Welcome to my Home Buying Process Series. This video will be about the Alabama Buyer Agency Agreement.
This is the Buyer Agency Agreement that my office uses. As I previously mentioned, every state has it’s own Real Estate laws and I will be discussing Alabama State Laws.
Once you have selected a Realtor to be your single agent then you will want to sign a Buyer’s Agency Agreement so that the Realtor will have fiduciary duty and hold your best interests. This cannot be done without entering into a Buyer Agency Agreement.
The Buyer Agency Agreement is signed after the Realtor has gone over the Real Estate Brokerage Services Disclosure.
Here is a link to the video about Real Estate Brokerage Services Disclosure: https://youtu.be/KbTPn5poUpQ
Let’s start with the parties. The parties to a Buyer Agency Agreement are the Purchaser and the Realtor’s Broker.
Item 1 is the property desired section. If you are looking to purchase a home then I write “Residential” and then “Purchase”.
I usually write “To Be Determined” in all other areas. I do this case my buyer client decides to live in another location, increase or decreases the price range, etc, otherwise, the Buyer Agency Agreement will need to be amended.
Item 2 is the duration of the Buyer Agency Agreement. The commencement date is usually the day it has been signed and I usually do six months. However, the duration can be for whatever time frame you and the Realtor desire.
Item 3 is the condition of the property and the necessity of an Inspection. Alabama is a Caveat Emptor state which means Buyer Beware. It is up to the buyer to discover defects. I will cover Buyer Beware in another video.
The most important point is that the Realtor, in most cases, are not experts in determining the condition of the property.
It is strongly recommended that you have a property inspected, no matter what state you are purchasing a home.
Items 4 and 5 relate to how the Realtor’s Broker is paid.
Item 4 indemnifies the Association of Realtors. The seller pays the Buyer’s Agent’s commission. When a seller lists their house with a Realtor, they agree on the amount of commission paid at sale of their property. If another agent brings the buyer then the commission is usually split in half to go to each agent. Therefore, the commission fee is decided before any buyer views the property.
Item 5 is the Brokerage Fee. There are three options:
1. The Buyer’s agent will take what is agreed by the sellers and their agent and is posted on the Multiple Listing Service. The Multiple Listing Service is where Realtors enter their listings and these listings are then syndicated to Real Estate websites, such as, Zillow, Trulia, etc.
2. The Buyer pays their Real Estate Agent a flat fee, or
3. The buyer makes up the difference in the percentage of commission. Say that the Multiple Listing Services has the Buyer-’s Agent gets 2% but the Buyers Agent wants 3%. Option 3 has the Buyer coming up with the difference of 1%
I always choose the first option and accept what the seller’s are willing to give.
Also, I always put “0” where there are blanks. It is always in the Buyer’s best interest that there be now blanks in any agreement.
Now it’s time to sign! A Buyer Agency Agreement is a binding contract between the buyer and the Realtor’s Broker.
A good Realtor will work hard for you to help you find a home. The Buyer Agency Agreement is so the Realtor can represent you, advise you on pricing, and guide you along the way so that you will have a pleasant experience when purchasing your home.
I hope you found this video to be informative. If you did, please hit “Like” and “Subscribe”.
If you have any questions, please put them in comments down below and I will respond to them as soon as possible.
I am committed to realizing your real estate dreams.
Buyer Agency Agreement. Home Buying Process Ep. 4: Jana May, Birmingham Real Estate Agent