Do I Really Need a Buyer's Agreement?

An Exclusive Buyer's Representation Agreement (also called the Exclusive Right to Purchase Contract) is a legally binding contract between you (the buyer) and George Sykes, a licensed real estate broker. It appoints the broker as your exclusive representative to help you find and purchase a home in the Illinois side of the St. Louis metro area, or the area defined in the contract (for example, Maryville, IL or the 618 area).

Under this agreement:

• ✓ The broker provides full professional services, including searching for properties, advising on pricing and market conditions, writing offers, negotiating, and guiding you through inspections and closing.
• ✓ You agree to work exclusively with that broker for a set period of time (discuss the timeline with George).
• ✓ If you purchase a home during that period, even if you found it on your own, the broker is entitled to compensation as outlined in the agreement.

This contract ensures the agent works solely in your best interest (fiduciary duty) and protects their time and effort in representing you.

How does a Buyer's Agreement work?

1. 1

   You and the agent discuss your needs, budget, and timeline.

2. 2

   You sign the agreement, which spells out:

   • ✓ Services the agent will provide
   • ✓ Length of the agreement
   • ✓ How the agent will be compensated (usually a percentage of the purchase price)
3. 3

   The agent searches the MLS and other sources, shows you homes, writes offers, negotiates, and handles the transaction.

4. 4

   You can request the seller to pay all or part of the fee through a concession in your purchase offer (see "Who pays commissions" below).

The agreement does not require you to buy a home. You can walk away if you do not find the right property.

Is it required?

Yes, in most cases a signed Buyer's Agreement is required if you want an agent to:

Without it, agents cannot provide these services. However, you can still attend open houses without signing an agreement, as open houses are open to the public.

How long does it last?

The term is negotiated between you and the agent. Common lengths include:

• ✓ A week or so to make sure you and George can work well together. He will not hold you to a long-term agreement.
• ✓ 3 to 6 months (most popular for active buyers)
• ✓ 12 months (for longer searches or new construction)
• ✓ Shorter terms (1 or 2 days) for specific situations

The agreement ends when:

• ✓ The term expires
• ✓ Both parties mutually agree to terminate
• ✓ You purchase a home and the agent is compensated

Why are open houses becoming popular again?

Open houses are open to the public. Anyone can attend without signing a Buyer's Agreement.

• ✓ Buyers can view homes casually without committing to an agent
• ✓ No obligation to sign anything at the door
• ✓ Great way to explore neighborhoods and see homes in person
• ✓ If you are already represented by an agent, let the agent holding the open house know

However, if you want the agent at the open house to write an offer, negotiate, or represent you fully, you will typically need to sign a Buyer's Agreement at that point.

Who pays commissions?

Under current rules (post-2024 NAR settlement), commissions are negotiated and not automatic.

• ✓ The seller may offer to pay the buyer's broker compensation (still common)
• ✓ The buyer can ask the seller to cover the fee in the offer (often successful)
• ✓ The buyer can pay their own broker directly (less common)

In your Buyer's Agreement, the compensation is clearly documented (for example, 2.5 to 3 percent of purchase price). Then, in the purchase offer, the buyer can request the seller to pay part or all of it.

Can I ask the seller to pay my side of the commissions?

Yes. Most Contracts to Purchase Real Estate include language allowing you to request seller concessions for your broker's compensation. Here is an example from a Contract to Purchase: