Sign Buyer Rep Agreement - Lecture 15

5. Sign Buyer’s Rep Agreement & Your Compensation

Now we get to the very important Buyer Rep Agreement. Explain the buyer rep agreement form with them and how you agree to represent them and work on their behalf. Remember we went over the buyer’s rep agreement in the First Steps to Representing a Buyer course. Educate them about your commitment to them, and set their expectation that they will also be loyal to you. Answer any questions about the agreement. Be sure they know that this is for their protection as well. Be very clear and upfront.

Buyers often ask about compensation. You will need to explain your brokerage’s policy on buyer compensation. In most states, the seller pays compensation to the buyer’s broker on behalf of the buyer, which is great news for your buyer. However, remember that is always negotiable between you and your buyer. In many cases, your buyer will not have to pay you compensation, but again that is part of the education process during the meeting. Be sure that your compensation is secured before you start working for the buyer.

In some states, it is customary to charge a buyer a small fee up front which eliminates the non-serious buyers. And some agents who charge an advance fee will refund it back to the buyer upon close of escrow. In other states, it is illegal to charge an advance fee. The fee can only be collected after work is performed. Besides checking with your broker, you are advised to consult with your state’s real estate attorney on fees charged to your buyers.

Some brokerages charge a Transaction Coordinator fee to their clients. If the Transaction Coordinator has performed work and you can account for that separately, you may ask your buyer to pay it. Check with your brokerage because there are certain requirements; for example, it must be typed in the buyer rep contract in advance. Be careful not to ask buyers to pay “junk fees” for work that was not actually performed.

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