Buyer Agent Agreement

A Buyer Agent Agreement in the United States sets out the rights, duties and consideration binding the parties to it.

The legal foundation for buyer agency in the United States comes from state real estate licensing laws and the common law of agency. All 50 states require real estate agents to be licensed under state-specific licensing statutes (such as the California Real Estate Law at Business and Professions Code § 10000 et seq., the Texas Real Estate License Act at Texas Occupations Code Chapter 1101, and the New York Real Property Law § 440 et seq.) and to comply with state agency disclosure requirements. The law of agency, as codified in the Restatement (Third) of Agency (adopted by the American Law Institute in 2006), establishes the fiduciary duties that agents owe their principals — including the duties of loyalty, care, and disclosure.

The NAR settlement of March 2024 (Sitzer/Burnett et al. v. National Association of Realtors et al., Case No. 4:19-cv-00332, US District Court for the Western District of Missouri) and the associated NAR practice changes, effective August 17, 2024, require NAR-member agents and MLS participants to: (1) execute a written buyer agreement before touring homes with a buyer; (2) include in the agreement a specific, conspicuous compensation amount (dollar figure, percentage, or formula) that cannot exceed what the buyer's agent will receive from any source; and (3) not represent that the agent's services are 'free' or that the buyer has no obligation to pay the agent. These requirements apply to approximately 1.5 million NAR members who are Realtors and to brokers participating in the approximately 550 Realtor-affiliated Multiple Listing Services (MLS) across the US.

State-specific buyer agency requirements existed before the NAR changes in several states. North Carolina's Real Estate Commission rule 21 NCAC 58A .0104 has required written buyer agency agreements since 1996. Florida Statute § 475.272 requires disclosure of agency relationships and is interpreted to require written agreements. Massachusetts General Laws Chapter 112, § 87AAA, requires written disclosure of buyer agency. The NAR settlement effectively brought the entire NAR membership up to the standards that forward-thinking states had already adopted.

For dual agency — situations where the same agent or brokerage represents both the buyer and the seller — most states require written informed consent from both parties before the dual agency can proceed. California Business and Professions Code § 2079.17 requires written disclosure of dual agency; New York Real Property Law § 443 requires agents to disclose their agency relationship at first substantive contact. The Buyer Agent Agreement should specify whether the buyer consents in advance to dual agency and under what conditions.

A Buyer Agent Agreement is needed in the United States whenever a buyer engages a licensed real estate agent to assist in finding and purchasing a property — and since August 17, 2024, is required before any NAR-member agent can show properties to a buyer.

First-time homebuyers engaging a real estate agent in any US market need a Buyer Agent Agreement to formalize their working relationship and confirm the compensation terms before the agent begins searching for properties, scheduling showings, or submitting offers on the buyer's behalf. The written agreement ensures both buyer and agent have aligned expectations about the geographic scope of the search, the types of properties the agent will show, and how long the representation will last.

Relocation purchasers who are moving to a new city or state and working with an agent recommended by their employer's relocation provider — such as Cartus, SIRVA, or Altair Global — need a Buyer Agent Agreement that specifies the relocation program's compensation requirements and any limitations on the agent's services imposed by the relocation company.

Investment property purchases require a Buyer Agent Agreement that clearly defines whether the agent is authorized to represent the buyer in identifying and negotiating multiple properties, in what geographic markets, and what the agent's compensation will be — since investment buyers may purchase multiple properties and the compensation structure for portfolio purchases may differ from single-family transactions.

New construction purchases, where a buyer uses a buyer's agent to represent them in negotiating with a builder (such as D.R. Horton, Lennar Corporation, PulteGroup, or NVR Inc.), require a Buyer Agent Agreement that addresses how the agent will be compensated (many builders pay buyer agent commissions directly), the agent's role in reviewing the builder's contract and new home warranty, and any exclusivity limitations.

Commercial real estate tenant representation, where a business engages a commercial real estate broker (a member of CCIM, SIOR, or NAR's REALTORS Commercial Alliance) to find and negotiate a lease or purchase of commercial space, requires a Buyer or Tenant Representation Agreement that is similar in structure to a residential Buyer Agent Agreement but addresses commercial-specific issues including lease vs. purchase options, LOI (letter of intent) negotiation, and due diligence coordination.

A complete Buyer Agent Agreement for a US real estate transaction must contain several essential elements to comply with NAR requirements, state licensing law, and the parties' reasonable expectations.

Party identification requires the full legal names of the buyer(s) and the real estate agent or brokerage. If a married couple or business partners are jointly purchasing, all buyers must sign. The agreement should identify the licensed broker (the agent's supervising broker) by name and license number, as the broker is the party legally responsible for the agent's conduct under state licensing law.

Scope of representation defines the geographic area (states, counties, cities, zip codes), property type (residential single-family, multi-family, condo, commercial, vacant land), and price range for which the agent is authorized to act. Clear scope definitions prevent ambiguity about whether a particular property or transaction falls within the agreement.

Agent's duties should enumerate the specific services the agent will provide: property searches and market analysis; scheduling and conducting property showings; advising on offer price and terms; drafting purchase offers and counteroffers; coordinating inspections, appraisals, and closing; and any other agreed services. The agreement should state that the agent owes fiduciary duties to the buyer, including loyalty, disclosure, confidentiality, and reasonable care.

Compensation clause is now the most heavily regulated element under the 2024 NAR rules. The agreement must state the buyer agent's compensation as a specific dollar amount, percentage of purchase price, or clearly defined formula. The clause must state whether the buyer or the seller (from proceeds) will pay the compensation, and must confirm that the agent will not receive compensation exceeding the agreed amount from any source. If the seller offers compensation that is less than the agreed buyer agent fee, the agreement should address whether the buyer will make up the shortfall.

Term and exclusivity provisions specify how long the agreement lasts (typically 30 to 180 days), whether the relationship is exclusive (buyer may not work with other agents during the term) or non-exclusive, and any properties that are specifically excluded from the agreement.

Dual agency disclosure and consent, where applicable, must meet state-specific requirements. Buyers should understand that consenting to dual agency in advance modifies the agent's fiduciary duties.

Termination rights allow either party to end the agreement under specified conditions: mutual written consent, buyer's material breach (e.g., working with another agent on an exclusive agreement), agent's material breach, or written notice with a specified notice period. Commission protection provisions specify the agent's right to compensation if the buyer purchases a property the agent introduced within a defined period after termination.

Governing law and dispute resolution provisions, referencing the applicable state's real estate licensing law and specifying mediation or arbitration as the dispute resolution mechanism (consistent with NAR's Code of Ethics and MLS rules), complete the agreement.