A Buyer Representation Agreement is an employment contract that spells out the duties and responsibilities of the REALTOR® to the prospective buyer, and vice versa. It obligates the REALTOR® to be vigilant in showing or making these homes known to the buyer.
Signing the Buyer Representation Agreement does not mean that the buyer has to buy … but it does indicate a commitment that the buyer is not frivolously asking to be shown around town. The Buyer can always change their search criteria. Buyers who do not have a Buyer Representation Agreement may not get first call on new listings, and in the Nome market 2 of 5 homes are sold BEFORE they ever appear on the website!
Typically the fee will actually be paid by the listing agent, so that the buyer may only be paying a small amount or none at all. For example, if the Buyer Representation Agreement states that the Realtor expects to receive 3% commission, and the listing agent is offering 3% commission to the buyer’s agent, the buyer actually PAYS NOTHING even though he/she has signed a Buyer Representation Agreement. However, if the listing agent is only offering 2% commission, for example, then, the Buyer MAY be asked to pay the difference of 1% to his/her Realtor (the buyer agent) depending on how the agent works.
Be aware that from the Realtor perspective, they are also actively making a choice as to which buyers they want to work with. By having your agent agree to a buyer’s agency agreement you are cementing his or her fiduciary duty to you!