Buyer Agency

Section: Buyer Agency Estimated study time: 45 minutes Content: Buyer agency is a formal representation relationship in which a real estate broker or salesperson represents the interests of the buyer — not the seller — in a real estate transaction. Prior to the buyer agency movement of the 1990s, nearly all real estate agents legally represented the seller, even when working closely with buyers. The shift to buyer agency resulted from recognition that buyers deserved their own representation and that the traditional subagency model created undisclosed conflicts of interest. Massachusetts mandated buyer agency disclosure effective January 1, 1998, ensuring all buyers understand who represents them at every stage of a transaction. A buyer agency agreement (also called a buyer representation agreement) is a written contract between the buyer and the buyer's broker establishing the agency relationship. Key terms include: the scope of services the broker will provide, the duration of the agreement (a specified period or through a specific transaction), the buyer's geographic search area and property criteria, and the compensation arrangement. Most Massachusetts buyer agency agreements specify that the buyer's agent will seek co-broke compensation from the seller's broker (MLS compensation); if the offered co-broke is below a minimum agreed amount, the buyer may be responsible for making up the difference. Buyers must sign and receive a copy of the agency agreement; the broker retains the original for three years. The buyer's agent owes full fiduciary duties to the buyer: loyalty (working exclusively for the buyer's interests), confidentiality (protecting the buyer's financial capacity and negotiating strategy), obedience (following the buyer's lawful instructions), disclosure (informing the buyer of all known material facts about the property and the transaction), accounting…