Home Buying in Bellevue>Question Details

Brianne Jeong, Home Buyer in Mercer Island, WA

Is it customary and usual for RE Brokerages to REQUIRE buyers to sign form 41A?

Asked by Brianne Jeong, Mercer Island, WA Thu Feb 24, 2011

Recently put in an offer on a house electronically and failed to completely review all documents - listed on the 1st page were the standard contingency docs, but snuck in there was also a form 41A - the broker tells me the MLS requires this.

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Karen Mcknight’s answer
Hi Brianne,

A savvy, professional agent who is well trained, will meet with you at the beginning of your relationship for a consultation. At that consultation, the agent will ask you thought provoking questions to find out what is important to you, present how they work, their business philosophy, and details on the services they provide.

At that consultation, the agent is wise to present the Buyer Agency Agreement, explain the benefits to you, and ask for your commitment to work with them. At that point, when you both signe the Buyer Agency Agreement, you and the agent know you are both in a committed relationship and that the agent will work harder for you and provide a higher level of service.

A signed Buyer Agency agreement is to your benefit, because when an agent knows you are committed to working only with them, they are more motivated to give you 100% of their energy. Without the Buyer Agency agreement, they do not have the same level of commitment to you, because you haven't committed to them.

I think the timing of seeing the Buyer Agency Agreement is what is bothering you. I agree, it definitely feels funny to just have it slipped into a pile of documents. You may just want to have an open, honest conversation with your agent. Hopefully, after that conversation, you and the agent will feel good about committing to work with each other.

Warm Regards,
3 votes Thank Flag Link Thu Feb 24, 2011
Hi Brianne. More and more, the real estate industry is moving towards some sort of Buyer's Agency written agreement. Truth be told, when a licensed Real Estate Broker shows you a home, you and the Broker are engaging in an Agency relationship, as it's legally defined. Unfortunately, this hasn't been clearly spelled out to the general public. So, I feel like this is a good new trend in our industry. A written document, discussed and refined by both parties, helps to clearly state everybody's intentions and responsibilities. Even the standard NWMLS Form 41A has a clear and easy way to terminate the contract, should either party want to. All you have to do is provide written notice of termination.

These Buyer Agency Agreements should have a couple of things in them that make the obligations and requirements clear to both parties. Are you, as the Buyer, responsible for paying your Real Estate Broker? Some Brokers require an additional payment from their Buyer clients, beyond what the seller pays. Best to have this in writing, so there are no misunderstandings. How about some language articulating that the Broker cannot share confidential information about you with others, even after the transaction closes? The Broker will want assurance that you will be working with them from start to finish, and not take advantage of them to do the leg work of showing homes when you have the intention of having a friend or relative write up the offer. That's reasonable, given the level of responsibility and trust required in a transaction. Buying a home is an important financial and legal endeavor. Why start out the process with unclear and undocumented expectations and intentions? Best to be clear with everyone concerned, so that the likelihood of misunderstandings further down the road are diminished.
2 votes Thank Flag Link Thu Feb 24, 2011
It's not required, and is mainly there to protect your agent. I don't use this, I just don't believe in forcing someone to be loyal. Yes, I've been burned by people who flake out after I've worked hard for them, but that's ok--They end up losing more than I did.

Along the same lines, when I take a listing, I tell people they can "fire" me any time they want, even if there's time left on the contract. It's just not worth it to force someone to work with you if they don't want to.

It's my opinion that it's actually kind of rude to expect someone to commit to you before even knowing if they want to work with you. You don't get engaged on the first date.
1 vote Thank Flag Link Sun Feb 27, 2011
NWMLS form 41A is a Buyers Agency agreement. Generally it states that the agent represents you and your interests alone. You should have also received a Law of Agency form as well which explains this in greater detail. To my knowledge, NWMLS does not require this but clarifying agency is important.
What I would encourage you to look at is the term of the agreement and exclusive or non-exclusive line. Make certain you understand what each entails and that you are comfortable with each. If not, discuss it with your agent and try to come up with something you are both comfortable with.
I use these forms too, but explain them to my clients in advance, so there are no surprises.
1 vote Thank Flag Link Thu Feb 24, 2011
It's your contract. Your broker is not a party to it. You decide what goes in the contract.

I hadn't seen that form; although, my experience is short and the MLS adds rules pretty frequently.
1 vote Thank Flag Link Thu Feb 24, 2011
Without naming names, there is at least one local Brokerage that requires a 41A with every "electronic" offer. I think that is what Brianne is referring to. It is a Company Policy though, and not an MLS requirement as far as I know. It is done at time of offer automatically for that one Brokerage, and maybe others as well.
0 votes Thank Flag Link Mon Feb 28, 2011
It's not required and rather harmless to you. Unless you're using multiple agents to look at homes. Find an agent & stick with them so they can serve you to the best of their ability.
0 votes Thank Flag Link Mon Feb 28, 2011

Great answer, it really cuts to the heart of the issue.

I find it a solid business practice to advise the client what to expect when dealing with me. Yes, a handshake and a nod is great, but what happens when that falls apart? In the end, we should all feel comfortable when everything is in writing! Why would the 41a make you nervous? If you built a relation with your realtor, then, you can be assured he/she will do everything possible to make your buying experience a smooth one.

Good Luck,

Ray Garcia
0 votes Thank Flag Link Sun Feb 27, 2011
I think what you are referring to in "mls requires this" is about Procuring Cause. If you saw the home with someone other than the Agent/Brokerage you are using to buy it, Procuring Cause may weight the claim differently if the person who wrote the offer has a 41A. So I wouldn't call the person who said it a liar by any means.

If you are using lots of agents to see houses and a different agent to buy a house, that could be the trigger for the 41A being "needed". It doesn't protect them entirely against a Procuring Cause claim from the agent you saw the house with, but NAR guidelines are that Procuring Cause panels are urged to heavily weight the 41A when making a decision as to whom is due the Buyer side of the commission.

You said "making an offer electronically". Are you "electronically" buying it from the same agent /brokerage you viewed the home with?
0 votes Thank Flag Link Sun Feb 27, 2011
Dear Brianne;

Your broker is either lying or misinformed/mistaken. Either way I would seek out recourse. This is a serious and egregious attempt to to take advantage of a situation. The NWMLS does not require this form as part of a Purchase and Sale Agreement.. This type of action helps give brokers a bad reputation.

Good Luck.
0 votes Thank Flag Link Sun Feb 27, 2011
I don't use them unless it is in my client's best interest for me to do so, which is rare...if ever. Our Agency Law has Representation of the Buyer as the default position, unless I represent the seller of the home they decide to purchase. In some places a buyer needs to sign them to get "full representation", but our State is not one of those places.
0 votes Thank Flag Link Sat Feb 26, 2011
Wow, great question and a great way to see how the realtor opinions on this topic vary so much. The quick and technically correct answer is no, the NorthWest Multiple Listing Service (NWMLS) does not require that you sign the 41A.

The reason this is such a hot topic is that it comes down to a realtor's ability to have a written contract that helps to make sure they get a paycheck if they provide real estate services to a buyer. A common realtor fear (that actually happens now and then) is that while working hard to help a buyer find a home to buy, they will show a buyer many, many homes, spend endless hours, fuel, office supplies etc..., only to have a buyer walk into an open house and buy a home from that open house agent, thereby costing the first realtor a substantial loss of time, income, etc... So a part of this form's purpose is to establish a written contractual agreement that puts the exact compensation an agent wants/expects in plain view, for better or for worse.

Some folks like this form, some do not. I do not use it myself because I hope to anchor my client with my skills and charm and I also spend some time to make sure my client understands that if they write a contract to buy without me acting as their agent, I will not be able to feed my wife and 3 cats :o)

I also make sure to explain my "agenda" in our relationship. I not only want to make a paycheck one time, I want my clients to come back (repeat) and send (refer) me the business of their friends/family/co-workers/etc... I tell them plainly that if I do a lame job, they can fire me; but if I do a great job, I expect them to remember me to their pals. I tell them that the real money in real estate comes from repeat/referral business, so my goal is to make a client for life. This clarifies for my clients that while I want to make a paycheck, I need to make good, solid relationships.

So there you have it, one of many realtors, with yet another opinion, giving you an answer and a blatant plug for being a good realtor. Best wishes on your home hunt,

Chris Golden
President, Team Golden Homes
Managing Broker, RE/MAX Performance Plus
Mobile 206-412-2608
0 votes Thank Flag Link Fri Feb 25, 2011
You will/did get a lot of different opinions. Fact, it is not required by the NWMLS. It may be one of your broker's requirements for their own business model. Either way, as stated below, you or the broker can terminate the contract & part ways if need be. It's really rather harmless unless you part ways & want to buy a house they showed you, then that would be a problem anyhow even the Form 41A wasn't involved.

I personally don't currently use it. I used to many years ago. I prefer I good old solid hand shake and an verbal agreement we are working together. Trust is the beginning of any good relationship;-)
0 votes Thank Flag Link Fri Feb 25, 2011
Brianne, Of course they are not required, but highly advised, especially for the buyer. I do require my clients to use sign one right away, before we write an offer. In fact, usually before we go look at homes. It is a much more solid commitment to each other so I work much harder when I know I will eventually get paid. It also makes things clear in black & white. One thing for sure, I have had several attorneys as clients, & they will not let me work with them before we have a 41A signed.
0 votes Thank Flag Link Thu Feb 24, 2011
The MLS doesn't require a buyer agency agreement. However, many brokers do in order to protect their agents from being taken advantage of by disloyal buyers who flit from agent to agent. Real estate professionals provide a wealth of information and experience, and they only get paid for their time if and when a deal closes escrow. Signging a buyer's agency agreement doesn't mean you can't change realtors. It's just the best way to show an agent that you value their time and expertise and that in return for their services, you intend to be loyal to them. I suggest interviewing several agents and choosing one person to work with as a trusted advisor and partner in your home search.
0 votes Thank Flag Link Thu Feb 24, 2011
It all depends on the circumstance. The Form 41A is a buyer agency agreement. This is usually used when a buyer is willing to have an agent look for properties including ones that are not listed with an MLS. It specifies that there will be a set amount of commission (it could be a percentage) to be paid tothe buyers agent by buyer. If the property is listed and has a commission being paid by the seller, then there sill be no commission due from the buyer unless the amount of the commission from the seller is less than the agreed upon amount between the buyer and buyers agent. If the buyer makes an offer on a For Sale by Owner, then the buyer will owe the commisssion to the buyers agent.
0 votes Thank Flag Link Thu Feb 24, 2011
At my brokerage we are required to use a buyers agency agreement with the purchase contract but it has a differnet form number and etc.
0 votes Thank Flag Link Thu Feb 24, 2011
Some agents require buyer's agency agreement and some don't. I don't really like the 41A form, because it's unduly burdensome and complicated. When I do use a buyer agency agreement, which is less than half the time, I have a custom form which gives the client a few choices, such as whether they do want to know the SOC, etc.

There is one situation where the buyer's agency agreement benefits the buyer, but it's rather rare. If the agent happens to show you one if his/her listings, then the agent will be a dual agent and anything you told them should clearly remain confidential, including discussions about what you want to offer on the particular property. Absent that, if you slip up and let the agent know what you're willing to offer, the agent will likely convey that information to the buyer. Even so, personally I'd be reluctant to give that information in a dual agency situation.
0 votes Thank Flag Link Thu Feb 24, 2011
Jean is right, it is voluntary, and honestly it feels awkward from the agents perspective asking you to sing something right away. Weren't we all taught not to sign right away anyway!

I always explain the relationship to the client on the first meeting, as this prevents any misunderstandings about who is working for whom. If the client refuses to sign, they don't have to, I just mark down that refusal.

The regulation in your state may vary regarding disclosure.

Good Luck,
Ray Garcia
0 votes Thank Flag Link Thu Feb 24, 2011
No, the 41 A is not a requirement. It is an agreement between you and your agent. The buyer agency agreement in my opinion is like saying you aren't going to do your job with out a formal commitment. The only reason I would ever use one is if I was new and didn't trust my abilities. The buyer can always terminate the agency agreement. In over 16 years I have never used one nor do I plan to use one in the future. Just like a listing agreement, it is a servicing agreement which can be cancelled at any time.
Web Reference: http://www.shortsaleduo.com
0 votes Thank Flag Link Thu Feb 24, 2011
The MLS absolutely does not require it, however, I do think it's an excellent form to use to solidify your relationship with your broker and establish their job duties and standard of care to you. I would never hire any professional without a contract that defines the terms of that working relationship. Also, it is definitely NOT part of your offer, and should not be mixed in with any contingencies or addenda relating to your potential purchase. Your broker should be explaining forms to you prior to asking you to sign them, and in the case of the 41A, should have gone over it with you long before you were submitting an offer. That form should have been dealt with when you started working together. Best of luck!
0 votes Thank Flag Link Thu Feb 24, 2011
Hi, Brianne,

No, the NWMLS definitely does NOT require this. It is an agreement between you and the agent/brokerage
that is purely voluntary.

Jean Bradford
Managing Broker Associate
John L. Scott
Silverdale, WA
Web Reference: http://www.ohnlscott.com
0 votes Thank Flag Link Thu Feb 24, 2011
The 41A Buyer's Agency Agreement is not required by MLS or King County Realtors Association. It IS sometimes useful to clarify who is representing you in a transaction. Some offices require it as a matter of office policy. You can terminate the agreement at any time if you are dissatisfied with your agent. Mostly its just good business practice to state in writing that your agent is your agent.
0 votes Thank Flag Link Thu Feb 24, 2011
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