Pinetop White Mountain Blog

Good Morning Everyone,

If you are selling a piece of property and you want an Agent and a Brokerage to represent you with the marketing of your property, you wouldn't think a thing about signing a document giving that Agent and Broker the "Exclusive Right to Sell" your Property.  Everyone is familiar with the term  "Listing" when referring to a contract to sell their property, but did you know that there is also an "Exclusive Employment Agreement" for a Buyer?  

Buyer Brokerage has been around for a long time but it hasn't been widely used.  It may be a lawful requirement in some States, but in Arizona it has never become a requirement under State Real Estate Law.  However, whether required by Real Estate Law or not, as a Buyer you have the right to ask for Exclusive Representation by a Broker, and the Broker has the right to ask you for loyalty and commitment for representing you in a Buying Transaction. 

As the market has shifted to a Buyer's Market and the Market is currently dominated by the Bank Owned Properties and Short Sales, you are probably going to find that more Brokers and Agents will be asking you to sign a "Buyer-Broker Exclusive Employment Agreement". You may be asked to pay an up front retainer and commit to paying the difference between what the broker considers fair compensation for representing you, and what the seller is willing to pay on the listing side of the transaction.    

Why? The answer is simple economics.  With the Prices continuing to fall, the very competative pricing on the Bank Owned Properties, and with Short Sales being commonplace, the Brokers have no choice but to ask the Buyers to contribute to the Compensation paid to the Broker for representing the Buyer.  The Asset Managers handling the Bank Owned properties, and the Banks working with Sellers on Short Sale Agreements, are asking that the Agents involved in the transaction contribute to the sale of the property by cutting their compensation from the seller.  These transactions are complicated and fraught with risk.  The Brokers do not feel that they should be asked to do more work and assume more risk, and then share in the losses being suffered by the Banks.  As Buyers, you are getting some great deals out there, but the Brokers representing you are absorbing the losses and assuming the risks in the transactions. 

Don't be surprised the next time you go to a Real Estate office to inquire about buying a property that you are asked to Sign a "Buyer-Broker Exclusive Employment Agreement" and to put up a retainer much like you would for an Attorney or other Professional.  As markets change so do the rules of the game.  If you want an Agent to assist you through one of these complicated transactions, you will likely be asked to contribute to their pay for the service.  Remember, most Agents and Brokers sell Real Estate to make a living and to support their families.  The compensation they receive for assisting you with your purchase is what put's food on the table to feed their families.

Happy Home Searching!  Have a Great Weekend.  

Sandra Paulow, Associate Broker, GRI  (928) 242-0300