The home-buying process has changed. Nationwide, as of January 1, 2025, buyers must have a signed representation agreement with their Realtor before they can tour a home.
Traditionally, buyers could view homes with a Realtor without committing to a formal working relationship. Under the new rule, a signed representation agreement is required before any showings can take place. This agreement helps create a clear, professional relationship between the buyer and the agent, and enhances transparency, strengthening the partnership between buyers and Realtors.
When signing a Buyer Representation Agreement, the buyer is making two key commitments:
- Exclusivity: The buyer agrees to work exclusively with the selected real estate agent for a specified period, which the buyer determines.
- Agent Compensation: The buyer acknowledges responsibility for their agent’s compensation.
The agent’s obligations to the buyer - from financial to ethical - have not changed; however, they are now a part of the written agreement.
I thought the Seller paid my Realtor’s commission?
As of January 2025, the agent’s commissions have been uncoupled. The seller signs a listing contract agreeing to pay their agent. The buyer now signs a representation contract agreeing to pay their agent.
Realtors know first-hand how difficult it is for buyers in today’s market. Mortgage interest rates have hit buyers hard, and they need to bring cash to the closing table for their down payment and closing costs. Very few buyers can add the buyer’s agent compensation to their “cash to close” amount.
Fortunately, in our local market this new rule does not necessarily mean the buyer pays out of pocket. In many transactions, the seller is willing to make concessions for the buyer’s agent as part of the deal. Everything’s negotiable, right? I discuss the various negotiation options with my clients.
What Does This Mean for You?
If you’re planning to buy a home, you’ll need to discuss and sign a representation agreement with your Realtor (Me!) before scheduling showings. Here’s how to navigate the process:
- Choose your Realtor carefully: Look for someone experienced, trustworthy, and knowledgeable about your market.
- Ask questions about the agreement: Make sure you understand the terms before signing.
- View it as a partnership: Your Realtor is your advocate, negotiator, and guide in what is likely one of your biggest financial decisions.
Let’s Get Started!
If you’re ready to take the next step toward homeownership, I’d be honored to guide you through the process. Let’s sit down, discuss your goals, and make sure you’re fully prepared to navigate today’s real estate market.
