Explanation of The Broker Representation and Broker Compensation Agreement (BRBC) and The Buyer Financial and Personal Information (BFPI)

Broker Representation and Broker Compensation Agreement (BRBC)

• Purpose: This agreement formalizes the relationship between a buyer and their real estate agent. It outlines the agent’s obligations, specifies services provided, and details the compensation structure.

• Why It’s Needed: It ensures clarity and transparency for both parties. Buyers understand what to expect from their agent, and agents confirm their right to compensation for their services.

• Legal Requirement: As of August, 2024, the BRBC is required by law.

• Representation Period: Not to exceed 3 months and is extendable.

• Exclusive and Non-Exclusive Agreements:

An exclusive agreement ensures you work with only one dedicated agent who provides personalized services tailored to your needs. This arrangement simplifies communication and negotiations by offering a single point of contact, thereby reducing confusion. Additionally, your exclusive agreement offers commission clarity, helping you avoid potential double commission payments since your agent manages all your transactions and offers.

A Non-Exclusive Agreement allows you the flexibility to work with multiple agents simultaneously and you are not tied to just one. It is important to know that if an agent shows you a home and you make an offer through another agent, you may be obligated to compensate both the showing agent, and the agent who submitted the accepted offer.

• Asking an Agent to Show You Homes: It is an ethical violation for any broker/agent to show you homes without an Exclusive or a Non-Exclusive agreement signed by both the broker/agent and the person asking to see a home.

• Buyers Obligation to Pay Broker Compensation: This section outlines how much your broker/agent (the MLS Participant) will be paid and how that amount is determined. Your broker/agent cannot receive more money than you have agreed upon, and the amount cannot exceed 3%. In your offer to purchase a home, you will have the option of requesting the seller to contribute to this compensation.

• Negotiability: You have the flexibility to discuss a rate of commission that works for you.

Buyer Financial and Personal Information (BFPI)

• Purpose: This document gathers essential financial and personal details from the buyer, such as credit information, employment status, and financial capacity.

• Why It’s Needed: It helps agents better understand the buyer’s financial situation and needs, ensuring they can provide tailored advice and find suitable property options. This information is also crucial for securing pre-approvals and making informed negotiations.

• Mandatory Submission: Under the BRBC, the buyer must provide their personal and financial information using the Buyer Financial and Personal Information form (C.A.R. Form BFPI). The default timeline for submission is within 5 days from signing the BRBC. Providing the BFPI is not optional; it is a requirement for all buyers without exception.