House Hunter, Home Buyer in New York, NY

When is a buyer agency agreement (typically) presented to the client/buyer?

Asked by House Hunter, New York, NY Thu Apr 9, 2009

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Hello House Hunter:

I typically present the buyer agency agreement to the client/buyer once a comfortable rapport has been established in advance via phone and email....which is typically prior to us actually venturing out to look at homes.

It can be a little awkward at times (depending on how reserved the buyer is), because many people are leary of signing things. However, legally it is the right thing to do to protect both the buyer and the Realtor.

If there is no buyer agency agreement signed, an agent could spend days, weeks and possibly months showing a buyer homes, only for that buyer to go and utilize another agent to help facilitate the actual purchase. That's a lot of hours, gas, mileage and due dilligence expended with no possible ROI (return on investment) if the buyer bails on you and is not bound to you.

In addition, if a buyer doesn't have a signed buyer's agency agreement in place, an agent may not be obligated from a fiduciary standpoint to represent the best interest of a particular buyer in connection with specifics homes for sale or rent.

So everyone's protected, I always encourage the buyer's agency agreement to be executed from the beginning. That way the paperwork can be out of the way, and fun part (searching for the perfect home) can begin!

If you need assistance with Monmouth County homes and/or local info, please call on me. I'd love to help you.

All the best,
Amber

AMBER NOBLE-GARLAND
Waterfront Home Expert & Short Sale Specialist
Weichert, Realtors (Marlboro~ Manalapan office)
455 Route 9 South
Manalapan, NJ 07726
917-723-5645 - cell
732-536-4400, ext 199 - office

http://www.AmberLovesRealEstate.com

"Your Reliable Resource For NJ Real Estate, Local Info & More"
1 vote Thank Flag Link Thu Apr 9, 2009
House Hunter,

Although it is not mandatory, I "usually" have the client sign the "Buyer Agency Agreement" when we first meet. It pretty much goes "hand in hand" with the CIS(Consumer Information Statement), which is mandatory, in NJ to be provided to the client prior to showing any properties. It is a benefit to both parties(agent & client) to have the agreement signed if you are planning on working with the agent. It is more or less a contract between the buyer & the agent and ensures that your agent will be working hard in your best interest and that the buyer will remain loyal to the agent. However, you should never feel intimidated or forced to sign anything if you are not comfortable. Your agent should be able to explain the "Buyer Agency Agreement" and the benefits of having this agreement signed. Feel free to contact me if you have any further questions or concerns and I will be happy to help you.

Best Regards,

Francine Einhorn
Weichert Realtors
626 Rt. 9 South
Freehold, NJ 07728
Office: 732-577-0440
Cell: 732-910-7390
feinhorn@weichert.com
http://www.homessweethomesonline.com
1 vote Thank Flag Link Fri Apr 10, 2009
A buyer's agent contract is not a mandated document (in NJ) so it can be presented at any time or not at all during a relationship with the buyer. I always tell agents not to present it the first time out because neither one of you are comfortable enough to know if the relationship will continue. I think the second or third time is reasonable. Be aware though that this agency agreement can be exclusive or non-exclusive which gives the buyer the option to work with other agents anyway. On the other hand, the Consumer Information Statement (CIS) which explains the relationship between agent and client IS MANDATORY at the first meeting. It is not a binding document though. It merely explains how the agent will work with you. I hope that helps. Good luck with your home search.

Camille Miller
Broker Owner
Just Jersey Properties
1 vote Thank Flag Link Fri Apr 10, 2009
We do not do a lot of buyer agency where I am, I wish we did but it is relatively new and the buyers are not comfortable with it, it is unfamiliar to them. They are afraid they may have to pay someone (God forbid, huh? Flies in the face of all the “Realtors should be paid by the HOUR!” posters).

I explain different kinds of agency at the first meeting and let them know they have the option of having a Realtor represent their own best interests. I have yet to sign someone up on the first outing, and would rather wait till I’ve already taken them out once or twice to see if I really want to. Where I am there are folks who think looking at houses is a fun thing to do between the wine tasting and the BBQ, and I want to know what I'm getting into also.

I would advise YOU to make sure YOU want to sign up with a particular agent by spending some time with them. If they insist they won't take you out without an agreement, tell them to just make the time period for that weekend, and say you don't commit on the first date. :)
1 vote Thank Flag Link Fri Apr 10, 2009
Hi House Hunter, although agents are encouraged to have the Buyer Agency Agreement signed at first meeting, I wait until the the buyer is ready - in other words, I wait until I have earned their trust. I explain that it is meant to recognize the "gentleman's agreement" that we have established that we are, in fact, committed to working together.

Recently I had a situation - with a buyer who found me here on Trulia - after introducing the concept of the Buyer Agency Agreement at our initial meeting, we spent a day together looking at homes. At the conclusion of our second meeting, he said "I'm ready to sign that agreement".

The agreement is meant to reflect a level of commitment to working together not a "gotcha" entrapment tool - I walked away from that interaction confident that my approach is the best one for me. His readiness to sign confirmed his confidence and trust. I have no doubt that this buyer is committed to doing business with me and I am completely dedicated to his success.

All agents are not alike and so you will find different approaches. Mention has been made of the Consumer Information Statement (CIS) - this is a state required disclosure that explains the different roles real estate agents play - any agent you interact with should present this disclosure to you at first meeting.

Good luck to you and best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Fri Apr 10, 2009
Hi House Hunter,

I usually ask my buyers to sign the agreement after the 1st or on the 2nd appointment. This way we both get to know each other and my client can feel comfortable that I will work hard for them. I would not recommend signing it upon meeting the agent for the first time because you want to "interview" the agent first.

Let me know if you have any questions.

Thanks,
Heather Daccurso
Weichert Realtors-Howell
626 Route 9 South
Freehold, NJ 07728
Office: 732-577-0440
Cell: 732-580-5309
Email: heather@heatherdaccurso.com
1 vote Thank Flag Link Thu Apr 9, 2009
Hi House Hunter, if you signed a buyer agency agreement and then purchased a home with another agent during the term of the buyer agency agreement, I believe that the "worst" that would happen is that the first agent may make a claim against the agent that assisted you with your purchase. More likely if that sale is of a property introduced to you by that first agent. Generally, these disputes remain between agents/brokerages.

I regard the buyer agency agreement as a confirmation of the "gentleman's agreement" that I have developed with my client. My broker likes to have it on file, and so I usually ask my buyer to sign it when we are writing up a contract - having said that I will tell you I am encouraged to do it at first meeting or early on. And as has been stated by prior posters, the reason is to test/confirm commitment/loyalty of the buyer. But I am of the opinion that that trust needs to be earned, and so while I may introduce the concept at first meeting, I rarely ask for it to be signed then. I am proudest when a buyer will proactively say to me, "you know that buyer agent agreement you described...., we are ready to sign it now." That tells me I have earned their trust.

Best,
Jeanne Feenick
"Unwavering Commitment to Service"
Find success at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun Dec 6, 2009
In addition it is not legal advise and can be used to clarify loyalty between the Realtor and their customer it is just an agreement in writing that the Realtor is willing to work for the customer and the customer is willing to use that Realtor. It's about LOYALTY between the Customer and the Realtor!! The terms are sometimes changed on that agreement to clarify its meaning then signed by both! The customer does not have to sign it and the Realtor does not have to use it its is an option between them and it is not LAW!!! It is a nice gesture on the part of the customer to sign it but not law we all know that.
0 votes Thank Flag Link Fri Dec 4, 2009
In the state of Minnesota is should be at first subsitive contact or the first time you meet and talk about price, terms or motivation. Agency is very confusing to most people. It s easy to understand when it is explained by a professional. I think is it only fair you know who is representing who from the start.
0 votes Thank Flag Link Fri Dec 4, 2009
At your first meeting if you want to use one or anytime the Realtor feels it needs to be used.
0 votes Thank Flag Link Fri Dec 4, 2009
Julie

Clarification, not asking in terms of rules of the law. I am aware Realtors shall not dispense legal advice.
Thank you for the broker/agent responsibility explanation...
0 votes Thank Flag Link Sat Apr 11, 2009
As a broker in Georgia, I am not offering brokerage advice but would like to comment that if any agent working under my license did not live up to their fiduciary responsibility under a buyer brokerage agreement, I would hope that I would be the first person you would contact as to make me aware so I could address the issue as I am responsible for that agent. But laws are different in every state an I am not an attorney.

Did you go to the New York Real Estate Commission's website to see if any of these questions are answered in their FAQs or by calling them.

As to questions that are legal, no Realtor should answer those - unless they have passed the bar in your area.
Web Reference: http://www.juliechapman.com
0 votes Thank Flag Link Fri Apr 10, 2009
Thank you all for the informative responses. It certainly reinforces the mutual benefits for both agent and buyer.

However, if a buyer failed to live up to this agreement, I suspect there would be legal ramifications.

What recourse does a buyer have if an agent does not deliver on their fiduciary duties?
0 votes Thank Flag Link Fri Apr 10, 2009
As already stated, this is usally done at the first meeting. That's what we call an Exclusice Buyer Agency Agreement and should not be confused with a Consumer Information Statement (CIS) which is required by New Jersey law. The CIS explains the various types of real estate representation in New Jersey. Click on the link below to see the New Jersey Consumer Information Statement for Real Estate Transactions.

http://www.jerseyshoreviews.com/nj-agency-law.asp

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Fri Apr 10, 2009
Definitely at the first meeting.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Thu Apr 9, 2009
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
The buyer agency agreement should be presented to the buyer at the first meeting. The agent must give the buyer the state mandated Consumer Information Statement. This should be done at the first meeting. It would make sense to present the Buyer with buyer agency agreement at that time. The agent has a duty to keep in touch with the buyer and to keep the buyer informed of all new properties that become available.
0 votes Thank Flag Link Thu Apr 9, 2009
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