FAQ – “I am not comfortable using the Exclusive Buyer Agency Contract but I’m tired of dealing with discount brokerages. Can I just not show these properties to my buyers?”
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, discusses agency law and why you should be using a Buyer Agency Acknowledgment if you’re not yet comfortable with a Buyer’s Agency Exclusive Contract.
Here’s a brief summary:
That listing with the low commission could be your client’s dream home!
Let’s be very clear here: Your agency duty requires you to show all suitable properties to your buyers. The only way this obligation can be modified is in writing, and there are a couple of options available.
- Buyer’s Agency Exclusive Contract
- Buyer Agency Acknowledgement
Buyer’s Agency Exclusive Contract
We do recommend that you get comfortable with the Exclusive Buyer Agency contract because it guarantees that you will get paid your expected fee for service in a situation like this.
With a Buyer’s Agency Exclusive Contract, that awkward situation will go away. If your client wants to write an offer, they either:
- Pay the shortfall of your commission, or
- You may add a clause to the contract allowing you to negotiate your commission.
Negotiating your fee involves a complex set of rules. See FAQ – Can I add a clause to get my full commission on a discount brokerage listing? for full details.
Buyer Agency Acknowledgement
If you cannot get comfortable with using the Buyer’s Agency Exclusive Contract then at the very least, have your client sign a Buyer Agency Acknowledgement form.
At common law, agency duty does not allow you to work with more than one master at a time. It would be tough making a living if you could only work with one client at a time, don’t you think?
The Buyer Agency Acknowledgement form discloses that you will be working with other buyers and sellers, and that information obtained through those other agency relationships will not have to be disclosed. That’s important protection for you.
Your buyer should be a lot more comfortable signing the Buyer Agency Acknowledgement because it does not contractually obligate them to pay any shortfall of your expected fee for service.
In saying that, the form specifically states “The Designated Agent will not be obligated to make the Buyer aware of any or all properties, which may meet the Buyer’s requirements.” So, while we know you want to find the perfect spot for your buyer, be sure to explain this clause and how it limits your duty to show properties where you will not be paid your expected selling commission.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.