As a buyer searching for a new home, it`s essential that you understand the ins and outs of exclusive buyer broker contracts and for sale by owner properties. These two types of arrangements can become intertwined, and it`s important to know how to navigate these situations and protect yourself as a buyer.
First, let`s define what each term means. An exclusive buyer broker contract is an agreement between a buyer and a real estate agent that gives the agent the sole right to represent the buyer in a real estate transaction. This contract typically lasts for a set period, such as 90 days, and can include provisions for commission payments, property search criteria, and buyer responsibilities.
A for sale by owner (FSBO) property, on the other hand, is a property that is being sold without the assistance of a real estate agent. The seller is responsible for all aspects of the sale, from advertising the property to negotiating with buyers and completing the closing process.
So, what happens when a buyer who has signed an exclusive buyer broker contract finds a FSBO property they want to purchase? The first thing to remember is that the buyer`s contract likely includes language that restricts the buyer from working with any other real estate agents during the contract period. This means that the buyer cannot engage another agent to assist with the FSBO transaction.
However, this does not necessarily mean that the buyer cannot purchase the FSBO property. The exclusive buyer broker contract should include provisions that allow the buyer to purchase a property without the agent`s assistance, such as if they find a property on their own or if they purchase a FSBO property.
In this situation, the buyer and agent should discuss the best course of action. The buyer may choose to work directly with the seller, negotiate their own offer, and complete the transaction without the assistance of their agent. Alternatively, the buyer may choose to involve their agent in the negotiations and pay them a reduced commission to represent them in the FSBO transaction.
It`s essential that the buyer and agent communicate openly and honestly throughout this process to ensure that everyone`s expectations are met. The buyer should also take steps to protect themselves, such as having an attorney review any contracts and conducting their own inspections and due diligence on the property.
In short, finding a FSBO property when you have signed an exclusive buyer broker contract can be a complicated situation, but it is not an impossible one. By understanding the terms of your contract and communicating effectively with your agent, you can navigate this process and find the home of your dreams.