Exclusive buyer agency agreement question

**tomyco** · 04-18-2007, 05:23 AM

In reading the Modern Real Estate Practices book on Exclusive Buyer Agency Agreement, it is a little confusing. It says that the buyer is legally bound to compensate the agent whenever the buyer purchases a property of the type described in the contract.

I thought that the seller would pay the comission not the buyer. Can someone elaborate. Thanks!

**tarheit** · 04-18-2007, 07:35 AM

It depends on the contract and how things are normally done in your area.

In many areas, the seller typically pays both sides of the comission (buyer and sellers agents). This is negotiated by the sellers' agent at the time they obtain a listing contract. However, they do not have to include any comission for potential buyer's agents. It may be traditional in many areas, but is not required (though you are not likely to get any other agent looking at the property if it's traditional in the area that the seller pays both sides)

But there are areas where the buyer pays his/her part of the comission directly.

the 'Exclusive Buyer Agency Agreement' protects the buyer's agent from being cut out of the deal. If the buyer were to go to another agent and buy a house, the other agent may be compensated by the seller, but the agent with the 'Agreement' would not. Instead the buyer would have to compensate the first agent as per the Agreement.

We rairly need to use one, but ours read such that if the seller pays the comission, the buyer doesn't owe anything. But if the buyer uses another agent or purchases a property where the we don't get paid, the comission is owed by the buyer directly. (And there are special cases where the buyer wants us to represent them, but the seller doesn't or refuses to pay any comission such as auctions and some FSBO properties. In these cases the comission would have to come from the buyer, and such an agreement would be needed)

-Tim

**Codythebest** · 04-18-2007, 05:22 PM

Usually, the buyer will pay 3% if the seller doesn't want to pay ( tough FSBO for example )
But most of the time, it's in the 6% seller side...

**tarheit** · 04-18-2007, 05:47 PM

6%/3% isn't true of all areas (there is no real standard), and commercial properties tend to be higher, as well as some land. There are also minimum fees, and some that will do reduce or flat rates on more expensive or more desireable properties (and easier to get rid of). Even a 50/50 buyer/seller split isn't consistent even in the same area.

-Tim