I understand that it’s important to have a written representation agreement when representing a buyer and that it’s required that a broker have a written agreement signed by the person agreeing to pay a commission to enforce this right against a client. But why should I be concerned about this fee issue, since in my market the seller’s agent almost always pays the cooperating broker’s fee under the MLS residential listings?

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  • I understand that it’s important to have a written representation agreement when representing a buyer and that it’s required that a broker have a written agreement signed by the person agreeing to pay a commission to enforce this right against a client. But why should I be concerned about this fee issue, since in my market the seller’s agent almost always pays the cooperating broker’s fee under the MLS residential listings?

The TAR Buyer/Tenant Representation Agreement does contain language that states that the broker will seek to obtain payment of the broker’s fees from the seller, landlord, or their agents, but provides that if the buyer agent does not receive all or any of the specified commission from those sources, then the buyer/tenant is obligated to pay that commission (or the difference in the amount specified in the agreement and the amount paid by the seller, landlord, or their agent). This provision can also establish a legal claim to a fee from a buyer who has purchased a home during the term of the agreement using some other agent to complete the purchase contrary to the buyer’s agreement to use the broker named in the buyer representation agreement. Brokers should clearly explain the buyer’s potential fee obligations under this paragraph of the agreement when they first present the representation agreement to the buyer for signing. Clarity of the parties’ rights and obligations in the broker/client relationship is one of the main reasons for having a written brokerage agreement.

Source: TAR

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