A buyer agency contract is a written agreement between a home buyer and a real estate agent that defines the agent’s duties, the length of representation, and how the agent is compensated. Since the 2024 NAR settlement, this contract is now mandatory before most agents can show homes, making it essential for every buyer to understand before signing. This guide walks through the core clauses and explains what is negotiable.
Before the settlement changed the rules, many buyers never saw one of these agreements. According to an NAR survey, only 41 percent of home buyers in 2023 signed buyer agency agreements before the new rules took effect. That has shifted significantly. Knowing what each clause means, and what you can negotiate, protects your interests from the first showing onward.
What Is a Buyer Agency Contract and Why Does It Matter Now?
A buyer agency contract formalizes the relationship between you and your agent before any property search begins. It sets out what the agent will do for you, how long they represent you, and how they get paid for that work.
The 2024 NAR settlement introduced a rule requiring agents to have a signed written agreement in place before showing homes to buyers. This is the buyer broker agreement new law that reshaped how agents and buyers interact across the country. You can no longer walk through a home with an agent and remain uncommitted. The agreement must exist first, and because it is a negotiated document rather than a take-it-or-leave-it form, you have real room to shape its terms.
Exclusive vs. Non-Exclusive Buyer Agency Agreements: Which Should You Sign?
The two main forms of buyer broker representation agreement differ in how much freedom they give you as a buyer.
An exclusive agreement means you commit to working with one agent for the duration of the contract. That agent earns a fee if you purchase any property during the term, even one you found yourself. In return, the agent typically invests more time and resources into your search.
A non-exclusive agreement lets you work with multiple agents at the same time. The agent who closes the deal gets paid; the others do not. This sounds appealing, but agents have less incentive to prioritise your search when they are competing with others for the same fee.
Refusing to sign a buyer agency agreement is your right, though most agents will decline to show you properties without one under the current rules. If an agent pressures you to sign a long exclusive agreement before answering basic questions, ask for a shorter initial term instead.
Buyer Agency Contract: Core Clauses to Review
Every buyer agency contract should include the following clauses. Use this as a checklist when reviewing any agreement handed to you.
- Parties and property type. Full legal names of the buyer and the agent or brokerage, plus the category of property being sought (residential, investment, vacant land).
- Scope of representation. A description of the geographic area and price range the agent will search within.
- Term of agreement. The start and end dates of the representation period.
- Agent duties. A list of specific services: property search, inspection coordination, negotiation, and contract review.
- Buyer broker agreement compensation. The agreed fee structure, expressed as a flat fee or percentage, and who is responsible for paying it. Post-settlement, average implied commission rates for agents have remained around 2.6%, though buyer-side rates did edge lower by 0.10 to 0.15 percentage points during 2024. You can negotiate this figure.
- Seller-paid compensation disclosure. A clause confirming whether the agent will accept compensation offered by a seller’s agent and how any overage is handled.
- Protected properties clause. A list of any properties you were already aware of before signing, so you are not obligated to pay this agent’s fee if you purchase one of them.
- Termination rights. The conditions under which either party can end the agreement early and any notice period required.
- Dispute resolution. Whether disputes go to mediation, arbitration, or court.
For a practical look at how an agent works through each of these stages on your behalf, see How Our Buyers Agent Process Works. If you want help building a search plan before you sign anything, the buying strategy guide covers how to set your criteria and approach the market.
How to Negotiate Compensation and Termination Terms Before You Sign
Compensation and exit terms are the two clauses buyers most often accept without question. Both are negotiable.
Step 1: Ask about the compensation structure upfront. Buyer broker agreement compensation can be structured as a flat fee, a percentage of the purchase price, or a hybrid. Ask the agent to explain exactly what triggers their fee and whether a seller’s offer of compensation will reduce what you owe.
Step 2: Request a shorter initial term. A 30 to 60-day agreement gives you time to assess the agent’s performance before committing to a longer arrangement. Many agents will agree to this, especially in a first engagement.
Step 3: Negotiate a clean exit clause. Ask for the right to terminate with written notice, typically 7 to 14 days, without penalty if the agent has not yet introduced you to any properties.
Step 4: Clarify protected properties. If you have already visited open homes or spoken to selling agents independently, list those properties in the agreement. This prevents a situation where you owe commissions to two different firms on the same purchase.
Key Steps When Completing Your Buyer Agency Contract
Filling out the form correctly matters as much as negotiating the terms. Follow these three steps before you sign.
Step 1: Set a defined term. [S1] Write in a specific start and end date. Many agents suggest a term of around 90 days, which gives both parties a clear window to work within.
Step 2: Include a termination rights clause. [S2] Specify exactly how the contract can be canceled before the end of the term, including the notice period and any conditions that must be met. Vague termination language can leave you locked in longer than you intended.
Step 3: List your protected properties. [S3] Before signing, identify any properties you already know about from previous agents or your own research. Add these to the agreement by address so you are not exposed to double commission obligations.
A buyers agent can walk you through each of these steps and flag anything in the agreement that needs attention before you sign.
FAQs
Can I refuse to sign a buyer agency agreement?
You can refuse, but most agents working under the post-2024 NAR settlement rules will not show you homes without a signed agreement in place. If you are uncomfortable with the terms, you have the right to negotiate them or walk away. Refusing to sign a buyer agency agreement entirely means most agents will be unable to represent you formally.
Can I write my own real estate purchase agreement?
You can draft your own agreement, but it needs to meet the legal requirements of your state and cover all standard clauses, including compensation, term, duties, and termination. Most buyers use a form provided by their agent or brokerage. If you write your own, have a real estate attorney review it before both parties sign.
What does agency agreement mean in real estate?
An agency agreement in real estate is a contract that creates a formal legal relationship between a buyer (or seller) and an agent. It defines the agent’s duties, the scope of their authority to act on your behalf, how long the relationship lasts, and how the agent is compensated. Without it, the agent has no formal obligation to represent your interests.
Is a buyer broker agreement required in every state?
The 2024 NAR settlement made written buyer broker agreements a condition of MLS-member agents showing homes in most markets, but state law varies. Some states had their own requirements before the settlement; others are still catching up. Check with a local real estate attorney or your agent to confirm what applies in your state.
What should I not tell my real estate agent?
Avoid sharing your maximum budget, your urgency to buy, or your emotional attachment to a specific property before negotiations begin. A Buyer’s Agent works exclusively for you and is obligated to keep this information confidential. If you are working with an agent who also represents sellers, that same information could influence how a deal is structured against your interests.
Conclusion
A buyer agency contract defines your relationship with your agent, sets the compensation terms, and protects you from unexpected obligations. Since the 2024 NAR settlement made these agreements mandatory before most agents can show homes, every buyer needs to understand what they are signing.
Before you commit to any agreement, check the term length, confirm the termination rights are clearly written, and list any properties you already know about. Those three steps take less than ten minutes and can save you significant cost and confusion later.
