Buyer’s Listing Agreement – Exclusive Right to Buy Lease or Option – Form 103
Most brokers realize a signed buyer’s listing agreement produces the maximum financial return for the effort, money and talent an agent invests when representing an individual interested in buying property.
That said, why require a lesser personal commitment from a buyer before you take steps to locate property than you do from a seller before you start to locate a buyer for their property?
Real estate services have great value to members of the public. This is evident by the fact that nearly all buyers and seller use them. All too often, members of the public exploit agents. They learn from them what they need to know about MLS properties, and fail to return when they decide to buy.
So, when counseling with a potential buyer and before commencing efforts to locate qualifying properties listed with other brokers or give advice, get the buyer’s written commitment retaining you to work with them as their exclusive agent. In exchange, you agree to diligently engage yourself to meet their objectives to the best of your abilities.
An exclusive right-to-buy listing agreement is used by brokers and their agents to prepare and submit to prospective buyers their offer to render services on their behalf as their real estate agent. Under it, you are employed to locate property sought by the buyer in exchange for the buyer’s assurance you will be paid a fee when the buyer acquires the type of property they seek. [See first tuesday Form 103]
Written documentation of an obligation to ensure you are paid a fee, signed by your buyer, is the legislatively enacted and judicially mandated requisite to collection of a brokerage fee. Written documentation is critical -when you work for a buyer.
Each section in Form 103 has a separate purpose and need for enforcement. The sections include:
- Brokerage services: The employment period for rendering brokerage services and the broker’s due diligence obligations are set forth in Sections 1 and 2. General provisions for enforcement of the employment agreement and broker fee-splitting arrangements are included in Section 3;
- Brokerage fee: The buyer’s obligation to either pay a brokerage fee or assure payment of the brokerage fee by the seller or seller’s broker, the amount of the fee and when the fee is due are set forth in Section 4;
- Property sought: A general description of the type of property to be located for the buyer is entered; and
- Signatures and identification of the parties: On completion of entries on the listing form and any attached addenda, the buyer and the broker (or agent) sign the document consenting to the employment.
Without the buyer’s written promise to pay a fee, you’re entitled to nothing when your buyer “goes around” you and acquires property on which you provided them with information.
Without the buyer’s written promise, no fee has been earned which is collectable from anyone, unless you arranged a fee-sharing agreement with the seller’s broker documenting the buyer as your client, a condition which presents other risks.