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What Is a Buyer Representation Agreement? What You're Signing
A buyer representation agreement (BRA) is required before touring homes (Aug 17, 2024). Must specify compensation amount or method, services, duration. Gap clause: if seller pays less than agreed fee, does buyer owe the difference? Compensation is negotiable before signing — not after you're under contract. Own Luxury Homes® 12-Point Agent Integrity Audit™.
What Is a Buyer Representation Agreement? What You're Signing
As of August 17, 2024, you must sign a buyer representation agreement before an MLS-affiliated agent can show you any home. Here is exactly what you are signing and what to look for before you do.
What a Buyer Representation Agreement Must Contain
Under the NAR settlement requirements, every buyer representation agreement used by an MLS-affiliated agent must include: Specific compensation disclosure: the agreement must state either a specific dollar amount, a specific percentage, or a specific method for determining compensation. Vague language like "whatever the seller offers" is no longer compliant. You must see a clear number or formula. Services description: what the agent will do for you: searching for properties, arranging showings, preparing and negotiating offers, managing inspections and contingencies, coordinating closing. Duration: the agreement must have a defined time period. Be cautious of long-term agreements (6-12 months) with a new agent you have not worked with before. Compensation source acknowledgment: many agreements now include language noting that while the agent expects a specific compensation amount, this can be funded by the seller (via concession), the buyer, or a combination.
What to Check Before You Sign
Exclusivity clause: most buyer representation agreements are exclusive — you cannot use a different agent while it is in effect. If you are early in your search and not sure you want to commit to this agent, ask for a non-exclusive agreement or a short initial term (30 days) with an option to renew. The compensation amount: the agreement states the agent's compensation expectation. This number is negotiable before signing. Do not assume the first number presented is non-negotiable. Ask directly: "Is this fee negotiable?" The gap clause: what happens if the seller offers less than the amount specified in your agreement? Some agreements require the buyer to pay the difference. Others allow the agent to accept whatever the seller offers and waive the gap. Read this carefully — it is the clause most likely to produce a surprise. Early termination: under what conditions can you exit the agreement early? What happens to homes you toured under the agreement if you exit? A good agent includes a clear, reasonable termination provision.
Compensation Is Negotiable Before You Sign
The compensation specified in the buyer representation agreement is not set in stone before you sign it. It is the opening of a negotiation. Agents typically present their standard fee. You can: 1. Accept the fee as presented. 2. Ask for a reduction for specific reasons (you are a repeat client, the purchase price is high, the timeline is short and clear). 3. Propose a tiered structure (lower percentage for higher-priced homes). 4. Propose a success-based arrangement where the agent accepts whatever the seller offers and waives any gap. The best time to negotiate the agent's fee is before you sign, not after you are under contract on a specific home. Once you are emotionally attached to a property, your leverage to renegotiate is gone.
“The buyer representation agreement is the most important document change to come out of the NAR settlement for buyers, and most buyers are signing it in the parking lot of the first house they want to see, without reading it. That is a mistake. Read it. Ask about the exclusivity clause, the compensation amount, and the gap provision. Negotiate the fee if you have grounds to. Know exactly what happens if a seller offers less than the specified amount. And ask for a reasonable termination clause if you are not yet sure about the agent. A good agent will welcome those questions. A defensive response to a reasonable question about a contract you are signing is itself useful information.”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
Do I have to sign a buyer representation agreement?
If you are working with an agent who uses an MLS (which covers virtually all agents in the U.S.), you must sign a written representation agreement before they can show you any home as of August 17, 2024. You are not required to use any particular agent, and you can shop agents before committing to one. Once you sign an exclusive agreement, you are generally obligated to work with that agent for its duration. Read the agreement before signing; negotiate the compensation and the exit clause if needed.
What should I look for in a buyer representation agreement?
Key items to review: (1) compensation amount — is it a specific number or percentage, and is it negotiable before you sign? (2) exclusivity — are you locked in to this agent, and for how long? (3) the gap clause — if the seller offers less than the specified fee, do you owe the difference? (4) early termination — under what conditions can you exit? (5) the services description — what specifically is the agent committing to do? A reputable agent will answer all of these questions without hesitation before you sign.
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"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)