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Understanding the New Buyer Agreement Requirement: What Homebuyers Need to Know
As a homebuyer, navigating the real estate process can feel overwhelming. You want to ensure you’re receiving the best guidance from a trusted professional while also understanding the financial aspects of your purchase. A major change has come to the real estate industry that will impact buyers and their relationships with real estate professionals.
The New Requirement: Signing a Written Buyer Agreement
Effective August 17, 2024, homebuyers working with a REALTOR® are required to sign a written buyer agreement. This nationwide change is designed to increase transparency and provide clarity between buyers and their real estate professionals.
What is a Written Buyer Agreement?
A written buyer agreement is a contract that outlines the services your REALTOR® will provide and the compensation they will receive. This agreement ensures a mutual understanding between both parties and establishes expectations upfront.
Why is This Agreement Required?
This change stems from the National Association of REALTORS®’ (NAR) proposed settlement regarding broker commissions. While some states have already implemented this practice, it will now become a standard requirement nationwide.
Are Buyer Agreements Negotiable?
Yes! The terms of a buyer agreement are fully negotiable, including the services provided, duration of the contract, and compensation. Compensation structures vary and can be set as a flat fee, a percentage, an hourly rate, or even $0, depending on the agreement between you and your REALTOR®.
The Truth About Buyer Agent Compensation
Buyer agents have always been compensated, but traditionally, their commission was factored into the price of the home. Sellers would agree to offer a commission to the buyer’s agent as part of the listing agreement, and that cost was essentially included in the home’s selling price.
With the new requirement, commissions will be handled more transparently. This means that rather than automatically being included in the home price, buyer agent commissions will now be openly negotiated. Buyers can still negotiate for the seller to cover these costs as part of the overall purchase price.
What Are the Benefits of a Buyer Agreement?
- Clarity & Transparency: Clearly defines the services provided and how compensation will be handled.
- Stronger Buyer Representation: Ensures your REALTOR® is fully committed to representing your best interests.
- Avoids Misunderstandings: Establishes expectations upfront, creating a smoother home-buying process.
When Do You Need to Sign an Agreement?
If you’re working with a REALTOR® to tour homes—either in person or virtually—you will need to sign a buyer agreement before viewing properties. However, if you’re only attending an open house or inquiring about an agent’s services, you are not required to sign one at that stage.
Do Buyers Have to Pay Their REALTOR® Out of Pocket?
Not necessarily. While the agreement defines compensation, buyers can negotiate for the seller to cover the cost as part of the overall transaction.
Can the Agreement Be Modified or Canceled?
Yes! Buyer agreements can be adjusted if both parties agree. Most agreements also include terms for cancellation, so it’s important to review those details before signing.
Final Thoughts
While this new requirement may seem like a big change, it ultimately benefits buyers by promoting transparency and ensuring they receive the best possible representation.
As a dedicated real estate professional specializing in Parkland and the surrounding areas, I am committed to helping you navigate this process with confidence and clarity. Whether you’re a first-time homebuyer or a seasoned investor, I am here to ensure a seamless experience tailored to your needs.
If you have any questions or are ready to start your home search, let’s connect! Reach out to me today and let’s make your real estate goals a reality.
Written By: Maria Alejandra Rodriguez
Coldwell Banker | REALTOR®
