When you’re in the market for a new home, understanding your relationship with your real estate agent is essential. One of the key elements of this relationship is the Exclusive Buyer-Broker Agreement. This legally binding contract sets the expectations for both you and your agent. As of August 17, 2024, new federal legal requirements have made these agreements mandatory for all real estate agents who use the MLS (Multiple Listing Service). So, what does this mean for you as a homebuyer?
Whether you’re buying your first home or your fifth, this agreement offers clarity, protection, and peace of mind in an otherwise complex process. Let’s break down what you need to know—so you feel confident and empowered as you step into the world of real estate.
Whatever you want to call it, an Exclusive Buyer-Broker Agreement, Buyer Representation Agreement, Buyer Agency Agreement, or Buyer Agent Agreement, etc., they’re all the same. At its core, a Buyer-Broker Agreement is a legally binding contract between you (the buyer) and your real estate agent. Think of it as a mutual promise—a commitment that they will represent you, free from conflicts of interest, with your best interests at heart, and in return, you agree to work exclusively with them. It’s all about clarity.
As of August 17, 2024, due to an antitrust lawsuit, the National Association of Realtors (NAR) was a part of, federal law now mandates that an Exclusive Buyer-Broker Agreement must be signed before an agent shows any property. Previously, this wasn’t required in every state, but now it’s standard practice nationwide.
One of the significant changes is that your agent’s commission may no longer be paid by the seller’s agent. Instead, you’ll negotiate with the seller to cover your agent’s fee, which could affect your overall offer and negotiations. Additionally, listings on the Multiple Listing Service (MLS) no longer display the buyer’s agent’s compensation, so your agent will need to gather this information for you directly from the listing agent.
While this might sound like an extra layer of complexity, it’s designed to ensure transparency and fairness in the real estate process—so you always know who is working for you and how they’re being compensated.
In today’s real estate landscape, transparency is crucial. With a Buyer-Broker Agreement, both you and your agent are on the same page regarding responsibilities and expectations. It can be comforting to know that your agent isn’t just opening doors—they’re actively protecting your interests, making sure you don’t overpay, miss important timelines or details, or fall into common traps during the homebuying process.
But there’s more. Many agents are self-employed and rely solely on commissions for their income. By signing this agreement, you’re ensuring that your agent is compensated for their hard work and dedication. After all, you want an agent who is as committed to helping you succeed as you are to finding the perfect home.
You might hear the terms “real estate agent” and “real estate broker” used interchangeably—but they’re not quite the same thing. Your real estate agent is the one who helps you view homes and works directly with you during the buying process. A real estate broker, on the other hand, has more advanced education and licensing. They often oversee multiple agents and manage real estate offices.
In some cases, your agent might also be a broker. If not, they work for one. Either way, rest assured that both are there to ensure your homebuying journey goes smoothly.
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When you sign a Buyer’s Agent Agreement, it will typically include the following key components:
Term Length: The agreement will specify how long you’ll be working exclusively with your agent. It could be for one home showing, 30 days, 90 days, six months, or another timeframe that fits your needs. You can always sign another one if you’d like. This ensures that both you and your agent are fully committed for the duration of the homebuying process.
Termination Rights: No one likes the idea of “breaking up,” but if things aren’t working out, the agreement will spell out how either party can end the relationship. Make sure you understand the conditions under which the agreement can be terminated, such as notice periods or potential compensation owed to the agent.
Exclusivity: By signing this agreement, you’re agreeing to work solely with your agent or their brokerage. If that sounds daunting, don’t worry—it’s all about ensuring your agent can focus on giving you the best service possible.
Compensation: Traditionally, the seller pays both agents’ commissions. However, that’s not guaranteed, and you may need to negotiate or contribute toward your agent’s commission if the seller doesn’t cover it. Your lender can help you understand financing options for this. More on that later.
Property Specifications: This section lays out what you’re looking for in a home—such as price range, neighborhood, and type of property. It’s a way to ensure your agent knows exactly what you need and keeps their searches within your criteria.
Agent Duties: Your agreement will outline your agent’s responsibilities—from finding and showing homes to handling offers, negotiating, and following through until closing. This is where you set the tone for communication and what you expect from each other.
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At first you might wonder why you should sign this agreement. Isn’t it just another formality? It’s much more than that—it’s a crucial step to ensure that you and your real estate agent are aligned. Here’s why it benefits you:
But here’s the good news: you don’t have to figure this out alone. Your lender is a key player in helping you understand all your financing options, even before you sign the Exclusive Buyer-Broker Agreement. By working with your lender early in the process, you can get a clearer picture of how your financing could work—including how your agent’s commission might be covered.
We know that paying your agent’s commission can feel like one more possible daunting cost in an already expensive process. When you’re juggling earnest money deposits, down payments, and closing costs, the idea of covering one more fee might add another layer of stress—especially with a challenging housing market.
For many buyers, the ideal scenario is having the seller pay your agent’s commission. This can be a major relief. Depending on the market and the specific property, seller concessions—or contributions from other interested parties like builders, agents, or lenders—could cover your agent’s fees, leaving you with fewer out-of-pocket expenses.
Don’t worry, you’ve got options. If you do need to cover agent commissions, don’t panic—your lender can help you explore options for managing this expense.
It’s important to have open discussions with your agent and lender to fully understand these options and decide what works best for you.
Your lender also plays a crucial role in building confidence with the seller’s agent. Throughout the homebuying process, your lender should be in close contact with the seller’s listing agent, making sure they know that you’re a serious and qualified buyer. This can go a long way in reassuring the seller that by accepting your offer, they’re choosing a buyer who’s financially stable and ready to close. When your financing is solid and your lender is advocating for you, sellers may be more inclined to assist with agent fees or other concessions to seal the deal.
When it comes down to it, a great buyer’s agent does far more than open doors. They’re your advocate, your expert, and your negotiator—someone who is there to help you make one of the biggest financial decisions of your life.
By signing an Exclusive Buyer-Broker Agreement, you’re ensuring that your agent is just as invested in your success as you are. You’re establishing trust, clarifying expectations, and ensuring that your interests are represented every step of the way.
Ultimately, the goal is to work together with your agent, lender, and other key players to make sure you’re set up for success—both financially and emotionally—as you navigate the homebuying journey.
Reach out with any questions, or to get started on your homebuying journey!
Please consult with the Loan Originator to discuss your options and to receive specific DPA information. You will need to apply for a first mortgage loan with NFM, Inc. in conjunction with any down payment assistance program. All information contained herein is subject to change at any time. A training class might be required. All DPA programs require to apply for a 1st and 2nd mortgage. Equal Housing Lender. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice.
If you’re ready to sell or buy a home, you will need a competent real estate agent to guide you through the process. With so many agents out there, how do you know which one will be the best for you? Much like dating, you may have to try out different people to find an agent who “clicks” with you. Read on to learn how you can find a good match.
Most real estate agents will have an online presence in some way, whether they have a profile on their realty page or are active on social media. Read the ratings of several agents who pique your interest. If the reviews are generally positive, that’s a strong indication that they have the skillset of a strong salesperson. Searching for agents on real estate sites is a quick and easy way to pinpoint local representatives and to request more information on their services. Some reputable sites to begin your search include Realtor.com and Zillow.
Your friends and family members may be the best source for getting recommendations on which agent to choose. There is nothing more valuable than a word-of-mouth appraisal, and a real-life referral will give you more detail than any online review can. Other agents are also a rich source for referrals. If you’re interested in a niche market or are moving to an unfamiliar area, contact your previous agent and see what connections they have.
As a client, you have every right to interview potential agents to find out more about what they have to offer. It’s wise to interview at least three to build a pool of candidates. Being able to meet face-to-face will allow you to ask detailed questions about their experience and get a feel for their personality. Make sure you discuss how they usually communicate with clients; an agent that primarily emails might not work for you if you prefer to text. Additionally, feel free to ask for and follow up with their references. During the buying and selling process, you will be frequently interacting with your agent, so your compatibility with them should not be overlooked.
Another good way to meet real estate agents is to attend open houses. Going to open house events will allow you to assess how the agent interacts with potential buyers and how knowledgeable they are about the house they’re showing. You’ll be able to see them in action and decide whether you would want to work with that person. Many people find their next agent at an open house, so give it a try!
You don’t have to feel overwhelmed or lost when trying to find a real estate agent. There are several ways to weed out those who might not be a good fit for you, though you will need to do some research to discover whose personality and expertise will fit your needs. A reliable agent is indispensable regardless of whether you are buying or selling; you’ll be glad to have a consultant by your side.
If you have any questions or want more information about finding the right real estate agent, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying or selling process, click here to get started!
New Year’s is an ideal time to make resolutions to hit the gym, eat healthier, and make better choices. For many homeowners, the process of making their home marketable can feel overwhelming, and the prep stage often gets put on the backburner. Why not resolve to make 2020 the year to get your home ready to go to market? Here are some ideas to get you started.
A clean home is a happy home! Use the new year as an excuse to really give your home a deep clean and get rid of unnecessary items. When your home looks clean, it gives a positive impression that you take care of your property. Along with eliminating your home’s dirt and grime, take a moment to go through your belongings and get rid of things you don’t need anymore. Try starting with one room and sift through it thoroughly. Beginning the cleaning process now will not only make your house less cluttered, but will also reduce the amount of packing to be done once your home is sold.
Despite the popularity of house flipping reality shows, many people will not be attracted to homes that need heavy repairs or upgrades. A home that needs major fixes means the buyer will have to invest even more money into the purchase, and that can make a sale less likely to happen. If you needed another reason to get problem areas fixed, improving utility issues can increase your home equity. Take action to get everything in your home in working order before it opens to prospective buyers.
The exterior of your home is the first thing buyers will see when your home is on the market. If they aren’t intrigued by the outside, they may not want to look at the inside, either. You don’t need to do any fancy landscaping, simply mowing the lawn and trimming overgrown vegetation can do wonders. Additionally, consider giving your house a fresh coat of paint if it’s looking faded.
Before you officially declare your home for sale, it’s important to find a realtor who understands your needs and can help you get the best price for your home. An experienced agent will be able to guide you through the selling stage and know how to market your home. You may have to try out a few agents before you find one that’s a good fit for your situation, but having a competent agent is well worth the search.
Figuring out how much your house is worth and how much you could potentially make from a sale can be a bit confusing. Work with your agent to perform a competitive market analysis to get an estimate of your home’s value. Once you have an idea of its value, you and your agent can discuss an ideal selling price. Finding that sweet spot for your asking price will help optimize future profits and attract buyers.
Don’t feel like you need to fulfill all these resolutions at once. Start with one and make it your goal to work your way through them. In no time, your home will be ready to show off to prospective buyers. What better way to start the new year than to make your home the best it can be!
If you have any questions or want more information about the home selling process, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!
If you’re looking to buy a new home, you may have considered purchasing a brand-new home, rather than one that has already been built. There are many benefits to buying a new construction home, but there are also many factors to consider when you are making your choice. If you are looking to buy a new home, these tips can help you make the right home purchase decision for you.
Buying a new construction home can be a great investment. Your home’s design and layout will be new and up-to-date, and you will have some say in the home’s design, the fixtures, and the overall look of the house, to help make it more “yours.” But it’s important to make sure that you know everything associated with buying a new home before you make the decision. If you have more questions about buying a new construction home, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!
Last week, we talked about the second step in the home purchase process: choosing your loan type. Once you and your lender have determined the type of loan that will best suit your needs, the next step is to begin your home search. This may be the most exciting part of the process, and it can be easy to get caught up in that excitement. It’s important to make this decision carefully, consider your options, and to work with knowledgeable professionals who can help you make the best choice.
Choose the Right Real Estate Agent
Your real estate agent will be your guide through your home search, so he or she should be someone that you can trust. Hire a Realtor who takes time to understand your needs and to explain anything that is unclear. The right agent will help you enter the process prepared and confident.
“It’s very important to work with a real estate agent who first consults with you to find out your needs,” says David Bonanno, California Branch Manager with NFM Lending. “Home buyers are our lifeblood and who we serve. We have to know what their wants, needs, and budget are.”
For more tips on choosing a real estate agent, click here.
Choosing a Home
There are many factors to consider when looking for a home. Plan carefully and talk to your real estate agent about the following things before beginning your home search:
“Everyone thinks buying new is the best way to go. What they do not realize is all the money that will be spent on the yard, light fixtures, window coverings—things that may not be included in the purchase of the home,” says David. He recommends that buyers interested in purchasing a newly built home keep in mind the extra costs associated with this kind of purchase.
Other things to keep in mind when searching for a home are your short- and long-term goals. David suggests thinking about how long you plan to live in the area, and whether you will need room to grow as your family grows. Buying a new home is an investment in your future, so it’s important to have your future in mind when you are choosing your home.
Once you’ve found the right home, you will work with your real estate agent to make an offer on the home and sign a contract. From there, you will move onto the next step to purchasing a new home: applying for your home loan.
If you have any questions about searching for a home, contact one of our licensed mortgage professionals. If you are ready to start the home buying process, click here to get started!