Broker Agreement

Before starting the buying process, it is in your best interest to hire a Buyer’s Broker and pay the commission if the agent is not being paid by the seller. Before California law was changed in the late 1980s to allow Buyer’s Agents, salespeople who helped buyers find houses were almost always the legal representative (sub-agent) to the seller. This led to a number of conflicts of interest. It also led to some buyers preferring to hire and pay for a Buyer’s Broker.

The best reason to hire a Buyer’s Broker is that once a Buyer’s Broker Agreement is signed, a creative and well connected agent will explore all homes and neighborhoods which meet your criteria, including those which:

are sold by owner (FSBO or For Sale by Owner)
offer a reduced or no commission to the Buyer’s Agent
have been listed but withdrawn or expired from the MLS or
are not on the market.

Most agents hesitate to show FSBOs or off market properties because many people do not understand how much work and financial investment it takes to run a real estate business and fear that buyers will go directly to the seller and lose a commission. A broker that has a signed Buyer’s Broker Agreement does not have this concern because they will be paid by the buyer per the terms of the contract.

Remember that the fee you agree to pay to the broker is offset by the amount that the seller agrees to pay to the broker who brings in the buyer. Also, the cost of commissions are factored into the pricing and strategy of the offer. This usually means the buyer pays nothing.

Buyer's Broker Agreement

Click here to download the "Buyer Broker Agreement - Exclusive Right to Represent" document.