The agency agreement is an important document that clients sign with their buyer's agent at the commencement of the buying process.
An agency agreement is generally a standard form from the Real Estate Institute, or individual buyer's agents may devise their own. Fair Trading lists the types of inclusions that should be found in any buyer's agent agreement. If the buyer's agent has devised their own agency agreement, you'll want to be sure that it only contains standard terms and conditions, and that you have the rights and protections that you are entitled to.
Sometimes people ask me why it is so important to have an agency agreement signed. Like any agreement, it protects the consumer of the service - so that they know what they can expect, how much the service will cost, and what avenues they may pursue if they are not happy - and it protects the provider of the service from accusations that they did not disclose certain matters; were not up-front about fees; or that they do not have the authority to act on behalf of their client.
All licensed agents are required to act in good faith and with reasonable care, and promote your best interests. Confidentiality must be maintained throughout the process and beyond.
So, although it may seem burdensome, an agency agreement is actually a smart way for clients and agents to do business. An agency agreement has many built-in clauses that protect the client, ensure that fees are adequately described, accurately sets out the services expected of the agent, the type, location and budget for the new home or investment, and sets out the term of the agreement. With a signed agency agreement in place, the agent has the authority to search, inspect, negotiate and exchange properties on your behalf.