Real estate transactions can be quite tedious, however, they are vital legal processes that require careful attention to detail. One important aspect of a real estate purchase that should never be overlooked is the buyer representation agreement, commonly known as the BRA. This agreement is a legally binding document that outlines the terms and conditions of the relationship between the homebuyer and their real estate agent.
In Ontario, the BRA is a standard document used by most real estate agents. Its purpose is to provide a clear understanding of the responsibilities, obligations, and compensation arrangements between the buyer and their agent. The agreement outlines the commission rate, which is the fee paid to the agent for their services.
The BRA is signed by the buyer and their agent and is valid for a designated period of time. During this time, the buyer agrees to work exclusively with the agent and not engage the services of any other agent. The agent is obligated to provide the buyer with full representation, which includes negotiating on their behalf and protecting their interests throughout the home buying process.
The commission rate specified in the BRA is a percentage of the purchase price of the property. This commission is split between the buyer`s agent and the seller`s agent. In Ontario, the average commission rate is between 2.5% to 3.5% of the purchase price.
It is important to note that the commission is only payable upon the successful completion of the transaction. If the purchase falls through, the buyer`s agent is not entitled to any commission. However, if the buyer breaches the agreement by purchasing a property through another agent or privately during the term of the BRA, the original agent may be entitled to a commission on the sale.
In summary, the buyer representation agreement is a crucial document that protects both the buyer and their agent in a real estate transaction. It is important to review this agreement carefully before signing and discuss any questions or concerns with your agent. By doing so, you can ensure a smooth and successful home buying experience.