Understanding Written Buyer Agreements: What Every Homebuyer Needs to Know

If you’re planning to buy a home, chances are you’ll be asked to sign a written buyer agreement when working with a REALTOR®. This nationwide requirement, effective August 17, 2024, ensures transparency and professionalism in the home-buying process. But what exactly is a written buyer agreement, and what does it mean for you? Let’s break it down.

What Is a Written Buyer Agreement?

A written buyer agreement is a formal contract between you and your real estate professional. It outlines:

• The services your REALTOR® will provide.
• The agreed-upon compensation for those services.

This agreement sets clear expectations for both parties, reducing misunderstandings and fostering a productive working relationship.

Why Am I Being Asked to Sign This?

The introduction of written buyer agreements stems from a proposed settlement by the National Association of REALTORS® related to broker commissions. While some states have long required these agreements, they are now a nationwide standard for many real estate professionals.

Key Features of a Written Buyer Agreement

1. Transparency in Services and Fees

The agreement clearly specifies:

• The services your REALTOR® will provide.
• How and what they will be compensated (e.g., a flat fee, hourly rate, or percentage).

2. Negotiable Terms

You have the right to negotiate the terms, including:

• The duration of the agreement.
• The services included.
• The compensation structure.

Only sign an agreement that reflects the terms you’re comfortable with.

3. Flexibility

Agreements can be modified or exited under mutually agreed-upon conditions. Review your contract carefully and discuss options with your REALTOR®.

How Do These Agreements Benefit Me?

Written buyer agreements ensure clarity from the outset, helping you and your REALTOR® establish a strong working relationship. By defining roles, services, and expectations upfront, these agreements minimize confusion and potential disputes.

When Do I Need to Sign an Agreement?

You’ll need to sign a written buyer agreement before touring homes with your REALTOR®, whether in-person or virtually. However, if you’re attending an open house independently or simply inquiring about services, no agreement is required.

Do I Have to Pay My REALTOR® Out of Pocket?

Not necessarily. While the agreement specifies that you are responsible for payment, you can negotiate for the seller or their agent to cover your REALTOR®’s compensation. Discuss this possibility with your real estate professional.

Your Options and Rights

You have the freedom to:

• Choose the type of relationship you want with your REALTOR® (as allowed by state law).
• Request modifications to the agreement if your needs change.
• Exit the agreement under conditions outlined in the contract.

State-Specific Practices

Keep in mind that real estate laws vary by state. Consult your REALTOR® or a real estate attorney for guidance tailored to your location.

For more information and resources, visit facts.realtor.

Written buyer agreements are designed to protect both you and your REALTOR®. By understanding their purpose and your rights, you can confidently navigate the home-buying process and build a successful partnership with your real estate professional.