Understanding the New Buyer Brokerage Agreement Requirements Effective August 17th

Understanding the New Buyer Brokerage Agreement Requirements Effective August 17th

Starting August 17th, 2023, all buyers looking to purchase residential property will be required to sign a "Buyer Representation Agreement" before viewing any property. Here's what you need to know:

Can’t We Just See the House First?
As of August 17th, no REALTOR® can unlock a door for you without a signed Buyer Representation Agreement. This is now a non-negotiable requirement, part of a legally binding settlement affecting all REALTORS®.

What Exactly Am I Signing?
The Buyer Representation Agreement is a contract between you, the Buyer, and your REALTOR®. It outlines the roles, responsibilities, and compensation for your REALTOR®. The compensation detailed in the agreement represents the maximum amount your REALTOR® can receive from the transaction.

Does This Mean I Have to Pay Commission as a Buyer?
Not necessarily. While the agreement states that the Buyer is responsible for the commission, there are situations where the Seller or Listing Broker may cover this cost. It’s important to discuss your specific situation with your REALTOR® to understand how this may apply to you.

Why the Change?
Traditionally, Sellers paid the Listing Broker's commission, which was then shared with the Buyer's Broker. However, this led to the misconception that “The Seller pays the Buyer’s Agent,” which isn’t entirely accurate. This misunderstanding prompted a class-action lawsuit, resulting in these new rules. Under the recent NAR settlement, REALTORS® can no longer advertise any compensation via the MLS, which means Buyer's Agents are no longer guaranteed a commission like before.

What if I’m Not Happy with My Agent?
The Buyer Representation Agreement will include a termination clause, so it’s crucial to carefully interview and select your REALTOR® before signing. The agreement’s length is determined by you and your agent, and it can be adjusted as necessary.

Key Points to Remember:
- The agreement is flexible; its duration can be as short or long as agreed upon.
- Terms may vary by state, so ensure you understand the specifics before signing.

Let’s Talk It Over
If you have any questions about the forms or what’s involved in the new process, feel free to reach out. I’d be happy to grab some coffee and discuss everything in detail. This is a big step in your home-buying journey, and I’m here to make sure you feel confident and informed every step of the way.