Why is Buyer Agency so important?
Buyer Agency establishes who is working for whom, how long they will be working for them, compensation to be paid, and in which geographic region.
This is important for the Buyer, because the buyer needs to know if the RealtorŪ is working for them or the seller. It also establishes a geographic region. So if you are looking for a condo downtown, and work with a someone who knows downtown, the agreement should be limited to that geographic area and also that housing type. If you change your minds in the location, you will be able to pick another RealtorŪ who knows the new area you pick. The buyer will also know how much compensation the RealtorŪ will be paid, eg: 2.5% and if the buyer decides to buy a house with only 2% being offered, the buyer needs to know if the RealtorŪ will try to get the full amount from the seller, or if the buyer will be required to come up with the difference, or if the RealtorŪ will accept the amount offered.
It is important for the RealtorŪ to also know what type of relationship the buyer expects from them, if the buyer is not going to be represented, then the seller is, and the relationship then becomes one of customer service, and the information the buyer can get about the property becomes limited.
In my view, every buyer should have their own RealtorŪ working for them under Buyer Agency, but limit it to what you are looking for.
Don't sign if the agreement reads: Area : Ontario, Duration: one year, Commission amount : Whatever
As with any important document, if it is not fully explained to you or if you don't understand fully what it says, DO NOT SIGN.
Thanks.