Buyer Representation and Buyer Broker Agreements

Recent changes adopted by the National Association of Realtors require that buyers enter into a written Buyer Broker Agreement before a broker can show homes. This applies to in person and virtual showings of residential property.

A Buyer Broker Agreement:

• Confirms who the broker represents
• Explains the scope of services provided
• Discloses how compensation is handled
• Authorizes the broker to show homes and provide advice

When a Buyer Broker Agreement Is Required

A signed Buyer Broker Agreement is required:

• Only before showing homes
• Not required for general conversations
• Not required for initial consultations
• Not required to answer market questions

It becomes required when a buyer wants to tour a home with a broker.

Different property types and situations may be handled differently. If an agreement is required for a specific showing, it will be discussed and explained in advance.

What the Agreement Covers

The agreement:

• Establishes buyer representation during showings
• May extend to negotiations if agreed
• Defines the geographic area and property type
• Sets the duration of the relationship
• Explains how compensation works

The agreement does not obligate a buyer to purchase a property. It allows the broker to legally provide professional services.

How Buyer Broker Compensation Works

Buyer broker compensation:

• Is negotiable
• Is disclosed in writing
• Is discussed before any homes are shown

If the seller or listing broker offers compensation, that amount is applied toward the agreed fee. If no compensation or partial compensation is offered, the Buyer Broker Agreement explains how any difference is handled.