Back in the “old” days, buyers did not have real estate agents representing them. Real estate agents always represented the sellers. However, the buyers were dealing directly with the sellers’ agents, and so often times, the agents would assist the buyers as much as possible to help sell their listings.
As time progressed, real estate agents started working directly for the buyers, and they would show buyers everything that was available rather than just their own agency’s listings. These agents were regularly giving advice to buyers.
In 2006, the Maine Legislature felt that a contract should be required between buyers and their agents just as one is required between sellers and their agents.
Because this is a new requirement, buyers may be skeptical of signing a contract with a real estate agent because they are unsure of why this is necessary. Simply stated, a buyer’s contract is necessary for the same reason it is necessary for a seller. The contract allows the real estate agent to treat a buyer as a client, and to provide the buyer with all the advice necessary to buy real estate. In turn, the contract specifies how the real estate agent will be compensated.
One thing a buyer should keep in mind is that every single term of the contract is negotiable, including the length of the contract, how compensation will be handled, and the geographical area to be considered.
A buyer’s agent can be an invaluable asset when navigating the world of real estate transactions, but since 2006, this assistance is only available by entering into a written buyer representation agreement.
How does a buyer agent get paid?
The standard means by which a buyer’s agent gets paid is for the listing agency to offer a portion of its commission to a buyer’s agent at closing. Under these circumstances, a buyer does not pay anything out-of-pocket to their agent.
However, a buyer may have an agreement with their agent that obligates them to pay the agent directly in a case where no commission is being offered by a listing agent. For instance, a buyer agent may locate a property that is for sale by owner.
Again, compensation is a completely negotiable term of the contract depending upon what the buyer wants his/her agent to do.