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The Exclusive Buyer Broker Agreement in Utah Explained by a Real Estate Agent

Oh, hey…

How’s it going?

I’m Alixander, real estate agent with SLC Real Estate Agency.

And today is a really fun video…

I’m going to go ahead and get things started…

We’re going to do a deep dive, like I said in my last video of a couple of contracts, and the first contract that we’re going to work with today is the exclusive buyer broker agreement.

We work with a lot of buyers

I work with this agreement more than probably 90% of my other agreements. And that’s mostly because in today’s market space… well… there’s a lot of buyers.

There’s a lot of buyers, and they have a huge demand for the limited supply that’s out there.

So I thought it’d be a lot of fun to just dive right into it.

Okay.

So here we are at my computer, and we’re going to be jumping into the Utahrealestate.com website so that you can see where I get these.

All right.

The UtahRealEstate.com

Okay, this is the Utahrealestate.com website.

This is where all the Realtors in the state of Utah pay their dues to have access to all the listings that we put here, every single one of them.

So that’s a big deal.

That’s a really big deal! to you and everyone else.

So let’s go ahead and jump into this.

And you all don’t need to know my password.

I mean I can tell it to you but you know, it’s not really going to do much good because…

The Forms of UtahRealEstate.com

The important thing here is we’re going to jump to the forms library.

Now, the forms of the use our realestate.com website are carefully manicured and some of them are State regulated.

So like the real estate purchase contract.

But we’re going to the exclusive buyer broker agreement.

Let’s see exclusive buyer broker agreement. Blamo!

Okay, so we’re going to go through this agreement real quick, and we’re going to talk about what it means and how it impacts you, which is, you know, a really big deal for a lot of people.

What does it mean to make an agreement?

What does it mean what is making an agreement, or what does it mean to to contract the independent contractor that is a real estate agent?

Well, I’m going to show you in this agreement what that really means.

So… let’s go ahead and jump into it.

The Exclusive Buyer-Broker Agreement

Now.

The exclusive buyer broker agreement and agency disclosure is entered into between (the “company”)

Which right here, you can see, KW Salt Lake City Keller Williams Real Estate and you, right?

Here.

And because the buyer is retaining the company while the term of the agreement holds me, Alixander Court, buyer’s agent.

If you didn’t know… I’m Alixander Court.

So yeah, you’re hiring me to represent you in the market space.

So as it says right here.

As the authorized agent for the company, starting on the effective date as defined in section 15[…]

…and that’s below…

[…] and ending at 5:00 P.M.

So keeping keeping this in mind…

I love being a real estate agent.

It’s one of the funnest things about my job, is that when I get to come to one of these rooms, just like this, we get to sit down and talk about what it is that you need and how we can successfully achieve that.

I just get so stoked.

I get so jazzed!

And when people are like yes, let’s do this.

I’m like, yeah, let’s do this!

It’s one of my favorite things.

Term of the Agreement

Let’s talk about what this term of the agreement is.

So the term of the agreement is the time or the result that we’re looking for.

It’s assumed that we’re in this to buy something. That’s essentially what this agreement means, is that we are in this to buy something and in that we’re trying to buy something, that being the result we’re looking for…

well, that’s what this agreement is about.

So the agreement ends, for the most part, once you bought the property, or on a specific day.

So

The closing of the acquisition of a property, or on [such and such] day of [such and such] month, of [such and such a year].

How cool is that?

And we also get to specify, quite simply, in what county, or what particular property.

Personally, I like to say the last day of the year 2020 or 21 or 22 or whatever because everybody’s buying process takes time. Everybody does, and I don’t mind giving my time to the buyer. I don’t.

I mean…

Clarification about “The Buyer”

I’m not trying to say, like, you know “the buyer”, like some weird abstract concept, like, YOU are that person.

Right?

And I don’t mind giving you my time to make this work, because everybody’s process takes time.

It’s not fair to say that, “We are going to get this done tomorrow! Today!”

It’s not fair!

It’s not fair to me, it’s not fair to you. I’m helping other customers that I’ve already made these agreements with. You’re not the only one, okay?

And the fact of the matter is that it’s…

Buying Real Estate takes time

It’s not like buying an apple.

It’s just really not.

You can go to the store, pick up an apple, give them your money, and be done.

In real estate transaction, it’s a little bit more difficult. It takes a little bit more finesse and some time.

So keeping that in mind. Let’s take some time, and take advantage of that time, because we only have so much time in this life.

Back to the agreement

All right, so 2020 and we’re going to look at any County.

Yeah, okay and go ahead and leave this with a mark here.

The Brokerage Fee

Or, Real Estate Commissions

So let’s talk about brokerage fee real quick.

So one of the cool things about being a real estate agent is working on 100% commissions.

It’s cool because the chance to make so much money is enticing enough to propel me to move forward. It really does propel me to move forward. No one pays me a wage. I go after each paycheck because that means I get to help each client with the result that they’re looking for.

I’m not in here to punch a clock, do the job whether it’s good bad or ugly, punch out at the end of the day.

This is about results. That’s what this is about. And anybody who gets in their head that all I could just, you know, hum-ho through the market space….

They’ve got that wrong.

You gotta have hustle, you gotta have grit, and you gotta make this done quick.

Because otherwise you’re going to lose out, and nobody wants to lose out.

Nobody.

It sucks.

So the Brokerage Fee.

The Brokerage fee is super rad, especially being a Realtor, because most listings that we’re going to be looking at…

and when I say most, I mean, almost all of them, that you see on all the different roster sites…

A Quick Word About Roster Sites

And when we say roster sites…

Here’s your plug guys:

That syndicate the information from the Utahrealestate.com website, those listings have our listings. They syndicate utahrealestate.com listings to their website to act as lead generators, and then they have agents pay advertising dollars to have space on those websites.

So they are a really fancy way to advertise to you.

At the end of the day, the cleanest, purest, listings are from utahrealestate.com, when we’re talking about the state of Utah.

Okay.

Back To The Brokerage Fee

So let’s go ahead, jump back in.

The Brokerage fee for the most part is already covered by the listing agent. They’ve already negotiated with their client a commission to the buyer’s agent commission and it says that in here… right… Let’s see.

[…] the buyer agent commission (“BAC”) paid to the Company by the listing brokerage shall satisfy the buyers obligation […]

Where does the three percent commission come from?

The industry standard is 3%.

Think about that.

The standard is 3%.

On a $100,000, that’s a $3,000 paycheck.

I can tell you I really do appreciate that.

And I know a lot of people get stuck on this.

The commission’s are big, they are massive.

A Note About Commission Listings or For Sale By Owners Properties Not Offering A Commission

And so when we go after a property where the listing agent hasn’t already negotiated with the seller,

“Hey, this is what we’re willing to pay a buyer’s agent to bring us a fully-qualified buyer.”

That means, when I talk to my buyer and I’m performing the service…

When I’m talking to you and I’m like,

“Alright, that For Sale By Owner, that’s not going to be an agent commission to make sure that we have all the paperwork in place, and that these negotiations go smoothly. Well that’s going to be a cost on you. Are you prepared for that? And it will be three percent. Any questions?”

Comment below, that would be great.

When is the Brokerage Fee Due?

When do I have pay the Brokerage Fee?

Okay, so moving forward.

The Brokerage fee is due upon closing of the recording or closing of any property from any party that is connected with the buyer.

Workarounds and Backdoor dealing is not allowed

So let’s say for instance that you know, John comes in and he loves this real estate agency and he’s so excited to work with work with us and have us work for him, and we’re so stoked for that.

And then what ends up happening is he’s like, “K, Jane, I’m going to have you go and buy the property so that we can, like, get around this.”

That’s not how this works.

We would assume, we like to assume that you’re the kind of person that’s a street dealer. We also know that in the market space a lot of people like to be back door dealers and workarounds.

And yeah… it’s just… Let’s not do that.

Okay?

So the brokerage fee essentially says, “Hey, we’re gonna help you. And anybody who is affiliated with you moving forward is a part of you. So don’t just try and go around us.

Okay?

The Protection Period

And that’s where we lead into what’s called a Protection Period.

That for two years if you try to buy this property behind our back…

We showed it to you. We educated you. We marketed it to you and that takes:

  • time
  • money
  • energy
  • grit
  • determination
  • and all that stuff…

…to get it to you.

So we’re protecting our time investment towards you.

And I think that’s pretty fair.

So moving forward.

The Buyers Representation

So what you represent, or what you’re what you are going to disclose, is just a couple of things. And We’re going to talk about that real fast.

In Communication With Other Real Estate Agents…

So first here we have

[…] in all Communications with other real estate agents […]

“In all Communications with other real estate agents,” You’re going to tell them you’re in exclusive buyer broker agreement.

This is like, IMPORTANT.

OK, it hurts my feelings when I’m talking to someone, I’m talking to you, and you say to me, “Hey, I know that we’re, like, already shopping for homes… and, like, we’re already doing things… but my agent let me know that I’m supposed to tell you that you need to stop. You’re my best friend, and I didn’t want to hurt your feelings, and so I just let you show me properties, and I’m really excited about this house, and I’m going to buy this house, but my Agents going to be the one who helps me close on it.”

That’s going to break my heart.

So just so we don’t step on anybody’s toes here, just communicate with all other agents, including me, if you’ve already gone through this agreement with somebody.

It’s just courtesy.

Come on. Move on.

Furnish Personal and Financial Information

All right, so then the next thing I want to do is…

[…] furnish the buyer’s agent with relevant personal and financial information to facilitate the buyers ability to acquire property[…]

So in the video about fiduciary duties we talked about how your agents’ responsibility to your finances and your accounts is such, is so important that it is… it’s one of his duties…

And as such, when we need your financial information in order to close this deal, or to, you know, facilitate the seller going with you. We would hope that you would furnish any relevant financial information over to us.

For instance, say you need to get your loan docs in order and you have to go to work and you won’t be able to obtain them or get hard copies to the loan officer in time.

Well guess what?

I can help with that.

I can literally take that document that you needed to have wet signed to your loan officer. It’s not a big deal. It’s part of our duties, and we would hope that you would furnish that for us.

Evaluate The Physical & Legal Condition of the Property

All right, so moving forward.

[…]Exercise care and diligence in evaluating the physical and legal property legal condition of the property[…}

Evaluate the Physical Condition of the Property

So you are going to look at this property, right?.

You are going to go look at it. You’re going to go and check it out. Make sure it’s good enough for you. And if not, you’re going to hire someone to go look at it that you trust, and it’s going to do, like, a home inspection?

Because that’s… that’s huge.

Especially if you’re going to live in it.

I think that’d be a big deal.

Evaluate the Legal Condition of the Property

The legal condition.

We’ll furnish you all the information that you need to determine whether or not the legal condition is sufficient to you.

Okay, so moving forward.

Hold Harmless

You are going to…

Hold harmless the company[…]

So you’re not going to sue the company, or me, the agent, in the event of injury, any kind of injury.

If you slip and fall during your showing, don’t sue the company and don’t sue me.

Just, please, don’t.

I’m done with that.

Okay.

Buyer’s Due Diligence Checklist & Wire Fraud Alert Disclosure

So..

[…] upon signing the exclusive buyer broker agreement personally review and sign the buyer due diligence checklist and wire fraud alert disclosure […]

The Buyer’s Due Diligence Checklist

We will in fact go through those another time.

Not now in this video.

But those are incredible documents that will keep you super educated on things you need to know about, with regards to your property.

Wire Fraud Alert Disclosure

And also it pertains to the massive amount of wire fraud that is occurring across this Nation.

I mean people are getting emails now…

Once people find out about wire fraud…

For instance. So you’re you’re in your email client, you get this email and it says, “Wire all this money today to the title company!” because they found out that you’re already communicating with a real estate agent.

And you’re like, “Oh, okay.”

So you like wire on your money to some title company?

If you’re not getting that information directly from the title company in a secure fashion, I would never tell you to wire the money to some company that is not verified by that company.

And yeah, I just…

It’s a big deal. So moving forward.

Disclose Interest in Properties

Disclose to the buyer’s agent any properties that you have an interest in or that you’re presently negotiating.

I think that’s fair, right?

I think that if you are already in the market space buying things, or already involved in the marketspace in terms of properties that you’re interested in.

You should just tell me, right?

Agency Relationships

Buyer’s agency disclosures, or agency relationships, or duties of a buyer’s agent.

We talked about this a little bit in our fiduciary duties video and I wanted to go through a little bit tighter.

So in terms of the duties of the buyer’s agent, there’s a couple things to keep in mind.

The Agent and Broker’s First Responsibility

First and foremost the buyer’s agent and the broker is essentially our job is to locate properties as referenced in this document. In referencing this document, we are going to find you properties. We want you to consider them, both the physical and legal condition of the property. to determine whether or not it’s something you want to close on.

That’s what this agreement about.

Permission to assign other agents in the office

So you’re also going to give us permission, in the event of, right,

[…] to appoint another agent in the company to also represent the buyer […]

So let’s say for instance that it’s 7:30 at night.

You want to go take a look at this house and it’s in the part of town that I can’t reach quickly or even conveniently.

Then I would call up one of the other agents in the marketplace, and I would say, “Hey, would you kindly go open the door for such and such,” and they would say, “Sure we’d love to!”

“Great.”

So we would have another agent open the door for you.

I hope that’s not an inconvenience to you, to you to have someone open the door that you want to go see.

We trust our agents around here.

So let’s let’s keep moving.

Fiduciary Duties of an Agent

And then lastly the other thing we got to look at here and this just reiterates our fiduciary duties:

  • loyalty
  • obedience
  • full disclosure
  • confidentiality
  • reasonable care
  • and any other duties required by law

We’ve already gone into that video in general, you can check it out over there.

Duties of a Limited Agent

So duties of the limited agent…

Sometimes in transaction, sometimes, The Brokerage is representing the buyer and the seller.

When that happens we have to have consent from both parties to make sure that they’re okay with that, and in receiving that consent we have to be neutral moving forward with that transaction.

We may not be particularly, as we look through this:

[…] because the agents can’t provide both parties undivided loyalty, confidentiality, and disclosure. For this reason, the limited agent is bound by neutrality and being neutral not disclose to either party information likely to weaken the bargaining position of the other – for example, the highest price […] or the lowest price […] The Limited Agent will be required to disclose information given to the agent in confidence by the other party, if failure to disclose such information would be material misrepresentation of the property.

I think that’s fair.

We’re not trying to lie to anybody here.

We’re definitely not trying to lie to you.

And if we’re having to represent both sides… well, if you tell me that, “Yeah, we had that flood” and that impacts the property but you say, “ShhShhh, Alix don’t say anything. Don’t be a blabbermouth. It’s going to ruin this deal.”

Well…

That would be misrepresenting the property, now wouldn’t it? That’s illegal, and ultimately I would have an obligation to tell the buyer if there’s ever been a flood if I know about it.

But say, if it’s something simple like, for instance say, grandma died in the house.

You got a disclosed that? Not always.

In the state of Utah, and as long as my memory serves me right and the law has a change for recording this video. We don’t have to disclose things like death. But when asked, I do have to disclose.

So misrepresentation is the big thing here, and we’ll be able to explore that a little bit more later.

Professional Advice

I am trained in marketing real estate

So the professional advice…

This is my professional advice to you guys…

[..] the company and the buyer’s agent are trained in marketing of Real Estate […]

If you didn’t know, that’s my job. I am a real estate marketer. I market real estate, to the market. That’s my job. That’s my expert job. I market properties to you the buyer, or I market your property as the seller.

So that’s what I do.

Keeping that in mind:

We’re not trained or licensed to provide the buyer with professional advise regarding the physical condition of any property or regarding legal or tax matters.

I’m not a tax accountant. I’m not a property inspector. I’m not a plumber. I’m not roofer. I’m not… did I say electrician already? I’m not an attorney. I’m just not any of those things.

I’m a real estate agent.

That’s what I and I just want to be clear about that.

All right, so if you want to get that information, we go to those experts.

Okay.

With regards to the companies I might recommend

So

Any recommendations for third-party services made by the company in the buyer’s agent do not guarantee – guarantee the buyer satisfaction of the third party and should not be as seen as a warranty of any kind to the level of service which will be provided by a third-party companies.

I cannot, in any way, guarantee the service of other companies. They’re not my companies. I don’t own them, I’m not affiliated with them, and as such, even if I am affiliated with them in any way, I can’t guarantee that they’re going to satisfy your needs.

I can guarantee that I will. To the best of my abilities. That’s my job.

And if I cannot satisfy your guarantees…

Well, then I failed in my agreement, we tear this up, and call it a day.

It’s no big deal.

So that’s my money back guarantee right there, except you haven’t put any money forward yet.

So anyway moving forward.

Dispute Resolution

So if we have any disagreements that might happen…

This is what I say to everybody, everybody that I sit with in this room or in any room, where I have to talk about this agreement, I say, “If we have any disagreements, what’s the first thing that we’re going to do about it?”

Comment below, seriously.

If we have a disagreement was the first thing we’re going to do, to resolve it.

Comment below. The person with the correct answer, the first correct answer, I’ll get you coffee. Let’s do it. Seriously, let’s do it.

Okay.

What are we going to do?

We’re going to talk about it.

We’re going to communicate. We’re going to have a conversation about the disagreement. We have any disagreements, and we talk about it, we will be able to resolve it.

Did you know that that’s a lot cheaper than attorneys?

Now that you know that, if for any reason we have any disagreements that we cannot resolve by amicable communication between us, we get to go and have attorneys resolve it with mediation.

That is so expensive. It is so expensive. I don’t want to do it, you don’t do and the fact of the matter is…

Attorney Fees/Governing Law

This here, the Section 8, says that the loser pays the fees.

Who wants to lose?

Let’s just not do that. Let’s just talk about it, work it out, and at the end of the day, if doesn’t work out… Well, hopefully we can just part ways.

But if we have to have resolution through mediation, the loser is going to pay the fees.

I hate to lose, and I love to win.

That’s why I am in the business that I am in because we are looking to help you win the house you’re looking for. That’s what we’re trying to do.

Buyer Authorizations

So moving forward Section 9 Buyers Authorizations…

Disclose Sold Data

Big thing here is that you’re going to authorize us to keep the sold data on the Utahrealestate.com website. That’s kind of a big deal.

[…] final terms and sale price of the property acquired […]

It helps us build comparables for when we go and do current market analysis of properties. And if you haven’t seen me go through one of those videos and I get to go through another one.

They’re fantastic.

And we’re very grateful that you let us disclose the Utahrealestate.com website.

Utah Affordable Housing Opportunity Fund

So the next thing that you’re going to authorize us is that we can use your earnest money by putting it in an interest-bearing account and that interest creates affordable housing throughout the state.

It’s the Utah Association of Realtors Housing Opportunity Fund (UARHOF)

And it creates affordable housing.

So as long as you’re okay with those two things…

I think that affordable housing for good thing. I hope that you think it’s a good thing. If you don’t think that Utah Housing is a good thing or affordable housing for women who can’t afford it for, you know, elderly folks who can’t afford housing, or vets who can’t afford housing… like, there are so many people who take advantage of affordable housing and if you’re not okay with creating opportunities for them, you just have to let me know.

It’s not like I’m going to be disappointed. It’s not like I’m going to be upset. It’s just… we just have about it, we just have to talk about it.

So moving forward.

Attachment

Generally speaking, if you do have anything in this agreement that you don’t really like, and you want to work with, what we can build an attachment, right?

So we can add an attachment to this document here, we can attach to this document any addendums…

Say you don’t like that… creating affordable housing in the state of Utah.

Well, we can create an addendum. that says you’re not okay with earnest money being in an interest-bearing account.

Okay, not a big deal. I’ll just write it up.

We’re not going to alter this document because that would compromise the integrity of the document, but we will propose a subsequent document that is in conjunction this one. 

So they are, generally speaking, there’s no other attachments to this document. So there’s nothing attached other than what is referenced in this document.

Equal Housing Opportunity

So we are Equal Housing here.

If you are willing, able, ready, motivated, let’s move forward, okay?

I think that’s a really big deal and I’m not one to be discriminatory or prejudice against someone who’s willing, able, ready, and motivated to use the The SLC Real Estate Agency as their real estate agency of choice in the market space.

Why would I be prejudice?

At the end of the day, you want something and my job as the salesperson is to get you what you want. Why would I discriminate? Why would I be prejudice against that?

You want to close, I have a commitment to close.

I’m here to win, not to lose.

I hate to lose.

So let’s win, and win together.

Electronic Transmission & Counter Parts

As we use electronic transmission counterparts.

Since the digital era, we can now have things esigned or they can be faxed or they can be signed in counterparts, say they have to be signed at different times.

So that’s a big thing here.

Due on Sale Clause

Due-on-sale, number 13…

And this is more disclosure than anything else but it is important to know.

I’m going to go ahead and go through real fast.

Certain types of transactions may trigger what is commonly referred to as a “due-on-sale” clause. A “due-on-sale” clause typically states that the seller’s lender or mortgagee may call the loan due and payable in full if the seller participates in certain types of transactions. These types of transactions may include, but are not limited to, transactions where: (a) The sale of the property does not result in the underlying debt being paid in full; (b) The parties enter into a seller-financed transaction; (c) A lease option agreement is entered into; or (d) Any other unauthorized transfer of title to the Property has occurred without thelender’sconsent.

So that’s a big reason. That’s a very big reason why we go and get a mortgage is to be able to leverage out the underlying debt and remove it from the property with this financial tool.

So yeah comment below.

That’s a big deal.

Effective Date, and Undersigned

Now the last thing here is the effective date.

The effective day is all it says,

This Exclusive Buyer-Broker Agreement is entered into and is effective as of the date: (a) The Buyer and the authorized Buyer’s Agent or Broker have signed this Exclusive Buyer-Broker Agreement;

If your good with this, and you want the SLC Real Estate Agency to represent you in the market space as a buyer and bring properties for you to consider both physically and legally, then you know, by all means go ahead and authorize it there.

And we appreciate the opportunity to to be considered. We do think of ourselves a little different. We hope that this kind of opens up the box a little bit so you can see outside of it and understand a little bit more about this agreement.

So supposing you’re okay with that, I think that that’s fair right, supposing you’re okay with this, then you would authorize it. You either esign it because you’re not physically in my presence, or you would esign, I think I just said that…

You would physically sign and…

What you’ll learn really quick about me is I don’t like saying “sign” because this is not like a loan. I’m not loaning you money. I’m say authorize, that’s what I say, “Would you kindly authorized this agreement?”

“You are the author to this agreement, if you would please…”

And the cool thing is here, the reason why I like the word authorize is because I get to co-authorize this with you. If you are the author here and your partner authors here, then I will Author here and we’ve authored this agreement into being

Pretty cool, huh?

Conclusion

So yeah, that’s the exclusive buyer broker agreement in a nutshell, and I appreciate you, you know commenting where you see things that were interesting to you or that you’d want to know more about. If you have any questions about the Buyer Broker Agreement that is, you know, relevant to you, please just comment below. Other people are probably having the same questions. If you have any conundrums, like things that make you upset, like “Why would I ever!” Just comment below, that would be super helpful.

So I’m Alixander, SLC Real Estate Agency.

Another video. So glad we got it done. Thank you for:

We really do appreciate that.

And yeah, please:

  • share us on Facebook,
  • or the other social media that you participate in so that other people can be educated. (IG, T)

Yeah!

Hey, I’m Alexander, SLC Real Estate Agency.

Have a great day.

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