Buyer-broker agreement

A buyer-broker agreement is the contract between a homebuyer and a real estate brokerage that authorizes the agent to represent the buyer and specifies how the agent will be compensated. Post-2024 NAR settlement, this agreement is required in writing before a buyer's agent can show the buyer any MLS-listed property.

How it works: the agreement specifies the agent's representation scope (exclusive or non-exclusive), duration (often 30 to 180 days, sometimes property-specific), and compensation. Compensation can be a percentage of the purchase price, a flat fee, or hourly. The agreement also specifies the source of compensation: paid by the seller (when the seller offers buyer-side comp in the listing), paid by the buyer directly, or split between the two.

Why it matters: the agreement is a binding contract that obligates the buyer to compensate the agent under specific conditions. The terms vary materially by brokerage and by negotiation, so reading the proposed agreement before signing matters. For higher-priced transactions where the compensation dollar amount is meaningful, having a real estate attorney review the agreement is sometimes worthwhile.

Common gotcha: the duration and exclusivity scope can catch buyers off-guard. An exclusive agreement that runs 90 days means the buyer can't work with another agent during that window, and a property-tour through the listing agent's open house can sometimes still trigger the buyer's agent's compensation under the agreement's "introduction" language. Buyers should understand what triggers compensation under the agreement before signing.