“If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid.”

Those are the first several lines from the last paragraph of the Information About Brokerage Services disclosure document that all holders of a Texas real estate license are required to show prospective clients. This document discusses the duties of a Listing Agent and a Buyer’s Agent.

Until fairly recently, Buyer’s Agency did not exist in Texas. Prior to that time, any agent talking to a prospective buyer was a sub-agent of the seller. In other words, that agent could not represent a buyer in a real estate transaction. Let’s look a little more into what that means.

As a sub-agent, an agent can not disclose certain information. He can not tell the buyer how long the house has been on the market, it’s sales history or anything about other homes in the neighborhood that have sold recently. He can do a market analysis to see what a reasonable offer might be. The only market analysis he can do is one that would support getting the best price for the seller. He can give facts, but not advice. He can not negotiate the best terms for a buyer. He can only keep the buyer’s attention focused on the property in questions rather than finding other properties that might actually work better for the buyer. And the list goes on.

The down and dirty of it is that many buyers have no idea that having a Buyer’s Agent is a very good thing. Entering into a Buyer’s Representation Agreement spells out the broker’s obligation to the buyer. It clearly shows that the Buyer’s Agent is obligated to have the best interests of the buyer in mind first and foremost. It clearly shows how the Buyer’s Agent is to be paid and it should show that to be the seller.

Anyone entering into a Buyer’s Representation Agreement should read the document carefully to make sure he understands it. A smart buyer will also have the Buyer’s Agent write a clause in the agreement stating that either party can cancel the agreement at any time with 24 hours written notice. After all, if the agent is not doing a good jog, the buyer should have an out. Buyers should keep in mind that there will probably be a protection period in the agreement. This will state something about the agent being protected for a certain time period after the end of the agreement if the buyer purchases a home the Buyer’s Agent showed the buyer.

Buyer’s Agency is a really good thing and buyers should not be afraid to enter into a Buyer’s Representation Agreement. Buyers should first be comfortable with the agent and should fully understand the document. Anyone interested in buying Austin real estate should talk with a Buyer’s Agent before beginning to look at houses.