Buyer Brokerage Agreements – Why? Image

Buyer Brokerage Agreements – Why?


There are very few real estate industry members – if any – who would consider listing a seller’s property without having a written seller brokerage agreement. Working with buyers should be no different.

Written service agreements with buyers serve three primary purposes. First, the role and responsibilities of the industry member are clearly articulated, clearly understood and agreed to in writing. Second, the service(s) to be provided are clearly understood and agreed to in writing. And third, the responsibilities of the buyer are clearly understood and agreed to in writing. Written buyer service agreements provide the best protection for buyers and their representative(s) in the event a dispute arises regarding their respective roles or the service being provided.

Section 43 of the Real Estate Act Rules recommends industry members, when establishing a client relationship, enter into a written service agreement with that prospective client. And, in the case of designated agency brokerages, written service agreements are required – for seller clients AND buyer clients.

Alberta consumers are always free to decide what type of service(s) they wish to contract for from an Alberta industry member. Buyer brokerage agreements are not intended as a tool to force a consumer’s hand; rather, the opposite is true. Buyer brokerage agreements provide clarity. The consumer knows exactly what to expect from their industry member representative and because of that, there is an enhanced level of trust and confidence that the industry member will promote and protect the buyer’s interests. In the absence of a written service agreement, there is a degree of risk in that required disclosures may not be made, and the role of the industry member and the service(s) being provided may not be clear in the buyer’s mind.

For more information about buyer brokerage agreements, please see RECA Information Bulletins: Service Agreements – Buyers Working with Common Law Brokerages and Service Agreements – Buyers Working with Designated Brokerages.

Why do you think some consumers are hesitant to enter into written buyer service agreements? Why do you think some industry members are hesitant to enter into written buyer service agreements? How can we increase acceptance of buyer brokerage agreements?