Since the 2024 NAR settlement, most buyer's brokers will ask you to sign a buyer representation agreement before they'll show you homes. This is a contract. It outlines what it says, what it means, and what to watch out for before you sign.
Why This Is Happening Now
For decades, buyer's broker compensation was handled behind the scenes. The seller's agent offered a commission split to any buyer's broker who brought a buyer, baked into the listing. Buyers never saw it, never negotiated it, and often didn't fully understand that their agent was being paid by the seller's side of the transaction.
The 2024 NAR settlement changed that. The practice of listing buyer-agent compensation in the MLS was eliminated. Now, buyers and their agents must negotiate compensation directly — and that negotiation must happen before the agent shows you homes.
The buyer representation agreement is the contract that documents that negotiation. These agreements existed before the settlement, but they're now effectively required in most markets.
What a Buyer Representation Agreement Says
The specifics vary by state and by agent, but most buyer representation agreements cover the same core elements:
Scope of representation.
What the agent agrees to do for you: help you find properties, present offers, negotiate on your behalf, guide you through the transaction. This section should be specific. Vague language here is a red flag.
Compensation terms.
This is the most important section. It defines:
• How much you agree to pay the agent (flat fee or percentage of purchase price)
• When you owe the payment (typically at closing)
• What happens if the seller offers a commission that covers the agreed amount (usually, the seller's contribution counts toward what you owe)
• What happens if the seller offers more than the agreed amount (some agreements let the agent keep the excess; others require it to go back to you)
Exclusivity clause.
Most buyer representation agreements are exclusive — you agree to work only with this agent for the duration of the agreement. If you find a home on your own, through a different agent, or at an open house, you may still owe your agent their compensation.
This is the clause that surprises buyers most. Read it carefully.
Duration.
How long the agreement lasts. Typical terms are 30–90 days, sometimes longer. Some agreements automatically renew; others expire.
Geographic scope.
Some agreements cover a specific area; others cover any property you purchase during the term. If you're looking in multiple markets, understand what you're agreeing to.
Termination clause.
How you end the agreement if it's not working. Most agreements require written notice; some have a notice period. Understand this before you sign.
The Compensation Conversation You Need to Have
Before you sign, have an explicit conversation with your agent about compensation. Specifically:
What are you agreeing to pay, and in what form?
Percentage of purchase price is the most common structure. On a $400,000 home, 2.5% is $10,000. Understand the number in dollars, not just percentages.
What happens if the seller offers a commission?
In most transactions, sellers still offer some compensation to buyer's brokers as a way to attract buyers. If the seller offers 2.5% and that's what you've agreed to pay, you typically owe nothing out of pocket — the seller's contribution covers it. If the seller offers 1.5% and you've agreed to 2.5%, you may owe the difference. Get clarity on this.
What if you find a home on your own?
If you're under an exclusive agreement and you find a home through your own search — Zillow, an open house, a for-sale-by-owner — you may still owe your agent their compensation. Some agreements carve out properties you've already identified; most don't. Know what you're agreeing to.
Is the compensation negotiable?
Yes. Everything in this agreement is negotiable before you sign it. Agents who tell you otherwise are wrong. You can negotiate the rate, the term, the exclusivity clause, and the termination terms. An agent who won't negotiate at all is telling you something about how they'll negotiate on your behalf.
What to Ask For Before You Sign
A shorter initial term.
If you've never worked with this agent before, ask for a 30-day initial term with the option to extend. This gives you an exit if the relationship isn't working without being locked in for 90 days.
A clear termination clause.
You should be able to end the agreement with reasonable notice (30 days or less) if the agent isn't performing. Make sure this is in the contract.
Clarity on the exclusivity clause.
If you've already identified specific properties you're interested in, ask to have them carved out of the exclusivity clause. If you find a home through your own search, understand whether you owe the agent anything.
Compensation tied to performance.
Some buyers negotiate a tiered compensation structure — a base rate plus a bonus if the agent negotiates a price below a certain threshold. This aligns the agent's incentives with yours. Most agents won't agree to this, but it's worth asking.
Should You Sign One?
Yes — with the right agent and the right terms.
A buyer representation agreement formalizes a relationship that should be formalized. It clarifies what you're paying for, what the agent is committing to do, and what happens if things go wrong. That clarity is good for both parties.
The alternative — working with an agent informally, without a written agreement — leaves you with no documented protection if the relationship goes sideways, and leaves the agent with no documented commitment from you. Neither party is well-served.
The question is whether you've read, understood, and negotiated the terms that matter to you in a buyer representation agreement.
The One Thing That Changed Everything
Before the NAR settlement, most buyers never had this conversation. The compensation was invisible, the agreement was sometimes skipped, and the whole thing happened in a way that felt like it wasn't really about money.
It was always about money; now it's visible.
That visibility is a feature: you know what you're paying, what you're getting. You can negotiate, compare, and make an informed decision.
That's how it should have worked all along.
Actionable Steps
Read the fine print. Never sign a buyer representation agreement without reading it completely. Pay close attention to the duration of the agreement, the compensation structure, and the termination clause.
Negotiate the terms. Everything is negotiable. If you aren't comfortable with a six-month commitment, ask for a 30-day trial period or an agreement limited to a specific property.
Understand the fees. Be clear on exactly how your buyer's broker will be paid. Use ARRO to learn how to negotiate these fees and structure your offers to minimize out-of-pocket costs.
Frequently Asked Questions
Do I have to sign a buyer representation agreement?
In most markets, yes — agents will require it before showing you homes. This is a result of the 2024 NAR settlement. Some agents may show you one property without an agreement, but most won't commit to representing you without one.
What if I don't want to sign an exclusive agreement?
You can try to negotiate a non-exclusive agreement, which allows you to work with multiple agents. Most agents won't agree to this because it reduces their certainty of being compensated. If you want to work with multiple agents, be upfront about it — some agents will work with you on a non-exclusive basis, especially for a limited time.
Can I negotiate the compensation rate?
Yes. Compensation is negotiable. The rate, the structure, and the terms are all open to negotiation before you sign. An agent who tells you the rate is fixed is wrong.
What happens if I buy a house without using my agent?
If you're under an exclusive buyer representation agreement and you purchase a home within the agreement's scope and term, you likely owe your agent their agreed compensation — even if they weren't involved in finding the property. This is why understanding the exclusivity clause matters.
What if my agent isn't performing?
Check the termination clause in your agreement. Most agreements allow you to terminate with written notice. If the agent has done something that rises to the level of a licensing violation, you can file a complaint with your state's real estate licensing board. ARRO is built to guide you through this process. Our platform helps you organize your readiness and matches you with vetted buyer's brokers who will fight for your interests.
Haj Khalsa is the founder of ARRO, Creative Acorn, and HANGTIME — a Santa Fe-based outdoor lifestyle brand. He is also a rock climber, telemark skier, and dad.