Is having a signed written agreement, such as TAR’s Residential Buyer/Tenant Representation Agreement, the only way for a broker to create an agency relationship with a buyer?
No. Although agency relationships can exist when you’re acting on behalf of the buyer without a written agreement, the best way to create an agency relationship is to put the rights and obligations of a broker and his or her client in a signed written agreement,.
In addition to being a good business practice, there are several other reasons why broker-client relationships should be in writing:
- You cannot enforce your right to collect your commission from a seller or buyer unless you have a signed written agreement with them agreeing to pay your commission, according to Section 1101.806(c) of the Real Estate License Act.
- Section 1101.559 of the Real Estate License Act requires brokers who act as intermediaries to obtain the written consent of each party in the transaction and that written consent must also state who will pay the broker.
- Article 9 of the Code of Ethics requires that REALTORS® shall assure whenever possible that agreements shall be in writing for the protection of all parties.
I get a lot of pushback from experienced buyers on this. “No other Realtor has ever asked me to sign anything like that.” Does anyone have a suggested response to that?
Show them the IABS and read them the portion of Subagent because that is what you are without an Buyers Rep Agreement
Robbie. Absent a written agreement to the contrary, is an agent, even acting for a lessee or buyer deemed an agent of the landlord or owner?
I understand, and I think I know why that is, may I explain? You see, maybe they’re afraid to ask you to sign and enter the relationship. I guess that could be a lack of confidence or just plain fear. And I have to ask you, if they don’t have the confidence or if they’re afraid to ask you to sign, won’t that show up when they’re negotiating with your money? Don’t you want a fearless, confident agent representing you and negotiating for you? Great, then let’s do the right thing and go into business together.
You can give them the iabs form and you can also make the buyer representation agreement for the specific properties you are showing to the buyer. That way they are only tied to you for the homes you showed to them. Most of the time they understand that you are taking the time to help them and protect their best interest usually they will sign. Maybe meet at the office or coffee shop first to explain the forms. Or send for electronic signatures so they can review the forms before you meet. Also explain that the homes you are showing… Read more »
Can we write our own Agreement which will contain the issues (commission, etc) you talked about and state you we are representing, and have it signed?
As a TREC Instructor for the class Understanding Sub-Agency … The Mystery Revealed! Robbie English is Absolutely Correct! When a prospect is informed in the very beginning of your relationship what is on the IABS and they understand who represents who in a real estate transaction when given a choice to be a customer or a client, they usually choose to be a client and gladly sign a Buyers Representation Agreement. Your are doing your prospect a disservice by not explaining the IABS in the very beginning. The IABS should actually be explained to the prospect not just handed to… Read more »
Hey girl! I like your responses to the group and individuals:)
Tom, in response to: “No other REALTOR® has ever asked me to sign anything like that.” You are being an excellent agent and following the Texas Law. You are offering your prospect a “Consumer Protection” form by explaining the IABS and letting them know who represents who in a real estate transaction. You can’t help that the other agents are not following the law. But because you are an excellent agent you are servicing your prospect properly. You will find the buyers will usually gladly sign a buyers rep agreement. And if they don’t that is ok, they made a… Read more »
These are all helpful comments and great reads