We recently met with a real estate agent who discussed what she called “buyer agency” with us. The contract she wanted us to sign committed us to using her as our agent if we buy a house. If we sign the contract, does this mean if we find a home we want to buy that is not listed with a real estate agent , that we need to pay her?
The contract you’re referring to is called a “Buyer Agency Contract” and the answer to your question is “yes.” If you sign a buyer agency contract with a real estate agent, you are agreeing to use that agent and pay her for any home you purchase during the contract dates, no exceptions. Signing it makes sense if you’re sure of the area you want to purchase in and have found a buyer’s agent who you feel comfortable with, who will work hard for you and who knows the area.
However, if you have not decided where you want to live, you may want to wait until you have narrowed down your search. Any agent who shows you a home can serve as your buyer’s agent. Without a contract, you have the latitude to look for homes in different areas and use the agent you feel knows the most and works the best with you for the particular home you chose to purchase.
If a home is listed with a real estate agent, it is customary for the listing agent to split her commission with the buyer’s agent. In that situation, the buyer’s agent gets paid by the commission promised to the listing agent (which comes from the seller). However, if a home is being sold by the owner who is not using an agent, the buyer who has signed a buyer agency contract must either agree to pay his agent out of pocket or convince the owner to pay her.