Buying a House? Watch This Before You Tour Homes

Buying a House? Watch This Before You Tour Homes

If a real estate agent recently asked you to sign a Buyer’s Brokerage Agreement before touring a home and it caught you off guard, you are not alone. Since the changes that came from the NAR lawsuit settlement in August 2024, this process has become a required part of working with a buyer’s agent.

Recently, I’ve had a few buyers refuse to sign this agreement because they were unfamiliar with the new policies and felt uncomfortable committing to something they didn’t fully understand. So, let’s break it down in simple terms and explain exactly what this agreement is, why it exists, and how commissions work moving forward.

What Is a Buyer’s Brokerage Agreement?

A Buyer’s Brokerage Agreement is a legal agreement between a home buyer and a licensed real estate agent that outlines how the agent represents the buyer during the home search and purchase process.

Under the new federal guidelines that resulted from the National Association of Realtors (NAR) settlement in August 2024, buyers are now required to sign a Buyer’s Brokerage Agreement before touring homes with a real estate agent.

This agreement helps create transparency between buyers and agents, especially regarding representation and compensation.

Why Did This Change Happen?

In August 2024, the NAR lawsuit settlement changed how buyer agent commissions are discussed and handled in real estate transactions across the country.

Before these changes, many buyers didn’t fully realize how buyer’s agents were compensated because commissions were commonly offered through the MLS by the seller. The new rules were designed to create more transparency so buyers clearly understand:

• Who represents them
• How their agent gets paid
• What services are being provided
• What obligations both parties have

Because of these new policies, agents are now legally required to have a signed Buyer’s Brokerage Agreement in place before showing homes.

How Long Does a Buyer’s Brokerage Agreement Last?

One of the biggest misconceptions is that buyers are locked into a long-term commitment. That’s not necessarily true at all. The agreement terms are completely negotiable between you and your agent.

For example, a Buyer’s Brokerage Agreement can be:

• For just 1 day
• For a weekend of showings
• For 2 weeks
• For 30 days
• For 6 months
• For a specific property only
• For a specific community
• For a specific city or area

Everything depends on what you and your real estate agent agree to. If you only want to tour one new construction community or one resale property, the agreement can be written specifically for that situation.

How Do Buyer Agent Commissions Work?

This is the part many buyers are most concerned about, so let’s make it simple.

Inside the Buyer’s Brokerage Agreement, your agent is required to disclose the commission percentage they are requesting for representing you.

For example, I generally ask for a certain percentage commission in my agreements. However, when we submit an offer to purchase a home, we typically ask the seller to pay that commission as part of the transaction. In many cases, the seller agrees to pay the buyer’s agent commission.

However, there are situations where:

• The seller may counter back at a lower percentage
• The seller may offer a flat fee instead
• The seller may choose not to contribute at all

At that point, it becomes a conversation between the buyer and the buyer’s agent. Some agents may ask the buyer to pay the difference if the seller does not cover the full amount. Other agents may choose to reduce their compensation instead. Every agent handles this differently.

Most importantly, buyers still have options. If the seller does not agree to pay the buyer’s agent commission and the terms no longer make sense for you financially, you have the option to back out and not move forward with the transaction.

Are There Any Exceptions?

Yes. There are a couple of situations where a Buyer’s Brokerage Agreement is generally not required.

These exceptions include:

• Attending an open house
• Touring a home directly with the listing agent

For example, if you walk into an open house without your own agent, you are typically not required to sign a Buyer’s Brokerage Agreement just to view the property.

Similarly, if the listing agent is showing you their own listing directly, a buyer agreement may not be required for that initial showing.

However, if you are working with your own buyer’s agent and want them to show you homes, the agreement is mandatory before touring properties.

What Happens If an Agent Doesn’t Have You Sign One?

Under the current rules and federal requirements tied to the NAR settlement changes, licensed real estate agents are required to have a signed Buyer’s Brokerage Agreement before showing homes to buyers.

If an agent is showing properties without having this agreement signed first, they are not following the current legal and industry requirements. This is why many buyers are suddenly hearing about these agreements for the first time, agents are now legally required to have these conversations upfront.

Final Thoughts

At the end of the day, a Buyer’s Brokerage Agreement is really about transparency and setting clear expectations between buyers and agents.

It does not automatically mean you are trapped in a long-term contract, and the terms can often be customized to fit your comfort level and situation.

The biggest thing buyers should understand is this: the real estate industry changed significantly after the August 2024 NAR settlement, and these agreements are now a mandatory part of the home buying process when working with a buyer’s agent.

As always, if you ever have questions about how Buyer’s Brokerage Agreements work, commission structures, or what’s negotiable, feel free to ask before signing anything. A good real estate agent should always take the time to explain the process clearly and make sure you feel comfortable moving forward.

If you’re considering buying or selling a home in the Las Vegas Valley, please don’t hesitate to reach out to me. I’ll get back to you personally and promptly. Thanks for visiting!

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Angela O’Hare
Favorite Las Vegas Realtor
Keller Williams Realty Las Vegas
Lic. #180246
702-370-5112
[email protected]
www.neighborhoodsinlasvegas.com