What defines a buyer agency agreement?

A buyer agency agreement is a legal contract that explicitly establishes a fiduciary relationship between a broker and a buyer. In this context, the broker is designated to represent the best interests of the buyer in real estate transactions. This means that the broker is obligated to advocate for the buyer’s interests, which could include negotiating terms and conditions that favor the buyer, providing market insights, and ensuring that the buyer's needs and preferences are prioritized throughout the purchasing process.

Understanding the nature of this agreement highlights its importance in real estate transactions. It sets the groundwork for the responsibilities and expectations of the broker as they work on behalf of the buyer. This relationship differs vastly from seller agency agreements, where the broker would instead represent the interests of the property seller.

The other options do not accurately describe the core function of a buyer agency agreement. Mandating obligations for sellers pertains to seller agency agreements or other related fiduciary obligations. While transaction fees might be discussed in a buyer agency agreement, it's not the defining characteristic of such an agreement. Similarly, real estate tax exemptions are unrelated to the buyer agency relationship and its establishment. Thus, the correct understanding hinges on the broker's role as the buyer's agent, which is the essence of a buyer agency agreement.