Are you thinking about touring homes soon? If so, there's an important step you’ll need to take before viewing homes with a real estate agent—signing an exclusive buyer agreement. As of August 17, 2024, this agreement is now a requirement when working with a real estate professional who is a REALTOR®. Here’s everything you need to know to feel confident about this change.
What Is an Exclusive Buyer Agreement?
An exclusive buyer agreement is a formal contract between you and your real estate agent, outlining the services they will provide and how they will be compensated for those services. By signing this agreement, you’re ensuring that your agent will represent your best interests throughout the home-buying process, while making the terms of your relationship clear from the outset.
Why Is This Agreement Required Now?
This requirement is part of a nationwide shift related to broker commissions, designed to bring more transparency to real estate transactions. The National Association of REALTORS® (NAR) introduced this change as part of a settlement, effective August 17, 2024, to help reduce confusion and ensure buyers fully understand their agent's role and compensation.
What Can You Negotiate?
The exclusive buyer agreement is flexible and can be tailored to your specific needs. The agreement should reflects what you and your agent have discussed. Items of note to negotiate include:
Services: What you expect your agent to do for you during your home search.
Length of the Agreement: You can adjust the duration of the agreement to fit your needs.
Compensation: Whether a flat fee, percentage, or other structure, compensation should be clearly outlined.
How Buyer Agent Compensation Works
One of the most common questions buyers have is whether they need to pay their agent out-of-pocket. The answer is: not necessarily. While the agreement specifies how your agent will be compensated, it’s very possible to negotiate for the seller to cover your agent fees. This varies by listing, so it's important to discuss this with your agent upfront and when writing an offer.
Can You Change or Exit an Agreement?
Yes, buyer agreements are not set in stone. You can request changes to the terms or, if needed, mutually agree to exit the agreement. Always review the conditions for modification or termination of the contract to ensure you understand your options.
What Now?
Before touring homes, review the exclusive buyer agreement carefully with your agent. Be sure that you are comfortable with the terms and that all your expectations are clearly laid out. Once signed, your agent will work on your behalf to find the right property and represent your interests at every step.
