Welcome back to Home Buying 101 – Throughout this series I will be detailing the various parts of the transaction process for purchasing a single family home. My goal is to answer the many questions looming around purchasing, especially for first-time home buyers. If you are just beginning, I recommend starting with Part One: Understanding Equity.
Hopefully when we’ve met for the first time, we have also been able to chat enough that I have an idea of the types of property my customer is looking for. If so, then I will have scheduled 2-3 properties for us to go see that I have found fitting for the customer’s criteria.
Before we leave to see those properties, I will go over the Buyer/Tenant Representation Agreement. Whereas the IABS is non-binding, this particular 5 page document is legally binding. It states that the buyer is exclusively working with the brokerage, and that the brokerage is representing the buyer’s interests. The agent (myself) is working as a representative of the brokerage (TM5 Properties), and the buyer is bound to the brokerage, not to the agent. That is important for the buyer because if you don’t like the agent you are working with, the broker can appoint another agent to work for you!
As I mentioned previously, without this agreement signed the agent is by default working on behalf of the seller, known as a subagent. The subagent is helping a buyer during the transaction but doesn’t have an agreement to represent the buyer’s interests, and therefore by default has the seller’s best interests in mind – the agent can provide facts and answer basic questions but cannot consult the buyer. Why does the salesperson “work for the seller” without a buyer agreement? To protect the seller’s information – things like days on market, surveys, private remarks, etc. If the Buyer/Tenant Representation Agreement is signed by the agent and the buyer then the agent can provide any and all of this information to the buyer.
The Buyer/Tenant Representation Agreement is mandated by the state, and within it are various sections I will go over with you. Keep in mind that the only edits that can be made are those that are fill-in the blank. An agent is not a lawyer, and therefore cannot act like one. Areas that are completed based on the buyer’s needs are the buyer’s contact information, where they are searching (any city, county), term of the agreement, intermediary or not, if third party is assisting in the move, protection period, and any special provisions. In this Agreement intermediary has a second definition - without it, the buyer cannot view or purchase any properties that are listed by the brokerage (TM5 Properties when signing with me). It is in the buyer’s best interest to check off intermediary … think of how many properties that removes as an option?! Although it is not ideal, it is absolutely up to the buyer what they would like to do.
I don’t like seeing a legally binding document for the first time and being expected to sign it immediately, so I don’t expect that for my potential clients either. Instead, while we are reviewing the Buyer/Tenant Representation Agreement, we are reviewing a blank copy. This helps to see what parts of the document can be edited, as well as provides a copy for my potential clients to take home to review. If we continue to work together, I request this document to be signed before the second day of showings.
Now we go look at properties! Unless it was a last-minute scheduling, I will have comparison properties pulled for the properties we see which will help give an idea for the neighborhood’s market.
Hopefully I gain more understanding as to what the buyer is looking for, we enjoy each other’s company, and they want to continue working with me. My overall goal is to be completely transparent while providing buyers with the best purchasing experience possible!
Up next is the decision making, Part Seven: Making an Offer. Also, please leave any comments or questions below!
Katie Langthorn | Real Estate Agent, REALTOR®
C: 281.850.7743 | O: 979.703.1979 | F: 979.703.1980
3091 University Dr. E. #230 | Bryan, Texas 77802
Your Source for Bryan/College Station Real Estate