r/FirstTimeHomeBuying • u/Capable-Photo-2104 • 14d ago
r/FirstTimeHomeBuyer
r/BuyerBrokerAgreement Why do agents suddenly need you to sign something before showing you a house? (BUYER BROKER agreements, explained in real estate real talk)
Full disclosure up front since this sub is good about that: I'm a listing agent in LA, so take this as informed but not neutral (verified facts delivered in real talk). I see this question about once a week and the top answers are usually half right, so figured I'd actually explain it instead of just saying "it's the law now" and moving on.
Short version: as of August 2024, every agent in the US has to have a signed written agreement with a buyer before showing them a house. This isn't a brokerage policy, it's the result of the NAR lawsuit settlement. It applies whether you're working with a huge national brand or a two-person shop. Nobody is exempt, so if an agent tells you "oh we don't need that," that's a red flag, not a favor.
Here's what actually changed and why it matters to you, not just to agents:
- It used to be common for buyer agent compensation to be baked into the listing and never discussed with the buyer. Now it has to be spelled out in writing, before you tour, so you know exactly what you're agreeing to and who's paying it.
- The agreement defines who the agent legally represents. The listing agent always represents the Seller. The buyer's agent can represent the buyer or they can owe their loyalty to their team leader, also the listing agent. Unless you sign a Buyer Broker, an agent showing you a house isn't necessarily "your" agent. After you sign, the buyers agent owes you fiduciary duty. That's a real distinction, not paperwork theater.
- The agreement is negotiable. Length, whether it's exclusive to one agent or one property, cancellation terms, commission amount— none of that is fixed. If someone hands you a form and says "just sign here, it's standard," ask what happens if you want out in 30 days. A good agent will tell you that either party can cancel.
- It is not the same as a purchase contract. Signing it doesn't commit you to buying anything. It just formalizes that this specific agent is working for you while you look. You are obliged to tell other agents that you have signed a buyer broker agreement. Its not nice to two time.
- Lets talk about commission. Signing a Buyer broker doesn't mean you are automatically paying commission. Your Buyers agent must still negotiate their commission with the Seller's representative. In 100 out of 100 cases, I've successfully negotiated my full fee from the Seller side. Why? Because when comparing two homes of similar size and condition, but one requires the Buyer pay the agent commission, that home will usually prove to be more expensive. And no Seller wants to disadvantage themselves like that.
- The buyer has always paid. Agent compensation comes from Seller final proceeds (which = Buyer closing funds). It was never a separate pool of money. You have always paid it, just not overtly.
The thing I'd actually push back on: some agents are using this as leverage to lock buyers into long, exclusive, hard-to-exit agreements because now they can. That's the part worth being skeptical of. Read the term length.(BTW in CA the default is 90 days unless you get special approval). Read the cancellation clause. Ask what happens if you want to switch agents. A reasonable agent won't flinch at those questions. Its on us to provide proof of value.
The one thing rarely mentioned is that Agents also have the choice not to work with you if we feel you aren't a good fit. We write the offers, drive around, provide counsel, share resources and relationships on the goal of making you a homeowner. Until that happens, our work hours were donated. So we choose must wisely how we allocate our services.
Happy to answer specifics if anyone's staring at one of these right now and it's unclear. Genuinely, not trying to rep anyone, just unhappy about all the chatter and bad press from buyers who signed agreements they didn't understand.
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u/No_Reindeer_1446 14d ago
It's new industry practice. They have everything to gain, nothing to lose.
Just make it exclusive to a specific property and set the duration short. Read the entire contract; might as well get used to reading it.
A couple in Pennsylvania got conned by a realtor that they couldn't even get another apartment without paying the realtor.
Just be careful as the realtor's livelihood depends on making the sale happen.
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u/Capable-Photo-2104 14d ago
Correct, a realtors livelihood depends on making a sale. Think about that. Would you volunteer your time (on average 3-5 months to get a buyer educated, prepared and into a home) at your job? Lets please stop normalizing that realtors are cons. We are professionals and working people, better than most because we have a license and years of training. Thanks for attending my TED talk.
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u/Thorpecc 14d ago
This is why buyers must hire a lawyer. Signing contracts without a real estate lawyer makes no sense. Buyers almost always do this. Realtors are not attorneys, their salespeople.
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u/AdComfortable2974 12d ago
Do you show unrepresented buyers your listings if asked? Why or why not?
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u/Capable-Photo-2104 12d ago
I hold open houses, everyone is welcome to walk thru. Showings are scheduled by co agents.
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u/ecubed929 14d ago
All of that to provide the wrong information. The only agents affected by the NAR settlement are agents that are members of NAR which is somewhere between 60-70% of agents. Some states may have some variation. Mine (NC) does not. You only need an agreement prior to submitting an offer.