Agency & Representation: BUYER REPRESENTATION AGREEMENT EXPLAINED

Buyer Representation Agreement Explained

 This Form is a contract between a Buyer and a real estate company that gives the real estate company permission to act on the Buyer’s behalf in the purchase of a property. Assuming the Buyer is a Client of the real estate company, the Real Estate Council of Ontario (Ontario’s governing body) REBBA Code of Ethics requires that Salespeople have a written Buyer Representation Agreement presented for signature prior to an offer being presented on behalf of the Buyer.

 

GEOGRAPHIC LOCATION: This indicates the area agreed upon by both the Buyer and the real estate company, for which the Agreement is valid. It is usually the area in which the Buyer wishes to purchase a property.

 

1. DEFINITIONS AND INTERPRETATIONS: The following section defines who will be referred to as the Buyer and Seller for the remainder of the document.

2. COMMISSION: The following section establishes the commission structure for the process. It states that the Buyer understands that the real estate company (Salesperson) will be paid a fee by the company that has the property listed. If the Buyer indicates in the commission portion to pay the real estate company a specific amount and the portion offered by the company listing the property is less than what the Buyer has agreed to pay, then the Buyer is responsible for the difference. The Buyer is to be informed of the commission amount being paid by the company with whom the property is listed.

3. REPRESENTATION: The following section confirms that the Salesperson has explained the different types of agency relationships that may occur in a real estate transaction.

 

4. REFERRAL OF PROPERTIES: The following section requires the Buyer to commit to work with the real estate company for the length of the contract and states that they must inform their Salesperson if they become aware of a property of interest to them. If they do not inform the Salesperson of a property of interest that they subsequently purchase on their own, the set commission will still be owed to the Salesperson.

 

5. INDEMNIFICATION: This asserts that Salespeople cannot be held liable for the condition of the property. It is the responsibility of the Buyer to educate themselves on the condition of a property.

 

6. FINDERS FEE: This provides consent for the Salesperson to accept any finders fee that a mortgage company may offer to them. It also states that this fee would be collected by the Salesperson in addition to the stated commission. It should be noted that a specific consent will be required at the time a finders fee arises.

 

7. CONSUMER REPORTS: This states that the Buyer understands that credit checks and personal information about them may be used in the process of them purchasing a property.

 

8. USE AND DISTRIBUTION OF INFORMATION: The following section gives Salespeople the right under the Privacy Act to use personal information provided to them by the Buyer in order to assist in making the transaction happen. It also assures the Buyer that this information will not be distributed to third parties (i.e. pool or moving companies).

 

9. CONFLICT OR DISCREPANCY: If there are other schedules (additional information) added to this Agreement by the parties involved that contain something specific that contradicts what is in the text of the Form, the information on the attachment supersedes what is on the Form.

 

10. ELECTRONIC COMMUNICATION: This Agreement, if necessary, may be sent via electronic means and still be binding on all parties.

 

11. SCHEDULE(S): If a specific Form or document has been added to this Agreement, it should be indicated here.

 

The Declaration of Insurance is signed by the Salesperson stating that they carry insurance as required by the Real Estate and Business Brokers Act (REBBA).