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Maryland Sign Travel Agency Agreement Secure

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hello everybody and welcome to the Maryland exclusive by a representation agreement class with the Brooks group here at Keller Williams Realty and to start off I just wanted to say this is an important class the by our agreement is short and only three pages but it's very important that you learn how to master delivering and explaining this agreement to your clients because oftentimes new agents especially develop a lot of anxiety around the buyer agreement and getting a client to sign it even though it's such a simple and natural thing that simply creates an agency relationship between yourself and your client it is in fact what makes your client a client okay so we're gonna start off here looking at the exclusive buyer representation agreement page one here and it starts off relatively simple we're gonna start off with just the date and it's the date that you're gonna put this by our agreement together and send it off to your buyer paragraph one is gonna be your buyers information mailing address telephone number but specifically you've got to have a first and last name and if you're gonna have two buyers they both need to be on there paragraph number two brokers information office address etc make sure all your information is complete and in fact it'd be best for you to set up your information as a template so you're not having to put in your same information every time you do a new buyer agreement and moving along to paragraph three the buyer authorization paragraph three is really what establishes the scope of what it is that you're gonna be doing this is the purpose for having this agreement by our authorization broker is hereby authorized by the undersigned buyer or the authorized representative of buyer or buyers to represent the buyer as the exclusive real estate broker in the acquisition of real property which shall include cooperatives as used in this agreement acquisition of real property shall include any purchase or lease of property the term seller shall include lessor the term buyer shall include lessee the buyer seeks the following type of property and then you're going to have to put there what type of property it is they seek in our case here by default we always have in here Maryland residential real estate but you've got to put something in there moving along to paragraph four and this is an important one in it's one that I see the biggest number of mistakes when agents fill out their their agency agreement buyer agency terms rights of parties following expiration or termination of agreement this Agreement shall be effective on then put in the starting date and shall continue until midnight on and then put in the ending date usually I put in 90 days but you can put in as many days as you like unless terminated in accordance with the provisions of this section now this is very important because Maryland law says you have to have a beginning date and an ending date there are no open buyer agreements or listing agreements now one other thing also be very careful on that second date they're the ending date of your listing agreement especially as you get closer to a calendar year and where that year rolls over into the next year say 2016 rolling into an end date in 2017 a lot of times people by mistake keep the year the same year that they're in and therefore it messes up your dates where it causes your ending date to be before your beginning date so just pay attention to that okay as required under Section 17 - 534 subsection B paragraph 5 of the Maryland real estate brokers Act yes like that the parties agree to the following provisions of the termination of this agreement and then put in whatever the terms are that you agree to terminate that agreement in this case here I like to put in there a Creed agreed upon by both parties in writing or three days written notice from agent to buyer now I like it to say agree to mom by both parties meaning if they decide they want to terminate this agreement I want to have the final say whether or not I'm gonna release them which is why it has to be agreed on by both parties or the next section allows me to unilaterally cancel it myself if I give them three days notice okay an expiration or termination of this by buyer or broker shall be subject to the provisions of paragraph 7 of this agreement in paragraph 7 of this agreement shall survive the expiration or termination of this agreement notwithstanding the rights of the parties to terminate this agreement as provided here in broker and broker sole and absolute discretion may terminate this agreement at any time and effective immediately in the event that buyer provides any false information or misrepresents any fact a broker or other third party this means that if your buyer lies to the listing agent that any of these third part not the listing agent but the what could be the listing agent or it could be the lender or any other person involved in the transaction then we have the ability to withdraw immediately if a contract of sale entered into by buyer during the buyer agency term which provides for settlement to occur after the expiration of the buyer agency term this agreement shall be automatically extended until settlement has occurred or until the contract of sale is released in writing by the parties so what that means is let's say we have a 90 day buyer agreement if we go under contract after say 80 days but the settlement is isn't it for another 45 days after that this buyer agreement automatically extends until settlement which is great moving along paragraph 5 buyer responsibilities exclusive relationship with broker buyer will work exclusively with broker during the term of this relationship this means that the buyer can't go out and use three other different buyer agents to find them the perfect property I see buyers wanting to do this more when it comes to investor buyers that just don't know how it works I see a lot of them try and do that but under this agreement they have to work with you exclusively subparagraph B financial information buyer will furnish broker with necessary financial and personal information to reasonably establish buyers ability to purchase a property this means that the buyer is agreeing to turn over their information and get pre-qualified basically they have to be able to show to us that they have the ability to purchase the property signs or advertisements for property if buyer sees any signs rad vert Iseman for properties being offered for sale via will not contact the seller or agent of the seller it but will first contact broker named herein who will provide information about the properties and then make arrangements to see them this means that the buyer is agreeing not to call the seller off of signs or go in and see open houses without notifying you first so we have a chance to let that other agent know this is for the purpose of not causing any confusion with procuring costs because that can be a hassle and finally D new home builders and open houses we already talked about open houses but new home builders in order to avoid the possibility of confusion over the agency relationship and misunderstandings about liability for compensation buyer agrees not to make a first visit to any new home builders model nor contact any other agents representing sellers or new homes without being accompanied by broker by re is not to enter open house properties unless accompanied by broker or after had broker make arrangements with the listing broker so anyway like we said they're agreeing not to go into new construction or open houses without us making the arrangement first because a new home construction builder if we don't call and register that buyer ahead of time and if that buyer goes without us that new home builder will not pay us and moving along to paragraph six now those paragraph five those were the buyers responsibilities what they've agreed to do for us and now paragraph six will be our responsibilities to them the agent and broker agree to locate real property use professional knowledge and skills to locate and present real property which is available for purchase and suitable to the buyers needs so that says we are going to search for properties for them we're not just gonna sit there and wait for them to bring properties to us but we're gonna locate property for them and finally be assist the buyer assist buyer through the process of property acquisition we're gonna help them with the whole entire process where it's putting an offer together the home ins affection etc and see represent buyers interests represent the interests of the buyer in all negotiations and transactions regarding the acquisition of real property paragraph 7 brokers compensation the amount of broker compensation is not prescribed by law or established by any membership organization with which broker is affiliated and paragraph a here compensation to be paid by buyer in the event of a sale or lease the compensation to be paid by buyer to broker shall be and this here you get to put what the compensation is that that you're requiring in this case here I have in here written paid by seller / m-ras + admin fee of 495 from buyer if I are breach is this agreement 3% of the purchase price paid by buyer now I have to point out in this case that that compensation that's written in there is poorly worded and is actually weak if there were any sort of disagreement here it should actually say 3% of the sale price or some sort of flat fee in case there's a breach so that this can be enforceable because just saying 3% of purchase price paid by buyer well what if we there was a breach and we weren't actually involved with a house under contract then what is 3% so that probably wouldn't be enforceable so be very specific in that section there okay the compensation shall be deemed to have been earned by broker and shall be due and payable to broker if one during the term of this agreement or any extension thereof the buyer any person or entity acting on buyers behalf execute a written agreement to purchase or lease any property through the efforts of anyone including the buyer in which the buyer within 72 hours thereof shall furnish to broker a copy of such written agreement so this means we're entitled to the Commission if the buyer puts a property under contract whether through you or on their own somewhere you're entitled to a commission on that property from the time it goes under contract and you'll see here for run down that just waiting until settlement is a courtesy but not required and finally if during the period of 180 days now you can put any period you like in there 180 is a little bit on the long end I've seen a lot of times agents will put 90 days in there I like it to be a hundred and eighty days just in case so these buyers don't get any funny ideas this is a non circumvention clause here okay once again if during the period of 180 days following the expiration or termination of this Agreement buyer executes a written agreement to purchase or lease any property that the buyer inspected made inquiry about or negotiated to purchase during the term of this Agreement or any extension thereof in which event buyer within 72 hours thereof shall furnish broke or a copy of such written agreement this means that even after my broker agreement expires if they purchase a home that we showed them they made inquiry about etc for 180 days after the expiration of this agreement we still are entitled to compensation on that property like I say this is a non circumvention clause basically so that they can't just cancel the agreement with you and then go deal directly with a seller or listing agent and to buyer defaults or voluntarily agrees to terminate a sale this means that let's say a buyer goes under contract with a property everything's going fine their financing is qualified and they just decide on a whim or for any reason whatsoever that they want to withdraw from purchasing that property now this doesn't count for the home inspections etcetera but if they just want to withdraw for whatever reason you're still entitled to commission on the sale now three buyer breaches this agreement so you're entitled to the commission on the sale if the buyer breaches this agreement for whatever reason and I could see say paragraph five the buyer responsibilities or some of these other things that would entitle you to a commission the compensation due broke or shall be paid at settlement as a convenient to buyer buyer acknowledges and agrees that settlement on the property shall not be a condition precedent to buyer's obligation to broker as Hyrum provided so that means that settlement itself is not a condition for you earning the commission then going under contract is if broker prevails in any action brought to obtain payment to the compensation broker shall also be entitled to recover in such action broker's reasonable attorneys fees and court costs so that means if we have to sue a client to get a commission then we're also going to be entitled to reasonable attorneys fees that it cost to bring that action by Richelle have no and that's in the event that you win of course that lawsuit if you lose you lose and that's the end of it agreement with any other licensed real estate broker following the expiration of this agreement or any extension thereof excuse me fire shall have no obligation to pay the compensation of broker if buyer enters into a buyer agency agreement with any other licensed real estate broker following the expiration of this agreement or any extension thereof or following the termination of this agreement as herein provided unless such termination by buyer shall have been made for the purpose of avoiding the obligation of buyer to pay the compensation to broker okay section B fee paid by seller broker is authorized to receive compensation from the listing broker seller compensation may be offered from the listing broker to broker through the multiple listing service or from seller as negotiated by broker and seller for real property which is not listed with another broker the amount of compensation received by broker from a listing broker or from a seller shall be credited against the compensation agreed upon in paragraph 7 a buyer shall be obligated to pay any difference between the amount owed and the amount paid by the listing broker or seller in the event the amount of compensation offered by the listing broker / seller is greater than that specified in paragraph 7 a buyer authorizes broker to receive such compensation and to retain any such additional compensation without pro ration or rebate to buyer the amount of any such payment made by listing broker seller shall be with the sellers and buyers prior knowledge and consent and shall in no way affecting of the broker to act on behalf of the buyer in the transaction so if in paragraph seven above you gave say a specific number and it was let's say you said three percent of the total sales price and in the MLS the seller only offered two and a half and the buyer agreed to that then they'd be obligated to pay you the extra half percent out of their side of the transaction moving on to paragraph eight disclaimer and limitations eight limitations of brokers ability buyer acknowledges that broker is being retained solely as a real estate agent and not as an attorney tax advisor lender appraiser surveyor structural engineer certified home inspector or other professional service provider buyer has been advised to seek professional advice for legal tax and other matters so this lets them know we aren't all of those things even though sometimes it can seem like we are we have to be very careful not to give legal advice tax advice etcetera and of course refer them to the professional that they may need the advice from such as an attorney I'm inspector etc be representation of other buyers buyer acknowledges that broker may represent other buyers and that other potential buyers may consider make offers on or purchase properties through broker buyer consents to brokers representation of other buyers before during and after the expiration of this agreement this lets them know even though we have an exclusive buyer representation agreement with them they aren't the aren't exclusive buyers wrking with us and see subsequent offers upon entering into a contract of sale or lease pursuant to this buyer agency agreement broker shall have no further obligation here under two procure any subsequent properties for buyer so once we've put them under contract we have no more obligation to procure further properties ministerial acts buyer hereby consent to and authorizes broker and brokers agents to provide ministerial acts as defined by law on behalf of buyer to third persons in connection with the purchase of the property third persons may be say the the listing agent may be the lender etc it just allows us to do ministerial acts which are say simple paperwork things like that confidentiality of offers buyer acknowledges the possibility in its sellers or seller's representatives may not treat the existence terms or conditions of the buyers offer as confidential information paragraph 9 and this is a funny one because this exclusive buyer representation agreement form has not caught up with the recent changes as of October 2016 agency disclosure buyer acknowledges receipt of understanding whom real estate agents represent this has been superseded with new law that says that if they're signing this buyer represent a by a representation agency agreement then we no longer need an understanding agency disclosure paragraph 10 intra company agent representation when the buyer and seller are each represented by sales associates of the broker the broker is a dual agent dual agency is permitted only when disclosed and with the knowledge and written consent of both parties however the sales associate is signed by the broker as an intra company agent may continue to provide the same services that a buyer's agent can provide on a property listed with another broker so what that means is the brokers the dual agent and you still represent that buyer another agent in the office represents the seller in the event buyer elects to consent to dual agency buyer agrees to sign the required consent for dual agency form as published by the Maryland real estate Commission in the event buyer elects not to consider consent to dual agency buyer acknowledges and agrees that buyer will not be advised or shown properties stood by broker and will only be shown properties listed by other real estate brokers so what that means if they do not want to consent to dual agency we cannot show them properties listed by agents within our own office we can show them everything else but just not properties listed by ourselves or agents within our own office and finally paragraph eleven legal construction this agreement is binding upon the parties hereto and their personal representatives successors heirs and assigns in this agreement excuse me if this agreement is signed by more than one person it shall constitute the joint and several obligations of each that means they're both obligated to it together and they're obligated individually no matter what happens with the other this agreement contains the entire agreement of the parties and cannot be changed except by the written agreement of the parties hereto buyer warrants that there are no other existing agreements or conditions other than as set forth here here in this is a legally binding agreement if not understood seek competent legal tax and other professional advice buyer has not relied upon any statement or representation of broker except as set forth in this agreement this agreement shall survive execution and delivery of the deed and shall not be merged there in this agreement shall be interpreted and construed in accordance with the laws of the state of Maryland so paragraph 11 establishes the jurisdiction and the legal obligations have in case there was some sort of dispute in this agreement and finally paragraph 12a zdenda the addendum mark below which are hereby attached or made a part of this agreement understanding agency or consent for dual agency check for those if they are included and if there are any other special conditions to your agreement with your buyers then it'll go in the box below and finally they're going to sign it and we're going to sign it both parties need to sign it for it to be valid and a copy has to be delivered to both parties when we used that loop or any other electronic signature platform generally that will provide a signed copy to both parties so you're taking care of as far as that goes so just to reiterate I want you to remember again back to paragraph for the start and end date must be filled in and they must be filled in correctly pay attention especially to that second date for errors I've actually seen disputes before arise over broker agreements where one agent had picked up a new client a previous agent in a different brokerage claimed that they had a exclusive buyer agreement with that particular client they sent over the buyer agreement and that second date was messed up and was from the year before because they didn't check it and therefore it was no good and they they lost out on a bunch of money for that so just make sure and check those days to make sure they're correct also make sure you must have a termination provision so make sure you have a termination provision there so that we're in compliance with the law and finally your buyer agreement creates your agency relationship remember that so make sure you provide a whole bunch of value when you're picking up your clients so that the buyer agreement itself is just something nice and easy that creates that agency relationship because they want to be working with you they want you to be their agent and this is the tool and the mechanism with which we do that anyway I hope that you got a lot out of this class I hope you have a better understanding of the buyer agreement itself you should be able to go now and answer any questions that your buyer may have if they're a little reluctant about the buyer agreement now you should be able to have a full understanding of what's in it what it means what it does for them and how it should benefit everybody involved I want to thank everybody for attending this training session look forward to more sessions with you in the future and I hope you have a profitable week thank you

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