What You Need To Know About Buyer Agreements

Real estate now requires buyers to sign a representation agreement before viewing homes.

Are you planning to buy a home soon? Recent changes in the real estate market have made buyer representation more crucial than ever. I’ll explain these changes and how they impact your transaction when buying a home. 

Changes in the real estate market. First, the co-broker fee information has been removed from the MLS. This means that the compensation a buyer's agent receives from the listing agent is no longer publicly available. As a result, buyers must now discuss and agree upon compensation with their agents upfront. Second, you are now required to sign a representation agreement before viewing properties. This change ensures that you are formally represented and that your agent's obligations and compensation are clearly defined.

"Signing a buyer agreement upfront ensures you're formally represented from the very start of your home search."

The importance of the buyer representation agreement. We've always had a buyer representation agreement—typically a five-page document—that outlines our fiduciary duties to you and your responsibilities to us, including how we get paid. While this agreement isn't new, the recent changes have brought its terms into sharper focus. Under the "Broker Compensation" section, the agreement specifies our fee, when it's payable, and how it gets paid. Traditionally, we would collect our fee from the listing agent's offered co-broker fee. Now, we have to directly ask the listing agent if they're offering a co-broker fee, and if it's less than our agreed-upon fee, you could be responsible for the difference.

What happens if the seller doesn't pay the fee? If the listing agent, seller, or builder does not pay the co-broker fee, you may be responsible for paying your agent's fee. However, we always strive to negotiate our fee from the other side first, even in For Sale By Owner situations. This makes it crucial to have a skilled agent who understands how to navigate these negotiations effectively.

New considerations for bonuses and incentives. Builders often offer rewards or incentives to agents for bringing in buyers. While we've always been allowed to accept these, we cannot receive more than the fee specified in our buyer agreement without your written approval. If a bonus exceeds our agreed-upon fee, you must authorize this in writing.

Introducing the short-form buyer agreement. A shorter buyer agreement form is now available for those just beginning their home search without an established relationship with an agent. Think of it as a "dating" form—agreeing to work together on a trial basis. If you decide to continue the relationship, it's essential to transition to the full buyer representation agreement, which details all parties' obligations.

Why you need a buyer's agent now more than ever. A listing agent cannot represent you fully. They can act as an intermediary but cannot solely advocate for your best interests. Having a dedicated buyer's agent allows you to receive expert advice on pricing, access exclusive information, and negotiate effectively. We can identify red flags, provide insights into the property's history, and guide you through disclosures and inspections. 


Additional services we provide. We offer services that protect your most significant asset and ensure a smooth transaction. With our experience and dedication, we set the tone for better negotiations and help you avoid conflicts that can arise in direct talks.

While the buyer representation agreement has remained unchanged, recent market shifts have made its implications more pronounced. Understanding these changes empowers you to make informed decisions and underscores the value of having a knowledgeable agent. Feel free to call me at (210) 305-5665 or email me at [email protected] if you have any questions or are considering purchasing a home. I’m committed to representing you correctly and making your home-buying experience seamless.