Consumer Guide to Written Buyer Agreements: What You Need to Know

Credit to NAR for the Original Article - Original Article: Click Here

August 29th, 2024

When you're in the market for a new home, working with a real estate professional who is a REALTOR® ensures you're partnering with someone committed to your best interests. Starting August 17, 2024, it's mandatory for REALTORS® to have a written buyer agreement with their clients. Here’s everything you need to know about these agreements and why they're important for your home-buying journey.

What is a Written Buyer Agreement?

A written buyer agreement is a formal document that outlines the services your REALTOR® will provide and specifies the compensation for those services. This agreement is designed to clarify expectations between you and your real estate professional.

Why Am I Being Asked to Sign This Agreement?

The requirement for a written buyer agreement became a national standard on August 17, 2024, as part of the National Association of REALTORS®' efforts to increase transparency in real estate transactions. This agreement ensures that both parties are clear about their roles and responsibilities, helping to prevent misunderstandings.

Are These Agreements New?

In some states, written buyer agreements have been a standard practice for years. However, in other areas, this may be a new requirement. Regardless of where you live, this agreement is now necessary when working with a REALTOR®.

Are These Agreements Negotiable?

Absolutely. You have the right to negotiate various aspects of the agreement, including the services provided, the duration of the agreement, and the compensation. The compensation must be clearly defined—whether it’s a flat fee, a percentage, or an hourly rate—so there’s no ambiguity.

How Do These Agreements Benefit Me?

These agreements make it clear what services you can expect from your REALTOR® and how much those services will cost. By having everything in writing, you can avoid confusion and ensure that both you and your REALTOR® are on the same page from the start.

When Do I Need to Sign This Agreement?

You’ll need to sign a written buyer agreement before you begin touring homes with your REALTOR®, whether those tours are in-person or virtual. However, if you're just attending an open house on your own or inquiring about services, you won’t need to sign an agreement at that time.

Does This Mean I Have to Pay My REALTOR® Directly?

Not necessarily. While the agreement outlines the compensation for your REALTOR®, you can still negotiate for the seller or their agent to cover these costs. It’s important to discuss these details with your REALTOR® so you understand your financial obligations.

Do These Agreements Dictate the Type of Relationship I Have with My REALTOR®?

No, the agreement doesn’t limit the type of relationship you can have with your REALTOR®. You’re free to establish any business relationship that is permitted by the laws of your state.

Can I Change or Exit the Agreement?

Yes, you can. If circumstances change or if you’re not satisfied with the terms, you and your REALTOR® can mutually agree to modify or terminate the agreement. Be sure to review the terms carefully and discuss any concerns with your REALTOR®.

For more detailed information, visit NAR’s official website or consult your real estate professional to understand how state laws may apply to you. This guide aims to make your home-buying process smoother and more transparent, ensuring you have the confidence and clarity needed to make informed decisions.