Do you need a buyer’s representation agreement when buying a property?  You may not think so, but you almost certainly do, and here’s why.

In the old days, and we’re not talking that long ago, because of the way real estate laws were written all agents ostensibly represented the seller of the property.  You walked in with ‘your’ agent, but the house you were inside of claimed his fiduciary responsibility ahead of yours.  Why?

Since the only contracts in existence up to the time a buyer made an offer on a property were written for the listing of the property, then the only two entities tied directly to the property by contract were the seller and their agent. 

And, in a strange twist, that meant when a buyer and their agent showed up at the listed property, the buyer’s agent and buyer had nothing but the implication of representation that kept that agent representing the interests of the buyer.

That’s because the laws tied all agents to the interests of the contracted party, which was the seller.  And implied agency—the buyer and their agent’s direct and indirect actions imply one represents the other—were what kept agents true to their buyer’s interests.  And, with most agents, that’s all what was needed to represent their buyer-client’s interests.

But, technically, if you as a buyer don’t have a buyer agency or representation agreement (BAA) signed with your agent, that old law still applies.  And, while implied agency is still recognized in a court of law, the last place you want to be proving agency is a court of law.

Many people still don’t think about the fact that when they call the number on a yard sign, or from a print or Internet ad, they’re calling the person representing the seller.  And, the seller’s agent just cannot answer questions you ask designed to find out private information only the seller and their agent should know.  

But, if you’re not aware the person you’re talking to has a fiduciary (that’s a word used a lot in agency questions) duty to their client, and that client is not you, then just calling off of advertisements may not be in your best interests.

When BAAs came into existence less than 20 years ago, most agents didn’t want to scare off potential clients by laying down the five-page contract—and it is a contract—offered by the Texas Association of Realtors and asking people they hardly knew to sign it.  

And, on the other side of the table, people to whom an agent just poorly explained the meaning of the document—and agency in general—were even less likely to understand the BAA actually helped them by tying this agent to their fiduciary protections.

So, bad explanation on the professional’s side led to poor understanding, and mistrust, on the consumer’s side, and the recipe for a terse, or at least confusing relationship was born. *

In the BAA there are specific performance categories, such as geographic areas the BAA can be tied to, the date the agency relationship expires, in addition to who the parties are and how the agency relationship can be ended by either party if the relationship isn’t working satisfactorily. 

The BAA, then, is not a document for a buyer to avoid, but, in the interest of protecting their own interests, one they should embrace.  So, who should sign a buyer agency agreement?  For full protection, anyone buying property.


*Texas, The State, came up with Information About Brokerage Services, and requires agents to share with potential clients this one-page document explaining how agency works, on both sides, in the hope that poor communication doesn’t translate into arbitration and lawsuits.  And, the IABS is required to be shared/explained at the first ‘substantiative dialogue’ in the hope of defining agency roles at the beginning of a transaction.