Written Buyer Agreements in Real Estate - What Buyers Need to Know
A written buyer agreement is a legally binding contract between a real estate buyer and their real estate agent that outlines the services the agent will provide and how they will be compensated. The agreement also clarifies the expectations of both parties and the agency relationship. When a homebuyer engages with a Realtor® they will be asked to sign a written buyer agreement. As of August 17, 2024, the National Association of Realtors® (NAR) began this requirement for all Realtors® nationwide. While some states have required these agreements previously (not Florida), the new rule makes them standard nationwide.
WHY IS A WRITTEN BUYER AGREEMENT REQUIRED?
The requirement of a written buyer agreement is a result of the National Association of Realtors® (NAR) settlement regarding broker commissions.
WHEN IS A WRITTEN BUYER AGREEMENT REQUIRED?
Realtors® must have a written buyer agreement signed before showing properties. This includes both in-person and live virtual tours.
WHY IS A WRITTEN BUYER AGREEMENT IMPORTANT FOR BUYERS?
It provides homebuyers with additional choice and transparency and protects both the agent and the consumer.
It clearly defines the services the agent will provide and how the brokerage will be compensated.
It allows buyers to discuss and negotiate details such as compensation and services before a transaction takes place.
HOW LONG IS AN AGREEMENT AND CAN A BUYER CANCEL AN AGREEMENT?
The term of the agreement can be negotiated between the buyer and agent. Most agreements allow for revisions or cancellation, as long as both parties agree to the terms.
IS THE WRITTEN BUYER AGREEMENT NEGOTIABLE?
Yes, the agreement can be negotiated between the buyer and agent, from services provided to compensation amount.
IS THE BUYER COMMITTING TO PAY THE BROKERAGE?
Not necessarily. While the written buyer agreement includes payment terms with your Realtor®, you can negotiate for the seller to pay the brokerage commission. If the seller is unwilling to pay a brokerage commission to the buyers’ broker, then the buyer would be responsible for payment of their broker’s commission per the terms of the written buyer agreement. It should be noted that offers of compensation (when a seller or a seller’s agent shares compensation with a buyer’s agent) can no longer be shared on Multiple Listing Services (MLS). Offers of compensation are still an option but must be communicated off-MLS if a seller chooses to make an offer available.
If you would like to take a deeper dive into the NAR Settlement or the requirement of Written Buyer Agreements, visit the National Association of Realtors website.
