When a seller signs a listing agreement, the seller understands how much they are going to pay for the broker’s service.  In contrast, most buyers do not understand the MLS offer of compensation or the concept of procuring cause.  The Arizona REALTORS® Buyer Broker Exclusive Employment Agreement (“Buyer Broker Agreement”) can be used to address this issue and has many other benefits. 

Here are my top ten benefits of using the Arizona REALTORS® Buyer Broker Agreement.

1. Sets forth how the buyer’s broker is to be compensated for their services.
2. Assures that the broker will be compensated the agreed upon amount if the buyer purchases a property during the term of the Buyer Broker Agreement.  
3. With the understanding of how compensation works, the buyer agrees to work exclusively with the broker and be accompanied by the broker on the buyer’s first visit to any property. The buyer acknowledges that the broker may not be compensated by the builder, seller or seller’s agent if the broker does not accompany the buyer on the first visit to a model home, new home/lot, or “open house,” which would eliminate any credit against the compensation owed by the buyer to the buyer’s broker. 
4. Provides an opportunity to tout the services the buyer will receive.  A buyer broker’s services are so much more than just showing the buyer listings.  The buyer broker will assist and advise the buyer throughout the entire home buying process within the scope of the broker’s expertise and licensing.
5. Builds trust with the buyer through education and transparent up-front conversations.
6. Obtains the buyer’s agreement to act in good faith, provide the information necessary to acquire the property and conduct any inspections/investigations that the buyer deems material and/or important.
7. Protects both the broker and the buyer by avoiding misunderstandings. Managing expectations is an important risk management practice. 
8. Assures the buyer’s broker that the buyer is serious about buying a home and assures the buyer that the buyer’s broker is serious about finding them a home and guiding them to close of escrow.
9. Satisfies the legal requirement that a buyer’s broker must have a written employment agreement with a buyer to be paid a commission by the buyer. Real estate brokers may sue to recover compensation due under a real estate employment agreement only if there is a written agreement that complies with both the Statute of Frauds, A.R.S. §44-101(7), which requires a written signature of the party to be charged, and the real estate employment agreement statute, A.R.S. §32-2151.02(A), which requires that all real estate employment agreements be signed by all parties to the agreement and:
   • be written in clear and unambiguous language;
   • fully set forth all material terms, including the terms of broker compensation;
   • have a definite duration or expiration date, showing dates of inception and expiration.
10. Is an enforceable contract that can be helpful in the event of a commission dispute or in a dispute with a buyer. 

Some buyers may be reluctant at first when asked to sign a Buyers Broker Agreement.  View this reluctance as an opportunity to educate the buyer about the value of your services and build trust. As you review the Buyer Broker Agreement, explain your duties and obligations to the buyer and reinforce that you are a professional who follows the NAR Code of Ethics and that the Buyer Broker Agreement ensures the buyer has a dedicated and knowledgeable advocate representing them in the transaction.

For additional information on Buyer Broker Agreements:

NAR Window to the Law:  Benefits of Using a Buyer Representation Agreement

How Buyer Agreements Boost Your Value, Fend Off Claims (nar.realtor)

Avoid a Bad Practice that can Deprive You of a Commission

Hey! That was “My Buyer” and “My Commission!”

Real Estate Tales from the Courtroom: The Buyers’ Broker’s Signature  

K. Michelle Lind, Esq. is an attorney who currently serves Of Counsel to the Arizona REALTORS®.  She is also the author of the book – Arizona Real Estate: A Professional’s Guide to Law and Practice (3rd Ed.).  Watch for the Fourth Edition, which should be available soon. 

 For more real estate related articles, visit Michelle’s Blog at Arizona Real Estate – A Professional’s Guide to Law & Practice. (arizonarealestateprofessionalguide.blogspot.com)

This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.  8/11/23