Showing Agreement vs. Exclusive Buyer Brokerage Agreement
Before touring a home with an HBR real estate professional who is working with you as a buyer, a written buyer agreement must be in place. Two options used by Florida Realtors are the Showing Agreement and the Exclusive Buyer Brokerage Agreement. They serve different purposes, and understanding the difference can make the process much clearer.
Why Buyers Are Asked to Sign Before Touring
A written buyer agreement clarifies the relationship, identifies services, addresses compensation and defines the scope of the brokerage relationship. Under current NAR/MLS policy, an MLS Participant working with a buyer must have a written buyer agreement in place before touring a home with that buyer. Because Hunt Brothers Realty participates in the MLS, HBR agents follow this requirement when working with buyers.
This requirement comes from the Realtor/MLS practice framework. It should not be confused with a Florida law requiring every person who enters a home for sale to first sign a buyer agreement. For example, an unrepresented consumer attending an open house where the real estate professional is working solely for the seller generally does not need a buyer agreement simply to attend the open house.
Different written agreements may satisfy the requirement depending on the brokerage, circumstances and form. Florida Realtors provides several options, including the Showing Agreement, Exclusive Buyer Brokerage Agreement and Property Pre-Touring Agreement. Here, we focus on the first two.
Showing Agreement: Limited to Specific Properties
The Florida Realtors Showing Agreement is generally non-exclusive and tied to properties identified in the agreement. It can describe the brokerage's services and compensation for those properties, making it useful when a buyer wants to tour one or more identified properties.
For example, if you identify five homes you want HBR to show you, those five properties can be identified in the Showing Agreement. The agreement applies to those properties rather than creating an exclusive relationship with HBR for your entire home search. It will also state the brokerage's compensation and the circumstances under which it may be owed.
Its scope is tied to the listed properties. Non-exclusive does not mean there are no obligations. Review the actual terms, including the duration and when compensation may be owed, and consider any other agreements you have already signed.
Exclusive Buyer Brokerage Agreement: An Ongoing Brokerage Relationship
An Exclusive Buyer Brokerage Agreement generally establishes an exclusive relationship between the buyer and brokerage for an agreed term and scope. It describes brokerage services and compensation and creates broader obligations than a property-specific Showing Agreement.
Instead of covering only a short list of properties, an exclusive agreement is designed for a buyer who has chosen a brokerage for the broader search and purchase process. Exclusivity is governed by the agreement's term and provisions; it is not permanent, and not every buyer must sign an exclusive agreement.
Exclusivity and the legal type of brokerage relationship are separate questions. Review the relationship and services stated in the actual form rather than assuming the word exclusive answers both.
Compare the Two Agreements
Showing Agreement
Exclusivity: Generally non-exclusive.
Property Scope: Specific identified properties.
Duration: Based on the agreement's terms.
Compensation: Stated in the written agreement and negotiable.
Services: Focused on listed properties and related services.
Typical Use: A buyer wants to tour specific properties under a limited agreement.
Exclusive Buyer Brokerage Agreement
Exclusivity: An exclusive relationship with the brokerage.
Property Scope: A broader search within the agreed scope.
Duration: The agreed term.
Compensation: Stated in the written agreement and negotiable.
Services: Broader buyer representation or brokerage services as described in the agreement.
Typical Use: A buyer has chosen the brokerage for broader representation.
How Compensation Fits In
Buyer agreements address broker compensation. Fees and commissions are negotiable and are not set by law. The agreement should state compensation in an objectively ascertainable way, meaning a clearly determinable amount or rate, rather than an open-ended promise.
Another party may contribute toward compensation in whole or in part, depending on the transaction and negotiations. A seller or listing broker contribution is not guaranteed. Understand the amount you agree to, when it may be owed and how any contribution is applied before signing. Broker compensation may come from the buyer or another permitted source, but the broker may not receive compensation for brokerage services that exceeds the amount or rate agreed to with the buyer.
How Hunt Brothers Realty Approaches Buyer Agreements
Hunt Brothers Realty uses the agreement that fits the relationship and the services being provided. In some situations, a buyer may begin with an agreement covering identified properties. In other situations, the buyer and brokerage may establish an exclusive relationship for the broader search and purchase process.
The agent should review scope, duration, services, compensation and exclusivity with you before you sign. Ask questions about anything unclear and review the actual agreement. Questions involving legal interpretation should go to an attorney.
What Buyers Should Review Before Signing
- Which properties or search does the agreement cover?
- Is the agreement exclusive or non-exclusive?
- How long does it last?
- What services will the brokerage provide?
- What compensation is stated?
- When can compensation be owed?
- What happens if another party contributes toward broker compensation?
- How can the agreement be modified or terminated?
- Who should you ask if you do not understand a provision?
Use the actual agreement to answer these questions. Modification and termination provisions vary; do not assume a general rule applies to your agreement.
Buyer Agreement vs. Purchase Contract
A buyer agreement governs the relationship between the buyer and brokerage. A purchase contract governs the buyer's acquisition of a specific property. They are separate agreements with different purposes.
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