If you're a homebuyer working with a real estate agent, it means you're working with a professional who has an ethical obligation to act in your best interest. Beginning August 17, 2024, you'll be required to sign a written buyer representation agreement after you've chosen the professional you want to work with. Here's what you need to know about these agreements.
What is a โBuyerโs Written Representation Agreementโ? What does it do?
Written buyer agency agreements are an agreement between you and your real estate professional that outlines the services your real estate professional will provide to you and what you will be paid for their services.
Why am I being asked to sign an agreement?
Written representation agreements between buyers and agents became a nationwide requirement for many real estate professionals as part of the National Association of Realtors' proposal to resolve disputes over broker commissions. The requirement went into effect on August 17, 2024.
NOTE: In North Carolina, real estate agents are required to have written buyer representation agreements before an offer is drafted. What is changing in North Carolina is that written buyer representation agreements must now be drafted before the buyer views a property, in person or virtually.
Are these agreements new?
In some places, yes. Many states (like North Carolina) have required them for years, while others don't. As a result, it's entirely possible that you or others you know haven't used them in the recent past. Regardless, they're now a nationwide requirement for many real estate professionals.
Are these agreements negotiable?
Yes! You should feel empowered to negotiate any aspect of the agreement with your real estate professional, such as the services you want to receive, the length of the agreement, and compensation. Compensation between you and your real estate professional is negotiable and is not set by law. In the written agreement, compensation should be clearly defined (for example, a flat fee, a percentage, or an hourly rate). The rate should not be a range. Only sign an agreement that reflects what you and your real estate professional have agreed upon.
How do I benefit from these agreements?
These agreements clearly state what services you (as a home buyer) expect your real estate professional to provide and how much you will be paid. These agreements clarify things and reduce any potential confusion at the beginning of your relationship with your real estate professional.
When do I need to sign an agreement?
You will be required to sign a written buyer representation agreement with your real estate professional before you visit a home with them, either in person or virtually. If you simply visit an open house on your own or ask a real estate professional about their services, you do not need to sign a written buyer's agreement.
Does this mean I have to pay my real estate professional out of pocket?
Not necessarily. While you are responsible for paying your real estate professional as stipulated in your contract, you can still request, negotiate, and receive compensation for your real estate professional from the seller or their agent.
Do the agreements dictate a specific type of relationship I need to have with my real estate professional?
No. You are permitted to enter into any type of business relationship with your real estate professional as permitted by the law of the state in which you are purchasing a home.
Can I change or exit an agreement?
Yes. You and your real estate professional can mutually agree to change your agreement. Agreements may have specific conditions under which they can be terminated, so read the wording of the agreement and speak to your real estate professional if you wish to change or terminate your agreement.
To learn how Real Estate Experts works with buyers, read our new Buyer's Guide.
