What is a Non-Exclusive Buyer Representative Agreement?
A non exclusive buyer agency agreement (sometimes called a non-exclusive buyer broker agreement) is an agreement we have with a buyer whereby we represent the buyer but they are free to work with other brokers as well and are not required to buy a house they don’t want to buy just because they signed that agreement.
The nature of a non exclusive buyer agency agreement to represent a buyer is that we are the buyer’s agent in the deal. We represent the buyer’s best interest . A non-exclusive buyer agency agreement is distinguished from other kinds of real estate agreements by what it does not demand. It does not make a buyer commit to purchase a home from us. It does not require a buyer to limit themselves to working only with us. It is an agreement that says we have a working relationship with the buyer to represent them if we can find a house and the buyer needs our help. This is distinguished from "exclusive" forms of agreements which are out there and require that a lawyer or real estate agent be exclusively used in order for the buyer to be represented.
Characteristics of Non-Exclusive Buyer Agreements
The most obvious feature of non-exclusive buyer agency agreements is that they are not exclusive. This means that a buyer can have multiple agents at the same time. This is a significant feature that gives buyers tremendous flexibility that is simply not available in an exclusive buyer agency agreement.
If a buyer does not know what their geographic area of interest is, or if they want to work with more than one agent, a non-exclusive agreement provides maximum flexibility.
If a buyer wants to work with multiple agents at the same time on an exclusive basis (e.g. one agent for homes in the central part of the city and one for homes in the eastern part of the city), a non-exclusive agreement facilitates that.
It is a feature of non-exclusive agreements that the buyer can terminate them at any time without having to provide notice of termination. This gives the buyer the opportunity to see if the agent provides them with the service they expect and whether they like the agent. The "kick the tires" element is a big feature of a non-exclusive agreement.
A non-exclusive agreement does not mean that there is a "golden slippers" effect. That is, while a buyer can have multiple buyer agents, they are very much discouraged from going to every single open house with four different agents.
Multiple agents at one open house is a recipe for disaster. Each of the four agents will be bringing prospective buyers to the open house, and the listing agent never knows who of those four agents is the buyer’s agent for the buyer.
One of the best ways to deal with this situation is for the buyer to notify the listing agent that the buyer has signed to be represented by an agent and that they are going to an open house. No listing agent wants to get into a fistfight at their own open house by telling your agent that your agent cannot bring you through the home as they have been hired exclusively by you.
Advantages and Drawbacks for Buyers
The good news for consumers is that in today’s market you have choices when it comes to how your REALTOR® will work with you. If you are a buyer who knows exactly what you want, have time to shop for the perfect home, and find yourself constantly working with the same REALTOR® (but don’t want a contract committing to using them exclusively) then a non-exclusive Buyer Agency Agreement may be a good choice for you. In many other cases, however, a non-exclusive agreement may NOT be the best choice.
The following are some pros and cons to think about when considering a non-exclusive buyer agency:
Pros
Cons
It’s important to note that non-exclusive buyer agency agreements can (and should) be time limited, for example, for a specific number of days or until a certain date.
Also note that in non-exclusive buyer agency contracts the REALTOR® still must disclose to you all material information regarding a property he/she is showing you.
Remember that if you choose to work without a contract, a REALTOR® need NOT show you ALL properties and you can’t expect them to spend their whole day with you while you consider each option.
Also, REALTORS® may be more willing to represent you in state-regulated dual agency transactions if you agree to work with them exclusively.
Legal Considerations
Legal considerations in the appointment of a non-exclusive buyer agency agreement
As a legal practitioner, I am very much concerned with the practical aspects of appointing a buyer’s agent. My experience is that whilst many buyers and agents may want to enter into an agreement, that agreement as drafted and as a practical guide is often not helpful for the parties.
The main problem with an exclusive buyer agency agreement is the fact that the buyer is given a very limited right to become involved with any property that the agent may have referred to them when they may possibly have other interest/s in the property. For example, if an agent sends me a property for sale that I would like to buy; I may have a conflict with the timing of the sale as I cannot both buy the house sold by the agent whilst I am concurrently selling my house through another agent. This could preclude me from buying the agent’s property.
A non-exclusive buyer agency agreement is therefore, much more amenable as it allows the buyer to make offers and understanding that the agent is working in the buyer’s best interests and therefore the seller’s best interests, though arguably there could be inherent conflict in this. The seller does not know that the buyer may have a buyer’s agent, meanwhile, the buyer is unaware of whether the agent is also working a seller’s agent for the other intended purchases.
In practice it seems that it is very common for buyers to select a property which they really like , to then appoint and exclusively authorize the buyer’s agent to sell it to them.
The practicalities of appointing a non-exclusive buyer’s agent are that the agent is fairly free to act in that capacity, without too much of a risk of conflict with other implied obligations to the buyer such as that they will find the best possible price (and have exclusive rights to that buyer). These obligations are more flexible in a non-exclusive agreement. It is acknowledged, however that the agent would have a duty to identify any properties they are aware are for sale that would be suitable to the buyer, and inform them of such properties. This will mean that the agent must keep a fairly comprehensive data base of all properties coming on the market. Often this is not the case, and empowers the agent to choose the property which the agent favours and with which they feel most compatible bringing to the buyer.
Possibly the biggest problem with leaving the appointment of the buyer’s agent as a loose arrangement, is that this may lead to legal uncertainty as to the responsibilities of the agent to the buyer. A good agreement will clearly define the roles and responsibilities of both parties, disclosing in a simple manner any commission the agent may receive in relation to the purchase, how any commission is to be split between the buyer and sellers agents. Often these intentions are hidden under the guise of an exclusive buyers agency agreement and cannot always be clear. Clearly defined roles will ensure an effectual working relationship between the parties, and will prevent future disputes.
Selecting the Right Buyer Representative
When considering a non-exclusive buyer agency agreement, it is important to properly vet the agents available to work with you on the home purchase. Some key considerations include:
Agent’s Personality/Aptitude
What personality types have you worked with in the past? Do you prefer to work with someone by phone or in person? Are you a demonstrative personality who wants frequent communication, or an analytical personality who prefers to receive information via email rather than in person? Asking the agent about their experience working with a variety of clients with different personality types may also shed some light on this question.
Agent’s Experience
Similar to matching personality types, each client can bring unique issues or concerns that the agent may not have dealt with before. Is the agent frequently exposed to a variety of buyers, or is he or she focused primarily on a niche market? Asking how he or she would respond to certain problems may demonstrate the agent’s capacity and experience with situations you are likely to encounter.
Key Questions to Ask
The following is a list of suggested questions that you may want answered before deciding on an agent to work with:
Meet at least two agents to compare their experience, personalities, and areas of focus, and make sure that the agent has experience in the neighborhood where you hope to purchase property. If you are not feeling good vibes from an agent, don’t be afraid to find a new one. Buying a house is likely to be the most expensive and stressful thing you will do, so it is important to find someone you feel confident in working with.
Myths and Misunderstandings
There are several common misconceptions that buyers may have about non-exclusive buyer agency agreements that can affect their relationship with their chosen real estate agent. The first myth is that such an agreement obligates the agent to find their home at the expense of their time. This is not true and the agent’s commitment to do this is already part of the agreement under the duties of the agent section. If you need more time than you originally anticipated, you are entitled to that as well. Your contract with your agent guarantees you exposure to all available homes on the market but does not mandate they work for you for longer than you both anticipated.
Similarly, many people believe that signing a non-exclusive buyer agency agreement means the agent will be on their payroll until they find a house. Again, this is not true. While you may both agree that your search will last a specific period of time or until such time as you reach a specific point in the process to keep things moving forward , negotiations may stall and property you may consider buying may be nowhere in sight over the next several months or even longer. Buyers can terminate their contract with an agent as can agents, so long as a mutual agreement is reached and the other agencies are notified. So in essence, you can let your agent go at any time you both agree on, no strings attached.
Another misbelief is that a non-exclusive buyer agency agreement gives your agent unlimited rights to help you find your home. That is untrue as you are free to engage as many other agents as you please if you feel comfortable doing so. There is no harm in hiring a personal shopper if you would like to go that route. It is your responsibility to advise each of your agents that you have hired multiple agents until you find a single one you feel confident in working with exclusively.