Update: Beware of the so-called “Exclusive Buyer’s Agreement”
January 26, 2009 by Deyanira Bautista
Filed under Buying Real Estate, First Time Buyer
Note: This article has been modified from its original content. The article contained errors that were brought to our attention, and has been updated with the accurate information. Thanks to one of our readers!
Last week there was a comment left on the blog concerning the signing of an Exclusive Buyers Agreement.
It’s important to know that from all the real estate agreements we use in Montreal [Update] this form is not obligatory in order to work with a buying agent.
To explain what this agreement is about, here is a quote from Blog Frankly Realty
What is an “Exclusive Buyer Agency Agreement”?
This is a contract that a buyer is oftentimes asked to sign by a buyer agent Realtor. In part it commits the buyer to use this one agent exclusively for several months.
I know in Ontario this practice exists (perhaps in other provinces as well), and it seems to work over there.
As a buyer, you are free to browse, call and work with any agent you want. No strings attached.
The buyer is the one who decides whether he wants to work with one or many agents. Or none.
If you are new to the Montreal Real Estate market, keep in mind that most agents representing the buyers are bound by word. The buyer often chooses to work with them (for as long as they decide to) because they supply services needed or working ethics meets the buyer’s criteria, not just because they’re bound by a document. As opposed to the sellers, who do sign a mandatory brokerage contract in order to have their home listed on the MLS.
Make no mistake about this. If an agent tells you: “I cannot show you this property unless you sign an Exclusive Buyers Agreement”, run like hell. [Update] You are in no obligation to sign anything. But, if you do decide to sign, make sure to have the document well explained to you.
A buyer’s agent should provide you with detailed information on current listing and market activity, coordinate visits, explain legal forms, help you write an offer, negotiate the purchase price for you, while protecting your best interest.
All of these services are free, and buyer’s agreement (or brokerage contract to purchase) are optional.
Always happy to read your comments, if you have any questions or need assistance, feel free to contact me.
Get the new articles delivered to you, subscribe now!
Posted by: Deya Bautista - Affiliated Real Estate Agent working as part of the McGill Immobilier team. Specializing in condos and revenue property in the metropolitan area of Montreal. For buying or selling contact Deya at: 514.917.7889 
actually, it does exist, under the name Exclusive brokerage contract – Purchase of an immovable. Same animal, different name. :-)
http://woapp.acaiq.com/PDF/An/BrokerageContractPu...
Rich, Thank you!!
Before writing the article I searched the forms and found none. Thank you for looking out.
I've updated the article to reflect the accurate information.
Sincere apologies for the big "Ooops" to all readers.
It's a fine point but an EXCLUSIVE buyer agency agreement has a quite special meaning. It's available ONLY with a brokerage that has no listings and whose agents work solely for buyers. There are precious few of this breed in Canada. For instance, I'm the only of this kind in Ontario's Niagara Peninsula.
What agents in this country often refer to as an exclusive buyer agency agreement is simply an arrangement whereby a buyer is bound to work with one Buyer Agent employed by a brokerage and only through him/her submit any offer to a seller or listing brokerage. Most of these agents — and certainly the brokerages they work for — have listings and work for sellers as well as buyers.
A critical difference is that an EBA will take the ENTIRE market into consideration and have no loyalty to any agent or brokerage. The "ordinary" BA will tend to focus on his brokerage's listings before looking at the market any further afield.
With the soon to be rules allowing "for sale by owner to be listed on the MLS', the run like hell statement when a buyer's agent requests a buyer's contract before showing homes might have to be mellowed a triffle.