Buyer Service Agreements

have seen a lot of posts in the past few days about Buyer Representation (or Service) Agreements and thought that I would write a post about what they state in Oregon and the benefits to them.

In Oregon the agreement is a set term that expires like any other contract or agreement. It can be terminated in writing at either time by either party. There is a simple section that covers what the client is looking for and the agreement only covers what is writing in this section. (EXAMPLE: If you fill the document out for residential and the agent only shows you residential but you purchase a commercial deal with a different broker this agreement isn't covered). In this section you can make it as broad or narrowed down as you wish to.

The agreement states that there will be a commission paid - this is where you should read carefully - It is usually written in as a percentage of the sales price that will be paid. If there is cooperating compensation paid by the listing broker that commission goes towards the commission in this agreement. Our company writes in a provision that if there is a commission offered by the seller there will be no additional commission due to the buyer. This is something we choose to write in our agreements but not all brokers do.

There is also a section that states what a broker is qualified to advise you on and what they are not. We are real estate professionals and we are limited to advising only on that. If a legal matter rises or advise from county or city is required we are obligated to direct you to someone that can advise you properly.

There is a section on dispute resolution stating that mediation will be the first step and then arbitration and that by signing the agreement all parties involved agree to mediation and/or arbitration.

There is a section for additional provisions - these are terms in addition to the agreement that either party may feel are relevant. This is where our company makes the choice to add in language that no additional commission will be owed above that offered by the seller or listing broker.

Then there is a signature section for all parties to sign.

I have met a lot of clients that feel brokers are always hounding them. I have clients that like to go to open houses every weekend and don't like the pressure of the broker at the open house. In these cases I explain this agreement and they love it. They sign it and carry a copy of it with them to every open house. It stops the brokers in their tracks and allows my client to feel at ease. Personally I have never had a client terminate one of these agreements, I have, had a client purchase with someone else during an agreement, but we decided to not pursue a commission.

To summarize, these forms are a formality to most and if you are asked to sign one read it throughly and make sure to add in any provisions you feel are necessary to protect yourself.