In August 2024, important changes were made to the rules surrounding buyer representation in real estate.

These updates are reshaping the way home buyers work with real estate professionals—and it’s essential to understand how they affect you.

So, what do these changes mean for home buyers?

If you decide to work with a buyer’s agent—or in our case, an exclusive buyer’s agent—you’ll be required to sign a written agreement outlining the terms of that relationship. Buyer broker agreements have already been required in Maryland for several years, however this 2024 NAR requirement means greater transparency and accountability across the county and in all real estate transactions.

What is included in a Buyer-Broker Agreement

Every state or jurisdiction has its own version of a buyer-broker agreement, but the core components are generally the same.

The agreement should clearly outline:

• a start and end date
• the services provided by the exclusive buyer broker
• how and by whom pays your exclusive buyer broker for their services
• how to terminate the agreement
• retainer fees, broker fees, admin fees

The Importance of Representation in Real Estate

As the buyer, you’re the central figure in the real estate transaction. While the seller owns the property, you are the one making the financial investment. You deserve full representation—and that means having a trusted advisor and advocate on your side. That’s where fiduciary duty comes in.

What is a fiduciary?

A fiduciary in real estate has a legal and ethical obligation to act in their clients best interest. A consumer, a seller or buyer, is a customer until they have a signed agreement with an agent or broker. The signed agreement creates the fiduciary relationship. At this point, the exclusive buyer agent or buyer agent is required to put your interests first.  

About Us for a Moment

Since HomeBuyer Brokerage is an exclusive buyer brokerage (we only work for home buyers) this article focuses on the relationship between a buyer and their broker or agent. 

We take representation seriously and believe home buyers should have an advocate and fiduciary who is 100% loyal, no dual agency, during the home buying process. We are members of the National Association of Exclusive Buyer Agents, an organization dedicated to representing home buyers.

Back to You, the Home Buyer

There are three basic buyer broker agreements created by real estate commissions in Virginia, Maryland and Washington D.C. 

Each agreement and in fact all buyer brokerage agreements, should contain these key elements. 

Start and end date

Compensation for the buyer broker

Details of the services provided to the buyer client

How the buyer broker is paid

How to end the agreement

Any additional payments to the buyer brokerage

Any additional payments to the buyer brokerage

The additional broker compensation section will include admin fees, retainer fees, broker’s service fee’s or any additional fee’s the brokerage charges. 

How to end the buyer and buyer broker relationship

The agreement may end naturally once you’ve purchased a home. It can also end early if either you or your agent chooses to terminate the relationship. This typically requires written notice, and the agreement should explain how that process works.

How the buyer broker is paid

Who will compensate the buyer broker? Every agreement will list options for how your buyer broker will be paid. In my experience, the seller often offers a subsidy to cover this cost. The buyer broker is paid at settlement. In other situations, the buyer may agree to pay directly.

Tip: What happens if the seller subsidy doesn’t cover the buyer broker fee?  This would be an opportunity for the buyer broker to lower their commission or discuss with the buyer if additional payment would be an option. 

What services are provided by the buyer broker?

• Honest communication 
• Conversations about your budget, your timeline and your ideal location
• Explanation of current market conditions and how they affect your situation
• Automatic searches from the Multiple Listing Service where you can heart houses of interest
• Provide comparative market analysis on properties of interest
• Schedule and coordinate tours
• Point out red flags and issues at a property
• Develop a contract offer that suits your need
• Guide you through the entire home buying process from house tours to the settlement table.

Amount of compensation for the broker

Will there be a flat fee for service? If so, who pays?

Will there be a percentage of the sales price? Again, who pays the buyer or the seller (by way of asking for a seller subsidy) 

Remember, all buyer brokerage agreements will have a start and end date. You can always extend the buyer brokerage agreement if needed.

Have questions about buyer representation or what’s included in a buyer-broker agreement in your state? We’re here to help. Victoria@homebuyerbrokerage.com 

‍

How can we help?

The exclusive buyer agents at HomeBuyer Brokerage specialize in serving home buyers. Please reach out with questions at info@homebuyerbrokerage.com.