Questions You Should Ask Your Real Estate Agent Before Signing A Buyers Agency Agreement

A Buyers Agency Agreement is an employment contract. It discloses commissions and fees (if any) your agent will request as compensation for their services. But most importantly, a Buyers Agency Agreement clarifies your relationship with your agent if legal issues arise during a transaction. Missouri law states that if a buyer does not have representation, then all agents involved in a transaction are agents of the seller. But, if you have a Buyers Agency Agreement, the law states that your agent has a duty to exercise care and loyalty upon YOUR behalf to promote YOUR interests. It is for both you and your agent’s protection. Here are some key questions to ask your real estate agent before signing an agency agreement.

1.  Are you a Realtor®?  Members of the National Association of Realtors®, a trade organization of more than one million members, subscribe to a stringent code of ethics and are required to take continuing education courses. This helps to guarantee the highest level of service and integrity.

2.  Are you a member of the local MLS?  It is a must that your agent be a member of this database of listings in your area. Containing thousands of listings, it is the primary manner in which your new home may be found.

3.  Will you work with a FSBO?  For Sale by Owners may be a good source to search for homes that fit your needs, however, some agents prefer not to work with a FSBO. A Realtor will not usually scan the newspaper or websites specifically looking for a FSBO, but if you find one that you wish to inquire about, ask your agent to get more information from the seller. If the seller is willing to work with an agent, then your agent’s commission will be paid by the seller, otherwise, you will be asked to pay a commission to your agent for assisting you as a buyer’s agent. 

4.  What will you charge me to assist me as a buyer’s agent?  If your agent is assisting you in purchasing a listed home, you should not have to pay a fee for their services because a Realtor is paid their commission by the seller. If you wish to purchase a FSBO, your agent should disclose up front their fee for assisting you as a buyer’s agent.  If the FSBO does not wish to pay your agent a fee, then your Realtor should disclose to you up front what you will be charged for their services.

 "Sign a buyers agency agreement to ensure your agent will look out for YOUR best interests and not the seller".

5.  Do you work as a dual agent, assisting both the seller and buyer?  Though it’s perfectly legal to assist both parties in a transaction, it’s important to understand where the agent’s obligations lie. A good agent will explain the agency relationship to you and describe his/her role in a transaction.

6.  How many clients are you currently working with?  Look for a low client to agent ratio.  An agent who has too many listings or buyers is overwhelmed and certainly can’t give you the attention you need.  There is no set number of what this ratio should be, but a good indicator as to whether or not your agent is overloaded, can be measured by how long it takes for them to return phone calls and their availability to show homes.

7.  When are you available for showings?  When and where can I reach you if I have a question?  Your agent should do their best to be available to you when you want to see a home, unless other arrangements have been made in cases where your agent will be out of town. At times, your agent may be busy assisting other buyers or sellers and may not immediately be available. This is where question #6 is reiterated. If your agent is too often unavailable, perhaps they’ve spread themselves too thin.

8.  What is your business philosophy?  While there is no right answer to this question, your agent’s response will help you assess his/her work ethics to determine if their goals and business practices are a good match with your own. Their response to question #5 concerning dual agency will help give you an idea of how they work. You can even ask what changes they would like to see take place in the real estate industry. Look for responses geared toward educating and protecting consumers. Also, ask what they like most about real estate and why they’re in the business.

9.  How will you keep me informed of current homes on the market?  It can be imperative that you be one of the first people to view a home as soon as it comes on the market.  To ensure this happens, your agent should set you up to receive automated email listings generated by the MLS.

Once you’ve interviewed several agents, decide which one you feel you will work with the best.  Sign a Buyers Agency Agreement to ensure your agent will look out for YOUR best interests and not the seller.  A good agent will work very hard to find you a home and invest many hours of their time in the process, so be loyal to them by not stringing along several agents at a time.  This is an area where too many cooks can spoil the pot.  The Buyers Agency Agreement is usually for a 3-month period, so if you don’t feel your agent is doing their job, go over your goals with your agent and reiterate your wishes.  Most misunderstandings are due to a lack of communication, so stay in constant contact with your agent to stress what you like and don’t like about each home you’ve visited.  If you still feel your agent isn’t fulfilling your requests, find out their requirements for releasing you from the agreement.

A Buyers Agency Agreement is a contract; therefore, a legal instrument.  If you do not understand it, you should consult an attorney.

P.O. Box 26, Cottleville, MO  63338
Office/Cell:  636-346-6344

All information contained herein is not guaranteed and is subject to verification.

Entering into a real estate transaction has legal consequences.
Realtors® are not attorneys.  If you do not understand the consequences associated with

a real estate transaction, you should consult your attorney.