What's a buyer agreement?
Written by Omkar Pathak on 08/17/2024
A home buyers POV:
You're on an adventure filled with open houses, endless scrolling on Zillow, and the occasional existential crisis about whether you really need that extra bathroom. But before you envision your Pinterest boards in your kitchen, there’s something as exciting as watching paint dry: the buyers agreement. House hunting often comes with daunting documents but this one’s not just a blind-sign, it’s your DTR (Define The Relationship) with your real estate agent. It’s like the seatbelt in your car- essential for keeping you safe while you navigate the twists and turns of the housing market.
A buyer agreement, also known as a buyer's agency agreement or buyer-broker agreement, is a negotiable legal contract between a home buyer and a real estate agent that establishes their working relationship. It outlines the terms of their cooperation in finding and purchasing a property. Beginning August 17, 2024, agents “working with” a buyer will be required to enter into a written agreement with the buyer prior to touring a home, including both in-person and live virtual tours.
Written buyer agreements benefit consumers because they clearly and transparently outline the services an MLS Participant will provide and how they will be compensated.
- National Association of Realtor's (NAR)
Important information in your buyer agreement
- Type of relation disclosing fiduciary duties, parties of interest and/or exclusive relations (e.g., agency, non-agency, subagency, transactional, customer)
- Term of agreement (e.g., one day, one month, one house, one zipcode)
- Services to be provided (e.g., ministerial acts, a certain number of showings, negotiations, presenting offers)
- Compensation charged (e.g., $0, X flat fee, X percent, X hourly rate). Buyer agents are required by law to disclose all other concessions/compensations they may receive on the property. Make sure to discuss and negotiate these charges with your agent
- Bunch of legal disclaimers
- Termination clauses/ conditions
- Conflict of interests
Broker's compensation and fees for services are not set by law and are fully negotiable per NAR.
A broker's compensation for services rendered to a buyer is solely a matter of negotiation between the broker and their client, and is not fixed, controlled, recommended, or maintained by any persons not a party to the brokerage service agreement.
Whether you're a first-time buyer or a seasoned pro, having a solid buyer agreement in place ensures that you have a dedicated agent in your corner, fighting for your best interests.