Why Do Agents Require Buyers to Sign Buyers Representation Agreement Before Showing Other Agent’s Listings?

I often get told by prospective Buyers that they don’t understand why they have to sign a Buyer’s Representation Agreement (aka Buyer’s Broker Agreement) before I can show them properties listed by others.  The reason is simple – it’s the law.  The link below is to a Q/A put together by the CT Association of Realtor’s assistant legal counsel is a great resource that explains the details in the following PDF:

Buying A House Is Not Like Buying A Car

An agent can show you any of their own listings and you don’t have to have representation as a Buyer.  That’s not the most efficient way to find the perfect home though since you would really have to contact each listing agent individually to see their listings.

A home Buyer in CT can often get representation for themselves at no cost to them as many Buyer’s Brokers accept the Listing Broker’s offer of compensation that’s made to the Buyer’s Broker from the Listing Agent sharing a portion of the fees the Listing Agent collects from the Sellers.

In the PDF link above, Judith makes another good point:

Q: A buyer can lower a purchase price by not using a buyer agent, right? Generally, no. Some buyers believe buying a home without using a buyer’s agent automatically lowers a purchase price because now there’s no buyer broker commission. However, that would be incorrect because through a listing agreement a seller agrees to compensate the listing company $X, so if the listing company sells the property without the cooperation of a buyer’s broker, it receives all of $X, not a portion of it.

I hope this helps.  Feel free to ask questions.

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About Greg Hanner, REALTOR®, Broker, e-PRO

Greg has been an agent with Garden Realty since 1989 (and became a Broker in 2008) specializing in single family, condo, and land sales. As a senior Project Mgr. for BROM Builders, Greg stays on the cutting edge with custom single family home and land sales. Greg also serves on the Eastern CT Asso. of Realtors Technology and MLS Committee (former 2014 and 2012 Chairman). If you would like information on custom building in eastern CT, visit www.BromBuilders.com . Greg holds a bachelor's degree from the University of CT and also holds a private pilot's license with an instrument rating. If you are looking for an agent who uses today's technology to maximize their communication abilities, then Greg might be the agent for you. As an e-PRO certified agent, Greg is proactive and savvy about the Internet and he can take the connected consumer seriously as well as meet their online needs.
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