In the “Non-exclusive Buyer Agency Form” there is a section at the end of the form for an “Oral Buyer Agency Agreement”. If that section is checked and signed it verifies that the Buyers have received the required disclosures without the form being completed, and it is permissible to show properties to Buyers.
There are two types of Buyer Agency contracts. They are “Non-exclusive Buyer Agency” and “Exclusive Buyer Agency”
In “Non-exclusive Buyer Agency” you agree to work with the agent only on the properties he shows you, and to make the offer on the property you choose to purchase through him. There is no Brokers fee that may be charged to you unless you sign an additional agreement that specifies the terms of the compensation to the Broker, except for the situation described in the last paragraph of this section.
In “Exclusive Buyer Agency “ the contract applies to any property that the Buyer purchases and specifies the amount of compensation the Broker is to receive in the event of a sale.
In either situation, any offers that you make on properties that you viewed with an Agent that you have a Buyer Agency Contract with, should be made through that Agent. The Buyer Agency contract is a two-way proposition. In addition to the agents having a fiduciary responsibility to the Buyers, the Buyers agree to be loyal to their agent. This helps to prevent situations where agents show Buyers properties over several weeks only to have another agent such as “Uncle Louie” or “their brothers best friend” present an offer to the Sellers on one of the properties they viewed with their agent.
In the event that you would use a different Agent to present an offer on properties that you viewed with your Buyer Agent, and it is accepted, you may be liable for paying the commission for the “Buyer Agent”.
In most cases there is no charge to the Buyer for representation because the compensation to the selling agent still comes from the agreed commission split in the listing contract and is paid by the Seller. However if you agree to different terms in the Buyer Agency contract that you sign, you may be responsible for paying part (or all) of your Agents Commission.
A Buyer Broker Agreement is a written contract between a Buyer and a Broker that gives the Buyer representation in a real estate transaction. After consumers have read, understand, and sign the consumer notice they will be asked if they want to enter into a business relationship with the agent. By signing the Buyer Broker Agreement, consumers hire the agent to work for them and look out for their best interests in a transaction. The licensee now has a fiduciary responsibility to the Buyers. Pennsylvania law requires that a business relationship between Buyers and Broker be in writing and signed by the Buyers.
Previously many Buyers were not aware of how agency laws worked. They thought that the agent showing them property was their agent and they disclosed information to the agent that was not in their best interest. However that agent was working with the Buyers, not for them. Any information, which Buyers gave to the Agent, had to be given to the Sellers because the fiduciary responsibility of the Agent was to the Seller. As the public became more aware of this arrangement, complaints were made to Real Estate Commissions and lawsuits were filed.
As a result, in November of 1999 the Pennsylvania Real Estate Commission passed legislation requiring Real Estate Agents to present to Buyers/Tenants and Sellers/Landlords a Consumer Notice at their initial interview. The Commission requires the form to be signed, and kept on file for inspection by the Commission, to insure that each consumer has received the information about representation in a Real Estate Transaction before any confidential information is disclosed
Many of the laws in place in our country atthe present time are derived from “Old English Law” Under the legal system at that time when an agent signed a contract with an employer he owed the employer a fiduciary responsibility (where his loyalty lies) and was obligated to protect his interests at all times. This “agency law” applied to Real Estate. Licensees who listed property for sale had a signed listing contract with the owners owed the owners a fiduciary responsibility. In addition to the listing agent, all the agents in the listing office and all other agents who showed the property to prospective Buyers were agents for the Sellers and had a fiduciary responsibility to them.
The consumer notice explains the different duties and responsibilities that an agent has to consumers, and that consumers may enter into an agency relationship with a Licensee. It gives the Buyer notice that until a business relationship is selected by signing a written agreement, the licensee isnot representing him and any confidential personal or financial information should not be disclosed to the agent. Because of Agency law the licensee represents the Seller. The consumer notice is not a contract and does not bind the consumer in any way.