Buyer Representation Agreements: You Have Options Image

Buyer Representation Agreements: You Have Options


Representation agreements with sellers – i.e listing agreements – have never been an issue. Sellers typically sign them without much argument. Buyer Representation Agreements, however, have been used far less frequently.

Many Alberta real estate professionals have not adopted, as a business practice, the presentation of a buyer representation agreement to their buyer clients. That’s all changing now.

As of July 1, 2014, written service agreements are required whenever a client relationship is formed – for both sellers and buyers.

Real estate professionals are expected to talk to buyers about the relationship options available to them, which includes discussing the difference between client and customer status. They may also discuss the difference between exclusive and non-exclusive agreements.

Of course the Real Estate Council of Alberta, the governing body for real estate professionals, recognizes it cannot force consumers to sign service agreements.

So what happens if a consumer is unwilling to sign any buyer representation agreement?

The real estate professional has two options:

Treat the buyer as a customer, which means not providing representation

  • Refuse to work with the buyer
  • Some real estate professionals may find that any objection a buyer client has is with respect to signing an exclusive agreement, and for those buyers, a non-exclusive agreement may be the way to go (to read more about the difference between exclusive and non-exclusive agreements, click here).

Real estate professionals must explain the options available, and it’s up to the consumer – together with the real estate professional – to find a working relationship that works for them.

It is no longer an option for a real estate professional to simply put a note to file that a buyer client was unwilling to sign a written service agreement and then proceed with that buyer in a client relationship. Client relationships require a written service agreement.

While adopting buyer representation agreements may be a new practice for many real estate professionals, the process of presenting them to potential buyer clients should be no different than having representation discussions with sellers. Written agreements provide clarity and reduce the chance of disputes.