You have saved enough money to buy your first house and believe that you are well prepared to find the best listing and then deal with the offers and counteroffers only to find out that buying a house is not that easy.
Some articles on the internet on ‘How to buy your first house?’ might make the real estate transaction look like a breeze but in reality, the real estate landscape is not that easy to navigate, especially if you are buying your first house. Finding the right listing is just one part of the job as then there are many obstacles that will be served fresh on your plate and you must be prepared to deal with them.
If not, you have the option of working with a buyer’s agent who acts as a guide and helps you to navigate through the real estate landscape. From negotiating on your behalf to taking care of the paperwork, a buyer’s agent can allow you to offload almost 99% of the hassle involved in buying your house.
But the one thing that you must be familiar with before working with a buyer’s agent is the buying agency agreement. So, let’s understand what buying agency agreement is all about.
What is this agreement all about?
This detailed and important agreement is also known as a buyer’s broker agreement and it is a type of contract made legally and that is used in the real estate world and is used between the buyer’s agent and the potential buyer.
There is nothing to worry about this agreement when you work with a buyer agency Sydney since this legal agreement is a protection for the parties involved in the agreement. For the potential buyer, the legal agreement guarantees that the buyer will work in their interest and everyone will be responsible for their own activities during the real estate transaction.
For the buyer, the legal agreement makes sure that he isn’t wasting time while working with the buyer as he might switch and start working with another buyer agency Sydney. It is the legal agreement that makes the buyer eligible for the outlined compensation along with the expenses borne by the agent during the real estate transaction if the buyer decides to switch to another agent.
Are there different forms of this agreement?
The buying agency agreement has three different forms. It is necessary for all the agreements to have a date (on which the agreement will expire) mentioned, a blockbusting statement, and a fair housing statement
Here are the three different forms of the agreement
Exclusive right to sell
Also known as a lease listing agreement, this is the agreement that you are mostly going to see. Through this agreement, the agents get the right to work on behalf of the seller or act on the seller’s behalf throughout the real estate transaction.
This also means that the buyer can’t go and start working with another seller while being under the contract. Furthermore, it is clearly mentioned in the agreement that if the deal is done before the last date as per mentioned in the agreement, the broker must be compensated.
Exclusive agency agreement
This agreement is like the above-mentioned agreement but the main thing that puts this agreement in a new category is how it outlines the compensation of the broker. This agreement makes the broker obliged to produce a tenant or a purchase. If the broker’s contribution is negligible in the sale then he won’t get any type of compensation.
Exclusive buyer agency agreement
It is under the exclusive buyer agency agreement that the right to work in the interest of the buyer is given to the broker. The broker becomes eligible for compensation only after the chosen property is sold.
The compensation in the transaction is based on this agreement and in many cases, the amount received by the broker can differ from what the buyer’s broker gets.
What must be included in a buyer’s agreement?
Working with even the best buyers agent Sydney and not having any idea about what to include in the buyer’s agreement is not an approach of a virtuous seller. Remember that the inclusions in the buyer’s agreement can vary on the basis of which type of agreement you are signing.
Although the inclusions can vary, there are some common terms and information that must be present in every agreement.
Termination rights
These rights outline how the agreement can be made void even before the term length that has been predetermined. There should be a proper reason for the termination otherwise the contract can’t be canceled. Even the compensation of the best buyers agent Sydney in case of termination is stated in the termination clause.
Term length
This section dictates the validity of the contract as to how long the contract can be considered valid. In most cases, the duration of this term is ninety days but if the parties involved in the agreement agree, the term length can be changed as per the situation.
Compensation
Usually, the seller is obliged to pay the commission to both the buyer’s agent and seller’s agent but keep in mind that this is a crucial section that every property buyer Sydney must understand. The terms and conditions regarding what will happen if the party selling the property denies making the payment or the party buying the house breaches the agreement must be included in this section.
Buyer representation and exclusivity
According to this section, the property buyer Sydney is obliged to deal with the already chosen buyer during the course of the contract.
Apart from all this, there will be a section that will include vital information like the type of property, neighborhood, price range, and even the size of the property.
By the look of things, a buying agency agreement dictates a large part of what will happen, what needs to be done, who is eligible throughout the real estate transaction and therefore, it becomes necessary for the buyer to not skim through the agreement rather understand every point outlined in the agreement.