A buyer agency agreement is a written contract between a homebuyer and a real estate brokerage. Since August 17, 2024, National Association of REALTORS® policy has generally required an MLS Participant working with a buyer to have a written agreement before touring a home with that buyer. The agreement commonly covers four core points: services, compensation, term and exclusivity.
The agreement may also be called a buyer-broker agreement, buyer representation agreement or buyer agency contract. It is between the buyer and the brokerage, even though the buyer usually works directly with an individual real estate agent.
A buyer agency agreement is different from a purchase agreement. A purchase agreement is the contract between the buyer and seller that sets the terms of the property sale.
Buyer Agency Agreement at a Glance
| Item | What it covers |
|---|---|
| Parties | The buyer and the real estate brokerage |
| Agent's role | Representation, transaction brokerage or another relationship allowed by state law |
| Services | Property searches, showings, offer preparation, negotiation and transaction coordination |
| Compensation | A percentage, flat fee, hourly fee or another clearly defined amount |
| Term | The start date and expiration date |
| Exclusivity | Whether the buyer may work with other agents |
| Termination | How either party can end or change the agreement |
| Protection period | Whether compensation may still be due if the buyer purchases a property after the agreement ends |
Why Do Buyers Sign an Agreement Before Touring a Home?
Since August 17, 2024, NAR policy has required MLS Participants who work with buyers to enter into a written agreement before conducting an in-person or live virtual tour. This is an industry policy, not a federal law that applies identically to every real estate professional. State law and an agent's professional affiliation may create different requirements.
A buyer generally does not need a buyer agency agreement simply to:
- Ask an agent about their services
- Speak with an agent at an open house
- Attend an open house without the agent representing the buyer
- Visit a property independently
The situation may change when an agent starts identifying properties, arranging private showings or providing other buyer-side services.
State rules can be stricter. California, for example, requires a buyer-broker representation agreement no later than the execution of the buyer's purchase offer. Other states or professional policies may require an agreement before a showing.
What Does a Buyer Agency Agreement Include?
1. The Agent's Services
The agreement should describe what the real estate professional will do for the buyer. Services may include:
- Searching for suitable properties
- Arranging and attending private showings
- Providing market information
- Explaining disclosures and transaction documents
- Preparing or presenting offers
- Negotiating price, contingencies and other terms
- Coordinating inspections, appraisal and closing
- Communicating with the listing agent, lender, title company and other parties
Some agreements cover the entire buying process. Others provide limited services, such as showing properties only.
2. Compensation
The agreement should state the agent's compensation in clear terms. Depending on the agreement and state law, compensation may be:
- A percentage of the purchase price
- A flat fee
- An hourly rate
- A combination of fees
- Zero compensation under a specific arrangement
Compensation is negotiable and is not automatically set by law. NAR guidance says the amount or rate should be specific rather than open-ended or expressed only as a range.
The buyer may be responsible for paying the agreed compensation. The buyer can also ask the seller to contribute through a seller concession or another negotiated arrangement. The seller may accept, reject or negotiate that request.
For example, suppose the agreement states that the brokerage will receive 2% of the purchase price and the seller contributes 1.5%. The buyer may owe the remaining 0.5% unless the agreement says otherwise or the parties change it.
3. The Agreement's Length
The contract should identify its start date and expiration date. Buyers may be able to negotiate:
- A short trial period
- A single-property or limited-service agreement
- A nonexclusive agreement
- A longer agreement with a clear cancellation provision
The available options depend on state law and the brokerage's policies.
4. Exclusivity
An exclusive buyer agency agreement generally means the buyer agrees to work with one brokerage during the stated term. If the buyer purchases a property during that period, the agreement may require compensation even if the buyer found the property independently or another agent participated.
A nonexclusive agreement may allow the buyer to work with more than one agent. It may also provide fewer services or impose other limits. The terminology and legal effect of exclusive and nonexclusive agreements vary by state and contract form.
5. Termination and Protection Periods
The agreement should explain how the buyer or brokerage can end the relationship. It may require:
- Written notice
- Mutual consent
- Payment of a cancellation fee
- Broker approval
- Compliance with a specific termination procedure
Some agreements contain a protection period, also called a carryover period. Under this clause, compensation may remain payable if the buyer purchases a property introduced by the agent within a specified period after termination. NAR identifies carryover provisions as a term buyers should review.
Is the Buyer Required to Pay the Real Estate Agent?
Sometimes. A buyer can owe compensation under the buyer agency agreement.
A seller or listing broker may offer to contribute to the buyer agent's compensation, but that contribution is not guaranteed. The buyer agreement determines the buyer's obligation to the brokerage.
Before signing, ask:
- What is the total compensation?
- Who is expected to pay it?
- What happens if the seller contributes less than the agreed amount?
- Is the fee due if the buyer finds a property without the agent?
- Is the fee due if the buyer cancels the purchase?
- Does the fee apply to rentals, new construction or properties outside the MLS?
Do not rely on verbal promises about compensation. The agreed terms should appear in the written agreement.
What Should You Check Before Signing?
Services
Confirm that the agreement matches the level of help you expect. If you want full-service representation, check whether the agent will assist with offers, negotiations, inspections and closing.
Compensation
Look for a definite amount, percentage or formula. Confirm whether you could owe additional money if the seller does not contribute toward the agent's compensation.
Term and Cancellation
Check the expiration date and the process for ending the agreement. Do not sign a term you do not understand or cannot reasonably exit.
Exclusivity
Determine whether you are agreeing to use only that brokerage. If you are interviewing several agents, ask whether a nonexclusive or shorter agreement is available.
Protection Period
Find out whether the brokerage can claim compensation after the agreement ends and which properties would be covered.
Conflicts and Dual Agency
Ask whether the agent or brokerage could represent both the buyer and seller in the same transaction. State laws differ, and dual agency or similar arrangements generally require specific disclosure and consent.
Can a Buyer Negotiate a Buyer Agency Agreement?
Yes. Buyers can negotiate the services, compensation, term, exclusivity and termination provisions, subject to state law and the brokerage's policies. NAR describes written buyer agreements as negotiable and advises buyers to sign only agreements whose terms they understand and accept.
A buyer can ask for a shorter agreement, a defined service package, a nonexclusive arrangement or a clear cancellation process. An agent does not have to accept those changes, so the buyer may need to compare other agents or brokerages.
Bottom Line
Read a buyer agency agreement as a payment and relationship document, not a formality. You should be able to identify the services, total compensation, expiration date, cancellation process, exclusivity terms and protection period before signing.
Real estate agency rules vary by state. Consult a local real estate attorney if a provision is unclear or could create a substantial financial obligation.