer’s behalf, purchases, exchanges, or signs an option agreement regarding properties serviced under this agreement within that specified number of days following expiration of the agreement.
Because the number of days is entered into the individual agreement, buyers should review the actual number shown on the document they are signing.
Can the Buyer Agency Agreement Be Canceled?
Yes, under the cancellation provision contained in this particular agreement.
The form states that the agreement may be canceled at any time by either party by providing the number of days of written notice entered into the agreement.
Again, the notice period isn’t something we should generalize. The agreement contains a blank for the number of days, so the actual notice requirement depends on what is entered on the signed agreement.
What Are the Additional Terms?
Near the bottom of the agreement is an Additional Terms section. This provides space for additional provisions that may be agreed upon between the parties.
Because additional terms can affect the agreement, buyers should review anything entered in this section along with the standard printed provisions before signing.
What Are You Acknowledging When You Sign?
The agreement concludes by stating that by signing, all parties acknowledge their understanding of and agreement to these terms. Signature and date lines are provided for the Realtor and buyer or buyers.
The key takeaway is that this isn’t simply permission to show homes. Unlike the Property Showing Agreement, the Easy Out Buyer Agency Agreement you provided establishes an agency relationship, sets the scope and term of that relationship, addresses brokerage compensation, establishes a protection period, and contains a cancellation provision.
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Related Michigan Real Estate Forms
- Agency Relationship Disclosure
- Property Showing Agreement
- Real Estate Forms Hub
- Affiliated Business Arrangement Disclosure
- Michigan Regional Purchase Agreement