What is a Buyer Broker Agreement
The Florida Buyer Broker Agreement PDF in Safety Harbor Florida
A Buyer Broker Agreement is the contract that is signed between a buyer and his agent. The agent commits to represent the buyer in any purchase of real estate. The buyer also agrees to work with the agent and not go to any houses or developments without the agent to not end up paying two agents commissions. The residential buyer broker agreement provides points of a real estate transaction where the buyer accepts responsibility for not being properly represented in a real estate transaction. The buyer also gives up certain rights that could be exchanged for the agents utilizing their expertise , talent, and knowledge at certain points during a real estate transaction where a bad outcome could cost the buyer money and time. It also gives the agent certain rights such as commission. To keep it simple, the buyer broker agreement is used so that everybody involved knows their roles and how the money is earned.
Key Components of the Florida Buyer Broker Agreement
Typically, a Florida buyer broker agreement outlines the following key elements: Obligations of both Parties: The Florida buyer broker agreement usually stipulates that the lender will work to find the best property for the borrower, and that the client has a responsibility to adequately disclose all necessary information to the lender. Duration of the Agreement: This section outlines the amount of time the Florida buyer broker agreement is in effect. It usually begins when the client signs it and lasts for a specific period. Both parties can agree to extend this period if necessary. Compensation: Florida buyer broker agreements generally specify how your lender will be compensated for their services. It stipulates that the broker will be compensated by a commission of the sale and can outline when they will be paid based on closings, etc.
Advantages of Utilizing a Buyer Broker Agreement
For brokers, the use of a Florida buyer broker agreement can help set clear expectations with their clients and deliver a better experience to each. When you’re clear at the beginning of the process about what is expected from your buyer and what your responsibilities to them are, you don’t have to worry so much that your relationship will sour because of unmet expectations.
As mentioned above, clear expectations are not only beneficial to your clients but also for you. By setting clear expectations, you can avoid disruptions to your efforts or expectations down the road. For example, let’s say you signed an exclusive agreement with a client but they don’t actually need the entire six months to find what they’re looking for. If you end the exclusive agreement after three months, then you get a commission for any sale during that period but no commission for any sales that take place after that. This is beneficial because it incentivizes buyers to make some buying decisions and focus more on the sales process than leaving you to do all of the work of finding suitable properties.
If you were merely using a non-exclusive buyer broker agreement, the legal protections in an exclusive agreement wouldn’t be there (covered earlier). However, if you’re both able to make the desired progress in a reasonable period of time, a non-exclusive buyer broker agreement makes sense.
How to Obtain a Florida Buyer Broker Agreement PDF
Accessing a Florida buyer broker agreement PDF is as simple as going online and searching your state’s real estate association or board of realtor websites. The National Association of Realtors has an excellent website (www.realtor.org) as do all state realtor associations. Once on a state realtor association website, hit the search button and type in buyer brokerage agreements. Most often, you will come to a page where you can download an official or sample Florida buyer brokerage agreement in PDF format. Please keep in mind that each state is a different government entity and thus you should always check your state government website for the most up to date and official versions of state real estate forms.
Potential Issues and Considerations
Even though the Florida Buyer Broker Agreement PDF has been used for years in the state, there are some common pitfalls that can lead to unnecessary misunderstandings or disputes. One mistake many people make is assuming that the Buyer Broker Agreement is the same as a contract to purchase a property. It is actually a type of employment agreement between a buyer and their agent. This distinction is important because it can affect the terms of your agreement, the length of the agreement, and what happens if the buyer finds a property on their own.
Another mistake made by buyers is entering into the agreement without fully understanding what they are agreeing to. In general, the agreement gives the realtor the right to receive a commission in the event that the property is purchased by you or someone with whom you are associated . No commission will be paid if you do not purchase a property through your real estate agent during the term of the agreement.
Parties also often neglect to review the online version of the Florida Buyer Broker Agreement before signing. The Florida Buyer’s Agent Agreement PDF may not be the most recent version. If in doubt, ask your realtor to provide you with a hard copy of the latest form. Although the form itself is standard across brokers, terms may vary from one brokerage to another. These differences may change your obligations, including the amount of commission due, the period covered by the agreement, and your ability to purchase a property on your own.
As with any contract, if there are any special provisions that you would like to include, speak to your agent about whether they are included in your existing agreement or if a new agreement should be written.
Legal Considerations and Compliance
The legal landscape regarding buyer broker agreements in Florida is subject to the rules and guidance provided by the Florida Real Estate Commission (FREC), and influenced by federal regulations such as the Real Estate Settlement Procedures Act (RESPA). These statutes obligate brokers to act in their clients’ best interests and to provide clear disclosures.
In the past, some real estate transactions did not require a written agreement between the buyer and the broker, which left brokers vulnerable to liability for undisclosed fees or conditions not explained up front. However, that changed with the introduction of Florida Statute. Section 475.278, which states that to be enforceable, an authorization for services between a broker and a buyer must be in writing.
To comply with this statute, real estate agents and brokers in Florida must:
To ensure adequate protection, it’s strongly recommended that buyers and their brokers consult the most current version of the Florida Broker Agreement, as well as the Florida REALTOR® Standardized Forms. Staying abreast of legal changes and industry standards will help to ensure that both parties’ rights are protected, and that a mutually beneficial relationship is established.
FAQs
In Florida, is a buyer broker agreement the same as dual agency? Not necessarily. The key feature of a buyer broker agreement is that it guarantees the buyer representation by the broker (and agent), which means that only one real estate agent has the loyalty and fiduciary obligations that the Florida Realtor Association (FRA) asks for in its Code of Ethics. Most of the time the Representation Agreement will ensure that the buyer is not being pushed toward any specific property, nor is the purchase of a specific property skewed in any way based on the commission the realtor will earn from his represented sale of the listing to the buyer. A dual agent generally aligns with the seller to close the deal, which means the buyer is not guaranteed representation the way he is with a buyer broker agreement.
What happens if I do not sign a buyer broker agreement? Whether or not to sign a Buyer Broker agreement is optional for buyers, so there is a choice. The option to not sign a Buyer Broker Agreement does mean that buyers will not have sole representation by one realtor (i.e. , one company’s licensee). The buyer can choose to go it without exclusive representation to get into a bidding war. But a bidding war usually involves a desire to buy a home in a specific area, so perhaps the agent best suited to guide a buyer’s choices for a competitive bid is an agent who focuses in the particular real estate market. Buyer beware: in many Florida markets, realtors will show homes without getting a signed Buyer Broker Agreement, so they aren’t legally bound to represent you in any negotiations, or even protect your time and investment in your home search. Check to see if the real estate company the agent works for requires a Buyer Broker Agreement before you decide to work with them.
If I do not sign a Buyer Broker Agreement, do I still get protected by the Board of Realtors code of ethics and Fair Housing laws? Yes. The Board of Realtors Code of Ethics and Fair Housing Laws are in place to protect all consumers, not just clients. However, signing a Buyer Broker Agreement will guarantee exclusive buyers’ representation by a realtor and their real estate company.