If you're in the market to buy a home, you've probably noticed that things have changed a bit. Starting August 17, 2024, there's a new requirement for homebuyers working with real estate professionals—specifically those who are REALTORS®. You might be asked to sign a written buyer agreement, and if you're wondering why or what this means for you, you're in the right place. Let’s break it down in a way that’s easy to understand.
What Exactly Is a Written Buyer Agreement?
A written buyer agreement is essentially a contract between you, the homebuyer, and your real estate professional. This agreement outlines the services your agent will provide, as well as the compensation they’ll receive for those services. It’s a way to ensure that both you and your agent are on the same page from the get-go.
Why Am I Being Asked to Sign This Agreement?
This requirement stems from a recent change initiated by the National Association of REALTORS®. As part of a proposed settlement of litigation related to broker commissions, it’s now necessary for real estate professionals to have a written agreement in place with their clients. This is a nationwide change that took effect on August 17, 2024.
Are These Agreements a New Thing?
Depending on where you live, you might have never encountered a written buyer agreement before. Some states have had this requirement for years, while others haven’t. So, if this is new to you, don’t worry—many homebuyers are in the same boat. But now, it’s a standard practice across the country for many real estate professionals.
Can I Negotiate the Terms of the Agreement?
Absolutely! The terms of your written buyer agreement are not set in stone. You have the right to negotiate aspects such as the services you expect, the duration of the agreement, and the compensation involved. The key is that whatever you agree on with your agent should be clearly stated in the agreement—no vague terms, no ranges, just a clear understanding of what’s been decided.
How Does This Benefit Me as a Homebuyer?
One of the biggest advantages of having a written buyer agreement is that it removes any guesswork. You’ll know exactly what your agent is going to do for you and how they will be compensated. This clarity helps avoid misunderstandings and ensures that both you and your agent have a solid understanding of your working relationship.
When Will I Be Asked to Sign This Agreement?
You’ll need to sign a written buyer agreement before you start touring homes with your real estate professional. This applies whether you’re doing an in-person visit or a virtual tour. However, if you’re just attending an open house on your own or having an initial chat with an agent about their services, you won’t need to sign anything yet.
Do I Have to Pay My Agent Out of Pocket?
Not necessarily. While the agreement will outline how your agent will be paid, it doesn’t mean you have to cover the cost directly out of pocket. In many cases, it’s possible to negotiate for the seller or their agent to cover your agent’s compensation. This is something you can discuss with your real estate professional to find the best arrangement for you.
Does This Agreement Define the Type of Relationship I Must Have with My Agent?
No, it doesn’t. You’re free to establish any business relationship with your real estate professional that is allowed under state law. Whether you want a more casual arrangement or a full-service partnership, the agreement can be tailored to fit your needs.
Can I Change or Get Out of the Agreement?
Yes, you can. If circumstances change or you’re not satisfied with the arrangement, you and your real estate professional can agree to modify the agreement. Just be sure to read the terms carefully so you understand the conditions under which the agreement can be changed or exited.