Ask Phyllis: a blog series of frequently asked real estate questions.
Understanding the Buyer’s Brokerage Agreement
Dear Phyllis,
My wife and I are in a two-story home, and we think the time is nearing for us to move to a single-story home. We have a Realtor we have known for years. A new listing in our neighborhood just came on the market, and I texted him to see the home. Before even looking at the home, he told me I had to sign a paper stating he represented us. And that if the seller didn’t pay his commission, we would have to pay him ourselves. Although he explained that this was because of the National Association of Realtors lawsuit, I was insulted. We have known him for over twenty years, and he helped both of our daughters buy their first home. Am I right in feeling insulted?
DK
Dear DK,
A Buyer’s Brokerage Agreement is a contract between a buyer and their real estate agent that outlines exclusive representation, services provided, compensation terms, agreement duration, and cancellation options. It can also state that it is only for the home you want to see. It ensures the agent’s commitment to prioritizing the buyer’s interests and clarifies responsibilities on both sides.
As members of the MLS, we must sign this agreement before a buyer tours a home—whether in person or virtually—to provide transparency about services and costs. However, a signed agreement isn’t needed if you’re simply speaking to an agent at an open house or inquiring about their services. Agent compensation remains fully negotiable for both buyers and sellers. Discussing a Buyer’s Brokerage Agreement can feel uncomfortable, especially with long-time relationships. However, this agreement has become required for all Realtors using the Multiple Listing Service (MLS). Additionally, they can be fined if they show you a home before signing this agreement. I understand that you feel insulted but your Realtor follows very strict rules.
