What’s a buyer agency agreement, and what does it include?

Real estate agents are valuable guides who walk you through every step of the home buying process, from touring properties to signing on the dotted line. Still, when they request a buyer agency agreement, it’s normal to worry about entering a legally bound partnership. While these documents can be intimidating, they protect buyer interests, outline the responsibilities of both parties, and clarify agent compensation. 

Understanding buyer agreements helps you review the fine print and secure a beneficial relationship confidently. Discover what these contracts entail, why they’re important for a successful real estate deal, and how to get out of the agreement gracefully.

What’s a buyer agency agreement?

In real estate, buyer agency agreements are written contracts that define the services your realtor will provide throughout the home-buying process. Also called a buyer representation agreement or buyer-broker agreement, these documents establish key details like contract duration, payment structure, and exit terms for either party.

These contracts describe both sides’ responsibilities and the partnership’s scope. This tells homebuyers what they can request from their agent, what the agent expects out of them, and whether the relationship is exclusive.

What are the key components of a buyer agency agreement?

Most buyer agency agreements have these core elements in common:

— Scope of services: This includes realtor tasks like showing you homes, scheduling tours, and negotiating a price.

— Buyer responsibilities: This lists duties like clearly communicating your preferences and expectations, providing information about your finances, and getting a pre-approval letter.

— Contract type: This specifies whether your agreement is non-exclusive, exclusive, or dual agency. If your arrangement is non-exclusive, this element also establishes if it’s right-to-represent or not-for-compensation. 

— Duration: This states the length of the partnership. Durations range from a few weeks to a year, depending on your situation. 

— Termination clause: This defines the steps for ending the contract, like providing a minimum amount of notice or paying penalties.

— Payment terms: These show how and when the agent gets paid, including the percentage and source of the commission.

Types of real estate buyer agency agreements

Here are the most common types of buyer agency agreements.

Exclusive buyer agency agreements

This is the most common situation for homebuyers. It gives one agent the right to represent you in real estate deals for the contract’s duration. At the same time, the agreement stipulates that the agent can’t represent the seller, either. This provides peace of mind that your realtor won’t face conflict of interest.

Non-exclusive buyer agency agreements

There are two main types of non-exclusive arrangements: right-to-represent and not-for-compensation. Both contracts are flexible and let you work with an agent while retaining the right to contract with or switch to other realtors at any time. 

Here’s how they differ: 

— Right-to-represent agreements require the buyer to pay the specific agent who finds the final home, regardless of how many they’ve partnered with. 

— Not-for-compensation agreements don’t require buyer payment at all. But this doesn’t necessarily mean the realtor receives no commission, as the seller can still handle agent fees to make their property more appealing and encourage a faster deal. These contracts are often used as favors for friends and family, making them less common.

Dual-agency agreements

In a dual-agency arrangement, a real estate agent represents both the buyer and seller for the same deal. This agreement is less common because it can create a conflict of interest. When an agent is buying and selling the same home, they can’t fully advocate for either side of the transaction, since the buyer wants to pay as little as possible and the seller wants to get the most they can.

Further, the realtor receives the full commission rather than splitting it with another agent from a separate brokerage. This can incentivize closing the deal quickly rather than negotiating the best terms for both parties. Unless you have significant experience in real estate already and fully understand the risks of dual representation, one of the other contract options is likely the safest bet.

Benefits of a buyer agency agreement

Creating a legal agreement with a real estate agent has advantages for both parties, including:

— Protecting your interests: These contracts specify that your agent is legally obligated to act in your best interest, fostering trust and loyalty. Keep in mind that non-exclusive agreements may not provide the same protection as exclusive arrangements, so it’s best to read the fine print.

— Keeping everyone aligned: A clear outline of provided services and responsibilities keeps both parties on the same page. This helps you understand the agent’s role, and also clarifies your buyer duties, like providing financial details and communicating home feedback so you can move through the process smoothly.

— Specifying payment terms: Setting clear payment terms from the outset prevents confusion and disputes with your realtor. It establishes transparency and builds trust, as you know exactly when and if you’ll be paying your agent when the time comes.

Do I have to sign a buyer agent agreement to tour a home?

No, you don’t need to sign anything to tour a home by yourself. However, most agents are members of the National Association of Realtors (NAR), an organization that requires buyer agency agreements for activities like touring homes and suggesting properties. 

These contracts were optional until August 17, 2024, when NAR announced that realtors and clients must have a written agreement in place before touring homes. This means that real estate agents require a contract to work with you, but you don’t need an agreement if you’re hunting alone.

That being said, working without an agent can be difficult. These professionals can help you understand the market, negotiate better prices, and navigate complex paperwork. Don’t let buyer agency agreements get in the way of a smoother home buying journey. 

While you will require a contract, it doesn't have to be exclusive or involve compensation. A short-term, non-exclusive contract lets you get started without signing yourself into a serious commitment. If possible, securing a not-for-compensation arrangement offers even more flexibility.

If you’re looking for a quick, transparent way to find the right agent, Better makes it easy. Better Real Estate can match you with a professional who can guide you through each step, handle negotiations, and advise you on tough decisions. Our agents provide clear terms so you can establish expectations and move through the process 12 days faster than the industry average.

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Are the terms of a buyer agency agreement negotiable?

Yes, everything in a buyer agency agreement is fully negotiable, from the length of the contract to how much the agent gets compensated. The best real estate agents work closely with buyers and personalize the arrangement to their specific situation.

How can you get out of a buyer-broker agreement?

If you’re ready to move on and need to leave the agreement, check the contract. It will define exactly how to terminate the arrangement early. Whether it’s a mutual agreement or a breach of contract, this process may include submitting written notice and satisfying outlined obligations and cancellation fees.

Take the first step to homeownership with Better

A well-defined buyer agency agreement keeps you and your real estate agent on the same page and makes the home buying journey as seamless as possible. Work together, negotiate favorable terms, and understand your exit options to keep this arrangement flexible and beneficial.

Better partners with top agents nationwide who don’t work on commission, which means they focus on finding your dream home for a great price. We consider where you want to live and what your ideal timeline is to match you with a professional who fits. Plus, if you work with one of our agents and finance the purchase with a Better mortgage, you can save $2,000 on closing costs.

Get pre-approved in as little as three minutes, and take the first step toward homeownership with Better.

...in as little as 3 minutes – no credit impact

FAQ

Can I buy a home without an agent?

Yes, you can buy a house without a real estate agent. This might make sense if you have experience buying properties or the seller is a close friend or family member. In most cases, however, working with an experienced realtor can save you time, money, and stress.

Do I still owe my agent if they don’t close the deal?

Agents generally only get a commission when they finalize a deal, but it’s always important to review your contract just in case.

Is a buyer agency agreement required?

Yes, but only if you choose to work with a certified realtor. NAR mandated buyer agency agreements for agents to make commission structures more transparent. However, if you’re house hunting alone or working with a non-NAR real estate agent, you don’t need an agency contract.

What’s an exclusive buyer representation agreement?

An exclusive buyer representation agreement is a contract between a real estate agent and a homebuyer that restricts clients from working with multiple agents. It also ensures agents protect the buyer’s best interests and don’t work with the seller.