If you are planning to buy a home soon, you should know that there is often a lot of worked involved, including figuring out which community to buy in, the right size of house you should buy, the exact location, and most importantly the correct price. You may have to do a lot of negotiating with sellers and their real estate agents. This can get pretty stressful or overwhelming, especially if you’re a first time home buyer and you have absolutely no clue how or where to begin the home buying process. Hiring a buyer’s broker can help make the process easier and less taxing for you.
When you hire a broker, you will enter into a contract defining the legal relationship, so everyone’s roles are clearly outlined and you can avoid any possible problems. The contract outlines the duties and responsibilities of all the parties involved, as well as explains exactly what services the broker will provide. There are several different kinds of buyer-broker contracts, depending as well on which state you live in, but the three most common are as follows:
1. Nonexclusive not-for-compensation contracts. This kind of contract outlines the broker’s duties and obligations to the buyer, typically to be executed by the broker’s agent. It specifies that no compensation will be paid to the broker, and the buyer is free to retain more than one brokerage. Either party may also revoke the contract at any time.
2. Nonexclusive right-to-represent contracts. In this type of contract, compensation will be paid to the broker if the broker proposes the house that the buyer eventually decides to buy, or if the broker represents the buyer. If another part pays a commission to the, this obligation is removed. These types of agreements usually may not be revoked except for specified reasons.
3. Exclusive right-to-represent contracts. This is the most common type of contract between buyers and brokers, and outlines the obligations of the broker, the relation between the broker and their agent, and the buyer’s responsibilities. With this type of agreement, the buyer may not retain the services of more than one broker, and a commission amount is to be paid to the broker even if the buyer finds another house on their own or through another broker.
When considering which type of agreement to go with, remember that there isn’t any one-size-fits-all correct answer for every buyer, so you should definitely weigh all your options. It helps to talk to friends and family who have worked with brokers before and who may be able to give you advice.
If you are planning to buy a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
