Home > Real Estate Stuff Consumers Should Know > Working Exclusively Is An Important Message Consumers Need To Know

Working exclusively (in real estate) means a client who grants a real estate broker sole rights with regards to his/ her real estate/ housing needs. This subject can be pretty straight-forward in a selling (listing) situation where the seller appoints one real estate broker to handle the sale of his/ her home. On the other hand, the purchasing side may be a little more "tricky" for some.

Real estate brokers (or agents) are typically independent contractors. They only receives their paycheck after a client purchases, closes and funds a transaction. Under normal purchase scenario, a buyer typically purchases one(1) house. So, there can only be one person who gets an entitlement to the commission check: typically the real estate person on the contract.

There is a formal agreement to establish this business relationship. It is done through signing a contract called, the Buyer/ Tenant Representation agreement. There are some factual information in this agreement but the most important thing to note here is that this relationship has a time-stamp. It has a "start" time/ date and an "end" time/ date. During this time, the client is expected to work with the real estate broker exclusively, ie. not calling other brokers/ agents in town - as if another client representation is established. The next most important part of the agreement is understanding how the broker/ agent is paid.

Why do real estate brokers/ agents require an exclusive business relationship?

The exclusive representation agreement is basically a contract of employment for the real estate brokers/ agents. When a client enters the buyer's representation agreement, the client buyer's interests are placed as top priority. Should a buyer's representation agreement is not established at the beginning, all brokers/ agents work for the seller - either as the exclusive agent or a sub-agent of the seller's agent.

What does all this mumbo-jumbo mean?

It all boils down to this, you want to sign a buyer's representation agreement with the real estate broker/ agent of your choice because it protects your interests. Anything private and personal that would hurt your purchase should not be shared with the seller will be protected by the broker/ agent that you made an agreement with.

Since the real estate brokers/ agents are independent contractors, they only get paid when a client completes a transaction. The rest of the time ie. showing houses, booking appointments, researching properties, etc. are non-paid hours. This is by far the most important reason why real estate brokers/ agents would want an exclusive relationship with a client. A real estate broker/ agent would not do his/ her job correctly.

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