What Is A Buyer’s Agent Agreement In Real Estate?

Buyer's agent
Buyer's agent agreements will soon be required in all states.

Entering the housing market can be thrilling, but it can also feel overwhelming. With so many factors to consider, having a trusted advisor in your corner is crucial. That’s where a buyer’s agent comes in, and a buyer’s agent agreement formalizes this relationship. While most people have heard of or even used a listing agreement when selling their home, not as many people are aware of a buyer’s agent agreement. Needless to say, think of this as a similar document but on the buyer’s side instead.

A buyer’s agent agreement explained

Think of a buyer’s agent agreement (also known as a buyer-broker agreement) as a road map for your house hunting journey. It’s a formal contract between you and your real estate agent that outlines your working relationship. It clarifies what you can expect from each other, ensuring a smooth and successful home purchase.

Why is it important?

A buyer’s agent agreement benefits both you and your agent:

  • Clarity and Transparency: The agreement spells out the agent’s duties, such as property searches, negotiations, and market updates. You’ll also understand how your agent gets compensated (usually a commission paid by the seller).
  • Fiduciary Duty: In many cases, the agreement establishes a fiduciary duty, meaning your agent is legally obligated to act in your best interests. They must prioritize your needs and disclose any potential conflicts.
  • Commitment: The agreement defines the time frame you’ll be working together. This helps ensure the agent dedicates their time and expertise to finding your dream home.

What to look for in a buyer’s agent agreement

The specifics will vary, but common inclusions are:

  • Term: The duration of the agreement (typically a few months).
  • Scope of Services: What the agent will do for you (e.g., property searches, negotiations, communication).
  • Compensation: How the agent gets paid (usually a commission percentage).
  • Termination Clause: How either party can end the agreement.

Summary

Although buyer’s agent agreements have not been used often historically in the state of Florida, this will be changing later this year. As a result of a recent settlement, the National Association of REALTORS® (NAR) agreed to create a new rule requiring multiple listing service (MLS) participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. 

When choosing a buyer’s agent, in addition to obtaining a referral, you may also want to interview several candidates and ask about their experience and approach. In addition, this is a perfect time to discuss the buyer’s agent agreement thoroughly and ask any questions before signing.

Are you looking to buy or sell a property in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc.! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.