Do I Have to Sign a Buyers Representation Agreement?

November 1, 2023

When you are looking to buy or sell a property or business with a registered real estate salesperson or broker, you may be asked to sign a buyer or seller agreement.

Simply put, a buyer’s representation agreement is a contract signed between a prospective real estate buyer and a real estate brokerage for the right to represent them in a real estate transaction.

It will outline the terms of the agreement, including time frame and the services that the brokerage agrees to render the client during that time, which is typically 3 months depending on the market.

Some Realtors® will request a buyer’s representation agreement before showing houses, while others prefer to wait until a customer is ready to make an offer on a property. It is up to you and your chosen REALTOR® to decide when to sign.

Why sign a Buyer’s Rep Agreement?

Many buyers are reluctant to sign a contract, fearing being bound to a particular brokerage or agent or pressured into buying a home they don’t want. While it may seem intimidating, the buyer’s representation agreement does not force you to buy and provides you, as the client, with a number of benefits. Let’s talk about a few of these benefits below.

1. You will become a client instead of a customer

The most common relationships are “client” and “customer”, but other options may be available in the marketplace. A Buyer’s Representation Agreement acknowledging a Client relationship is an “exclusive” agreement meaning both parties agree to work only with each other. A Buyer Customer Service Agreement acknowledging a Customer relationship is a “non-exclusive” agreement, meaning both parties agree to work with other people.

Clients and customers are separated by one main difference — the contractual relationship. When you sign a buyer’s representation agreement with your REALTOR®, you become their client and they are contractually bound to act in your best interest.

Real estate transactions are subject to a wealth of rules, and, as much as they might want to help you, there are some things the REALTOR® you are working with is not legally obligated to tell you unless you are a client.

Your REALTOR® will also be able to provide you with additional services not legally available to customers, such as a full disclosure of information and to negotiate on your behalf during the purchase process.

For those outside the industry, the distinction of “client” over “customer” may seem a small one, but it can have a large impact on your real estate transaction and your confidence in the final outcome. Click here for more details on each relationship.

2. All expectations will be clearly outlined

The home buying experience can be overwhelming, and a buyer’s representation agreement offers peace of mind by clearly outlining all expectations both you and your REALTOR® have for each other throughout the process. ​

Your chosen REALTOR® will go over the agreement with you and all of the services they will perform as your buyer agent. This simple step will clear up any possible misunderstandings upfront and you will be able to proceed with confidence.

3. You will work with, and get to know, one person

Talking to five different people about five different homes can be confusing and it can be hard to compare homes listed by different brokerages if you aren’t familiar with real estate terminology. A buyer’s representation agreement means that you have one person to speak to, no matter what the question.

The rapport you have with your real estate agent will put you at ease, and they will be able to guide you with their years of experience. Always be sure to meet with your REALTOR® before you sign any contract with them.

Having one person to guide you through the process, who is acting in only your best interest, will make your home search significantly less stressful.

4. It protects your rights as a client

Licensed REALTORS® are bound by a code of ethics, holding them to the highest standard of behavior in all steps of the real estate transaction. According to Article 4 of the Code of Ethics, when representing a buyer, seller, landlord, tenant, or another client as an agent, “a registrant shall promote and protect the best interests of the registrant’s clients“. O. Reg. 580/05, s. 4.

If you feel you were not properly represented during the transaction, your status as their client will afford you recourse unavailable to customers. While these situations are rare, knowing that you are protected by these rules will give you peace of mind.

5. It guarantees your agent will get paid by the selling broker

REALTORS® work exclusively on commission and are paid by the seller upon the sale of a home. If you are working with an agent and are pleased with his or her diligent work, make sure you sign a buyer’s representation agreement to ensure they will get paid by the selling broker.

After all the work that they do, if the REALTOR® doesn’t have a signed buyer’s representation agreement, then the company that has the listing may not pay the REALTOR®.

It’s the only legal document that guarantees a buyer’s agent is going to get paid. While it may not affect your bottom line, a buyer’s agent will spend hours helping you and will feel much more comfortable spending that time if there is an agreement in place so that they can be compensated for their efforts.

Do I have to sign a Rep Agreement?

Representation agreements can be written, oral or implied. However, your broker or salesperson is required by law to reduce the agreement to writing and provide it to you for your signature. The agreement should be in writing in order to protect the interest of all parties.

buyer representation agreement (BRA) is always signed prior to putting in an offer on a property.

REBBA 2002 – Buyer representation agreements

14. If a brokerage enters into a buyer representation agreement with a buyer and the agreement is not in writing, the brokerage shall, before the buyer makes an offer, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the buyer for signature.  O. Reg. 580/05, s. 14.

REBBA 2002 – Agreements with customers

15. If a brokerage enters into an agreement with a customer in respect of a trade in real estate and the agreement is not in writing, the brokerage shall, at the earliest practicable opportunity, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the customer for signature.  O. Reg. 580/05, s. 15.

If you prefer to not sign either the Buyers Representation Agreement or the Buyer Customer Service Agreement; then there is no documented ask from you for services and no obligation upon the brokerage to commit time or resources to provide any services to you.

One thing to remember: if there’s anything in the agreement you don’t agree with or don’t understand, say so. Ask lots of questions, and if you need to have someone else review it before you sign, that’s okay.

Can I break the agreement, if needed?

If it’s been a month and you’re just not seeing eye-to-eye, it’s possible to dissolve the agreement with a release, as long as both parties agree. However, there are situations where you could be opening yourself up to legal action. For example, if your agent helped you find a place you like, but you broke the agreement to buy that property privately…or you decided to work with your sister, who just got her license. The initial agent would be legally entitled to the commission.

Ultimately, we want to work with people who are committed to working with us. And remember, signing an agreement won’t cost you anything as a buyer: the seller usually pays 100% of the commission.

You can also request to work with a different agent within the brokerage if you feel another person would be a better fit. Buyer’s representation agreements are officially between the property buyer and the brokerage, so any brokerage agent can fulfill those obligations. Buyer’s representation agreements are legal contracts, but that doesn’t mean you will be stuck working with a person you don’t wish to.

Other considerations

Some agents are concerned with a customer using their services and then later trying to avoid paying them by going directly to the seller or to the listing agent. Most agents, if they aren’t sure a client will stick around, will be less inclined to spend a lot of time.

So, it does give your agent something you want them to have: the confidence to commit the time that’s needed to help you buy. There’s a lot more involved than just taking people on showings, opening doors and turning on lights. Great agents also educate buyers on value, guide them through every step of the process, submit offers, negotiate, support them through bidding wars – and fight hard for them when needed.

But you won’t necessarily have to sign on the dotted line right away. While some agents will ask for a BRA before agreeing to take you on a showing, others are a little more flexible and will wait until you’re ready to make an offer on a place. It’s kind of like a first date. After the meeting, you will know if it’s worth continuing (and that goes both ways).

I like to build rapport and trust before asking my clients to sign, so I tend to do what feels right organically. There have been times, with previous clients, when I just get them to sign the BRA before I submit their offer. But when I have potential clients who are looking for a very specific property I know will take a while to find, I’m more likely to ask them to sign earlier. It gives me the confidence I need to invest my time and resources. And with that confidence comes a big benefit to the buyer client: having an agreement ensures you’ll be prioritized over someone who hasn’t signed and get the best service from your REALTOR® as possible.

A buyer’s representation agreement may seem like just one more thing to sign in the real estate transaction process, but it is designed to protect you and ensure you have the best possible real estate experience. You will reap the benefits of your REALTOR®’s experience and expertise, and buy with confidence knowing that your best interests are being promoted.