Buyer Representation Agreement Now Required

Starting August 17, 2024, real estate agents who want to show homes to buyers must have a written agreement with those buyers before any tours, whether in person or virtual.

Benefit to Buyers:

  • Clarity and Commitment: This agreement ensures that the relationship between the buyer and the agent is clear and that the agent is committed to helping the buyer find a home.
  • Professional Service: It encourages agents to provide better and more professional service, as their relationship with the buyer is formalized.
  • Transparency: Buyers will know exactly what to expect from their agent, including the services provided and any potential costs involved.

Without a buyer’s representation agreement the real estate agent works with – not for – a buyer on behalf of the listing agent, representing the seller’s interests. Here’s a more detailed breakdown:

  • Role and Relationship: The subagent assists the buyer in finding a home but their primary duty is to the seller. They are considered an extension of the listing agent and are obligated to act in the seller’s best interests.
  • Responsibilities to the Seller: Subagents must be loyal to the seller, working to secure the best price and terms for the seller, and disclosing any relevant information to the seller.
  • Disclosure to Buyers: Subagents must inform the buyer that they represent the seller’s interests, not the buyer’s. The buyer should understand that any information shared with the subagent can be communicated to the seller.
  • Compensation: Subagents typically receive a portion of the commission that the seller pays to the listing agent.

    Understanding the important of a buyer’s representation agreement and the consequences of a not having one helps buyers make informed decisions about their representation and ensures they are aware of where the agent’s loyalties lie.