As a potential homebuyer, it’s important to understand the legal agreement you may be asked to sign with a real estate agent: the buyer’s representation agreement.

In short, a buyer’s representation agreement is a contract between the buyer and their real estate agent that outlines the terms of their working relationship. While it may seem intimidating at first, it’s important to remember that this agreement can protect both you and your agent throughout the homebuying process.

So, what exactly does a buyer’s representation agreement entail? Here are some key things to know:

1. It establishes the terms of the relationship between you and your agent.

The agreement will outline the length of time you’ll work together (usually several months), the agent’s commission rate, and the agent’s responsibilities to you as their client.

2. It ensures that the agent is working in your best interest.

By signing the agreement, the agent agrees to represent you exclusively in your home search. This means they’ll be looking out for your best interests, rather than those of the seller or any other parties involved in the transaction.

3. It clarifies how the agent will be compensated.

The commission rate should be spelled out clearly in the agreement, so you know exactly how much your agent will be paid once the sale goes through.

4. It outlines the steps you’ll take together throughout the homebuying process.

The agreement should detail the various stages of the homebuying process, from property search to closing, and establish what your agent’s responsibilities will be during each step.

5. It can be cancelled if necessary.

If for some reason you’re unhappy with your agent’s performance, the agreement should include a clause that allows you to cancel the contract with reasonable notice.

While a buyer’s representation agreement may seem like just another piece of paperwork to deal with during the homebuying process, it’s actually a crucial document that can protect both you and your agent. By understanding the terms of the agreement, you can feel confident that you’re working with a professional who has your best interests at heart.