Which One is Best? 4 Types of buyer’s agreement contracts

Don’t sign anything before you understand your options! This article lays out all of the different types of buyer’s agreement contracts, what exactly are you agreeing to, and which may be the most appropriate for you.

What is a Buyer's Agreement?

A buyer’s representation agreement is a contract that outlines the relationship between a home-buyer and their real estate agent. This agreement clearly articulates expectations, including how your agent will be compensated. It ensures that you as the buyer receive dedicated assistance while navigating the real estate market.

A well-crafted buyer’s agreement can save time, avoid misunderstandings, and foster a stronger partnership between the buyer and agent. Ultimately, the right agreement empowers buyers to find and secure their dream home while leveraging the agent’s expertise effectively.

Things to Consider When Choosing a Buyer’s Agreement Contract

Choosing the right agreement depends on your preferences, level of trust in your agent, and how you want to navigate the home-buying process. By understanding your priorities and the dynamics of working with an agent, you can choose an agreement that aligns with your preferences and ensures a smooth, efficient process. Here are a few important considerations to keep in mind as you decide.

• Confidence in Your Agent: If you trust that your agent is the right fit for your needs, you might consider agreements that indicate a stronger commitment, such as those offering exclusive representation. As soon as you’re confident that the agent your working with is the one you’d want to see you through to the end of the transaction, consider signing the market area buyer agreement.

• Level of Commitment: The more dedicated you are to your agent, the more likely they are to prioritize your search and provide focused service. Agents are more likely to invest their time and resources in clients who demonstrate loyalty and a strong likelihood of completing transactions with them.

• Working with Multiple Agents: Collaborating with several agents may dilute the level of service you receive, as agents often prioritize clients with clear commitments.

Types of Buyer’s Agreement Contracts

By understanding these agreement types, you can better assess your needs and choose the arrangement that aligns best with your preferences and home-buying strategy. There are 4 types of agreement options for you to consider when hiring a buyer’s agent.

• Multi-Property Buyer Representation Agreement: This agreement grants an agent exclusive rights to represent the buyer for a defined list of properties, which can be updated over time. It offers flexibility while committing to a specific agent for a targeted search.

• Single Property Buyer Representation Agreement: This contract is specific to a single property, providing the agent exclusive representation for that property only. It’s less commonly used because other agreements, like the multi-property agreement, provide similar benefits with none of the limitations of the single property agreement.

• Open Buyer Representation Agreement: A flexible, non-exclusive contract that allows buyers to work with other agents on properties not specifically introduced by the signing agent. It’s ideal for buyers who want to keep their options open while still receiving assistance for select properties.

• Market Area Buyer Representation Agreement: This agreement grants an agent exclusive representation for properties within a specific geographic area. It’s ideal for buyers confident in their agent’s capabilities and focused on finding a home in a defined region.

Let’s talk about each of these agreements in more depth.

1. Multi-Property Buyer Representation Agreement

Best for: If you’re not yet certain a real estate agent will be a good fit for you, consider the Multi-Property Buyer Representation Agreement. This agreement gives you the flexibility to see a host of properties with the agent over the course of a few days or weeks. Once you feel confident in your agent, consider switching to a Market Area Buyer Representation Agreement.

The Multi-Property Buyer Representation Agreement is a comprehensive option for buyers interested in multiple properties over an extended time- frame. This agreement ensures that the agent has exclusive representation rights for specific properties listed in and allows buyers to add properties within a defined period. This indicates to your agent that you are serious about working with them which will allow them to invest the maximum amount of effort into your property search.

Key aspects of this agreement include:

• Exclusive Rights: The agent has the exclusive right to represent the buyer for each property listed in the addendum. The buyer commits to working solely with the agent for these properties.

• Flexible Property Identification: Buyers can add properties to the list within the set timeframe, making this ideal for those who want flexibility in identifying potential properties without committing to an agent for an entire market area before they are ready.

2. Single Property Buyer Representation Agreement

Best For: Buyers focused on one specific property who are confident it’s the right choice and want dedicated representation for that particular transaction.

The Single Property Buyer Representation Agreement is specific to a single property and gives the agent dedicated rights to represent the buyer for that property throughout the purchase process.

Highlights of this agreement:

• Single-Property Exclusivity: Once signed, the buyer commits to working exclusively with the agent on one specific property.

This is not widely used - as the multi property agreement provides all of the same benefits of the single property without requiring buyers to sign brand new agreements each time they tour a property.

3. Open Buyer Representation Agreement

Best For: Buyers who prefer a non-exclusive arrangement, want to explore multiple properties with multiple agents, or are unsure about committing to a single agent right away.

The Open Buyer Representation Agreement is a non-exclusive contract that provides an exclusive relationship with a specific agent for certain properties brought to the buyer’s attention during a specified time period.

Noteworthy points of this agreement include:

• Non-Exclusive Flexibility: The buyer can work with other agents on properties that are not specifically identified by the agent in this agreement.

• Selective Coverage: The agreement covers only properties that the buyer’s agent has introduced to the buyer or those the buyer has inquired about through the agent. Buyers aren’t committed to the agent unless the agent brings a property to their attention.

4. Market Area Buyer Representation Agreement

Best For: buyers working with an agent they already trust.

The Market Area Buyer Representation Agreement grants the agent exclusive rights to represent the buyer for properties within a chosen area, which is defined at the start of the agreement.

Key aspects of this agreement:

• Geographic Exclusivity: This contract focuses on a particular area rather than particular properties.

• Commission Based on Area Transactions: The buyer agrees to work with the agent for any property purchased in the geographical region during the agreed upon time period.

FAQ: buyer’s agreement contracts

What is the most common buyer representation agreement?

The most commonly used representation agreements are the multi property representation agreement and the market area representation agreement. The multi property is a great option for buyers still deciding if the agent is the right fit and the market area representation agreement is great for buyers once they’ve gotten comfortable with an agent.

What type of contract is most preferred by the buyer?

Buyers sometimes prefer signing the open area representation agreement or the multi property agreements because they feel like those agreements give them the most flexibility. However, buyers are often better served when they sign market area representation agreements, as agents generally prioritize clients who have made commitments.

Can you back out of a buyer's agreement?

Yes, you can back out of a buyer’s agreement if both parties consent to the agreement’s termination. It is important to note that buyer’s agreements are between buyers and brokerages, not individual agents. If you dislike your agent, you can always talk to their broker and get a new agent assigned to your search.

How do I cancel a buyer broker agreement?

Both parties need to agree to terminate the buyer’s agreement. Kindly let the agent know that you are no longer comfotable working with them. If they are their own broker, they will be able to release you from the agreement themselves. Otherwise, they’ll need to discuss termination with their brokerage. If the brokerage will not terminate the agreement, they can still find you another agent to work with.

How long do buyers agreements last?

They are generally written to last 180 days. However, you can specify exactly how long you’d like the agreement to be in effect.

Find the perfect agent

If you’re on your journey to renting a unit in New York, I’d love to help guide you through the process. My name is Kristen Shaker, and I’m a licensed Real Estate Salesperson in New York City. Whether you’re just starting your search or ready to make a move, you can contact me to get started here. Let’s find your dream apartment! And don’t forget to download my FREE Guide on how to save money on your next rental — it’s packed with valuable insights and tips to help you make the best decision for your future.