How You Fill Out A Buyer Representation Agreement In Texas

How You Fill Out A Buyer Representation Agreement In Texas

One of the first real estate documents you’ll likely have a client fill out is a Buyer Representation Agreement. This document protects both you and the client, so it’s crucial that you explain it to them. But if you’re new to the industry, you might be wondering how to fill out a Buyer Representation Agreement in Texas.

In this post, I’ll go over two important forms you need to fill out with your buyer: the Information About Brokerage Services form and the Buyer Representation Agreement form.

Why You Need to Fill Out a Buyer Representation Agreement

Every time that I start working with a new buyer client, I will usually show them a few homes on our first meeting. However, I will not do any more showings with them until they’ve signed a Buyer Representation Agreement. 

Although having a client sign a Buyer Representation Agreement is optional in Texas and not required by most brokerages, I have all my clients sign a Buyer Representation Agreement for three reasons:

1. It ensures that once a buyer goes under contract on a property you are entitled to a commission.  This is especially important for new construction and For Sale By Owner properties where the buyer can potentially strike a deal without any interaction from you.

2. You can filter “tire kickers” from serious buyers.  In today’s environment, it’s important to protect your time and ensure you aren’t wasting any of it with buyers that have no intention of purchasing, when you could be meeting with those who are ready, willing, and able to buy a home. Signing a Buyer Representation Agreement shows commitment on the buyer’s part.

3. It helps me to know which stage people in my pipeline are at.  At a glance, I can pull up a report to show everyone who is under a representation agreement with me.  This will help you focus your attention on reaching out to the best prospects when you are short on time. 

Even if you can’t get the client to sign the Buyer Representation Agreement, you’ll need to get them to sign the Information About Brokerage Services form at the very least. All your clients need to sign this form because it is a Texas Real Estate Commission requirement.

If you’d like more information about representing buyers, check out my entire buyer presentation process.

Information About Brokerage Services Form

When you’re learning how to fill out a Buyer Representation Agreement in Texas, it’s important that you also include the Information About Brokerage Services form. It’s a standard form that you are required to go over with your client if you are a real estate agent in the state of Texas.

It informs your client that you as the real estate agent can represent them in one of three ways: as an owner or seller, as a buyer or tenant, or as an intermediary for both.

The next part of the Information About Brokerage Services form lets the client know the name of your brokerage firm, the broker’s name, and the name of the license supervisor.  You should receive all this information from your broker and have it filled out prior to your clients signature.

Next, you’ll need to have your buyer initial and date the form, which you can either do online through DocuSign or by hand if you’re in person.

How to Fill Out a Buyer Representation Agreement in Texas

Because I am a real estate agent in Texas, I will explain how to fill out a Buyer Representation Agreement in Texas. If you’re not in Texas, the form for your state may be different.

First, in the top part of the Buyer Representation Agreement form, fill out the buyer’s information, including their name, address, phone number, and email address. If two parties are involved, enter both of their names.

This form serves as an internal document that you can use for your own reference, so you can feel free to add other helpful information, such as their birthdays.

Next fill in your information, including your name and brokerage, your brokerage’s address, phone number, and email.

You can summarize the following few sections by explaining to your buyer that this is a six-month agreement, which is the standard length of service. However, I tell my clients that they can let me know if they are not satisfied with my service and feel the need to cancel our agreement. At that point, we can dissolve the agreement.

Skip down to section eight of the form, which relates to intermediary services. Since you already went over this in the Information About Brokerage Services form, you can quickly point out that this section talks about intermediary status and makes sure that you’re not representing both parties in a single transaction.

Protect Your Client’s Information

The next important part of how to fill out a Buyer Representation Agreement in Texas is section 10, which is about confidential information. Tell your client that by signing this agreement, they are officially becoming a client of your brokerage.

This means that you as the agent have a fiduciary duty to them, so you cannot share their confidential information with anybody else unless they permit you. Mentioning this will go a long way to create trust between you and the client. It will prove that you have their best interest at heart and that you will do everything possible to get them a fair deal.

Section 11 relates to the broker’s fees. Typically, the seller is on the hook for paying the commission, not the client. However, the client will have to pay the broker in the rare instance that the seller refuses or fails to pay the agent the specified amount of commission.

Some clients will not agree to this part of the contract. If that is the case, you can include an amendment to the contract that says the buyer does not have to pay the commission and get it approved by your brokerage.

But before you do this, reassure the buyer that it’s very unlikely that the seller would ever refuse to pay the commission. 

If you approach the seller with a buyer, you will almost always be able to negotiate a commission, even if it ends up being less than the original 3%. If you do get a smaller commission, don’t come after the buyer to get the rest of the 3%.

Personally, I tell my buyers that I will never come to them for a commission. But in the end, if you want to have your buyer pay your commission because you can’t get the seller to, you can try and pursue that.

Protect Yourself As The Realtor

In subsection G of section 11, go over the protection period. The protection period protects you as the real estate agent from the buyer and seller making a deal after the buyer’s contract with you has expired

After your contract with the buyer ends, send them written notice of all the properties you showed them. If they end up purchasing one of those properties up to 90 days after your contract has ended, you are entitled to go to the seller and request commission because you were the reason the client procured the property.  

Next, I go over section 15 about limitation of liability. This part is essential to explain to the client because it relates to what happens if they face any injury while they’re out looking at properties. Tell them that they will not be able to come to your brokerage for any compensation if they get hurt.

Limitation of liability is especially important regarding small children, in case the client was to bring them along to see a property. Remind the client that they should always be careful and keep their kids by their side at all times.

Discrimination Laws and Home Inspections

After that, you can skip down to Section 18 about Additional Notices. Under subsection B, tell your client that you have to abide by fair housing laws. These laws mean that as a real estate agent, you cannot discriminate based on characteristics like race, sex, or different areas of your town or city.

As the Realtor, you can’t steer your client in a certain direction or direct them away from a particular neighborhood based on those types of protected classes.

So if a client asked any questions regarding those characteristics or a specific part of town, you wouldn’t be able to answer them. If that were something they wanted to know more about, they would have to do their own research.

Lastly, you should point out subsection C of Additional Notices, which states that the broker is not a property investor, surveyed, engineer, environmental assessor, or compliance inspector.

This means that your client will have to hire an inspection company, which you should always recommend they get anyways, no matter what the case is.

It’s a good practice for the buyer to get their own in every situation, even if the seller already has one. As a real estate agent, you don’t ever want to advise them not to get an inspector because that can put you in a liable situation.

Final Thoughts on How to Fill Out a Buyer Representation Agreement in Texas

Those are all the main points of the form that you need to make sure you go over with your client. Once you’re done explaining the form, ask them if they have any questions.

If they have no questions, direct them to sign the form so that they officially become your client. You’ll have to sign the form yourself as well, and then you’ll file it with your brokerage. Make sure you keep a copy for your own records.

The entire process of how to fill out a buyer representation agreement in Texas should take around five to ten minutes. What has your experience been like with buyer presentations? Let me know in the comments below!

Kyle Handy

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