The Contract that Improved Buyer Agency Agreements
We are breathing rarified air when a new contract, form, or basic feature comes along and impacts a century-old industry. Dawn Pfaff, Broker, Appraiser, and Entrepreneur, has done just that with a genius idea and a bizarrely simple solution to the problem with Buyer Agency Agreements.
The traditional exclusive Buyer’s Agency form has declined in popularity over the last few decades because many buyers will reject the contract, which is both embarrassing and hurts an agent’s chances to represent that buyer long term. The likelihood of a buyer signing this contract is low because its language is as strong as an exclusive listing agreement’s language is, however, the buyer’s agent generally does not hold the same type of responsibility or exclusivity to his/her customer compared to a listing agent. In the digital age of real estate most buyers search for properties on their downtime using the major listing sites, Zillow, Trulia, Redfin, MyState, etc. Pfaff’s new buyer form (which can be downloaded here) retains all of the language and security of a traditional Exclusive Buyer Agency Agreement but specifies the properties in which the contract applies to.
Now is an important time for a revival of the Buyer Agency Agreement as the current pending lawsuits against NAR are likely to remove the local board’s control over buyer commissions. With this change buyer’s agents will want to be sure that they are covered and compensated for the work they do on the transaction. MLS PIN, a Massachusetts based local MLS, agreed to remove their buyer compensation rules as part of a settlement filed Friday, June 20th, 2023. “This settlement, and NWMLS’s previous voluntary move regarding seller compensation, is in alignment with what plaintiffs are seeking”, states Russ Cofano, CEO of Collabra Technology and renowned real estate industry council. “While it’s not a legal precedent, it certainly creates a business precedent that MLSs can service the real estate industry without requiring buyer compensation.” Pfaff’s form creates agency so agents and brokers can be sure they are getting compensated without having to deal with the consumer-facing downsides.
The genius of this update to a contract ‘as old as time’ is that it guarantees the Real Estate professional will not be wasting time and money on a buyer that doesn’t pan out, while still giving the buyer piece of mind that they won’t owe a commission to a particular agent if they buy a property they find themselves on Zillow at 1am!
This form is absolutely free to download and use and can be found HERE: https://www.mystatemls.com/mys-resources-and-forms/
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