Broker Agreement

Post #2
So this time, I decided to write about the elephant in the room when it comes to working with a real estate agent in the United States, and that is the buyer agency agreement, or as you know it from Israel—exclusivity.

I’m often asked, “So wait, Rotem, who actually pays you the commission? Isn’t it the seller?”
Well, it’s important to know that when you sign an exclusivity/representation agreement with an agent, whether for one transaction or several, you are essentially signing with the company the agent works for. You are a client of the company, and in a big way, the whole company (brokerage) works for you.

The agent’s duties to you are summarized by the acronym OLD CAR:
Obedience: The agent must obey the client’s lawful instructions.
Loyalty: The agent must act in the client’s best interest, placing the client’s needs ahead of their own.
Disclosure: The agent must disclose all material facts relevant to the transaction that could affect the client’s decisions.
Confidentiality: The agent must keep the client’s private information confidential, even after the transaction is complete.
Accounting: The agent must provide a proper and timely accounting of all money and property handled for the client.
Reasonable Care: The agent must use the same level of skill, care, and diligence that a reasonably prudent agent would use in similar circumstances.

Now that you’ve read and understood that your agent’s main duty is to act in your best interest, the commission issue will depend on whether or not the seller is participating in paying the commission.

In the past year, the “rules of the game” have changed, and now it’s illegal to specify whether the seller is participating, at least in the MLS listings. Sellers have never been required to pay the agent’s commission, and now more than ever, they are not obligated to pay. This is where the representation contract comes into play, and you, as buyers, will pay the commission percentage (or part of it) that you’ve agreed upon with your agent, if the seller doesn’t.

It’s very important to note that you can negotiate with your agent and reach a fair agreement.

I hope this explanation helps, even if just briefly. And with that said, a good agent is your eyes and legs on the ground. They will be there to deal with any obstacle that may come up on the way to closing and will negotiate on your behalf to ensure you get the best price.

In the meantime, Happy Holidays and a Happy New Year, friends! May this year bring us security and unconditional love, a year where we’ll be with our loved ones at home 🙏🏻. A year of action and blessed success.