The New Rules of Home Buying: How the NAR Settlement Changes Your Broker Agreement
Navigate the new buyer-broker agreement with confidence. Discover what rights you have as a homebuyer, how to negotiate terms, and what protection the NAR settlement gives you in your homebuying journey.
Big Changes in Home Buying
Big changes are coming to how you work with real estate agents! Starting with the NAR settlement, you'll need to sign something called a buyer agreement before house hunting with an agent. Don't worry—we'll walk you through everything you need to know in simple terms.
What's New?
Remember how you used to just call up an agent and go look at houses? Well, now you'll need to put your partnership in writing first. Think of it like making your teamwork "official" before starting your house hunt.
The Basics: What's a Buyer Agreement?
It's basically a piece of paper that spells out two main things:
What your agent will do for you
How they'll get paid
Why is This Happening?
The National Association of REALTORS® (the big organization that many real estate agents belong to) is changing the rules. They want to make everything clearer for both buyers and agents. If you're new to real estate agreements, check out Understanding Buyer Agent Agreements for more details.
Your Rights as a Homebuyer
Here's what you should know:
You can negotiate everything in the agreement
You get to decide how long it lasts
You can talk about how your agent gets paid
Nothing is set in stone until you're happy with it
When Do You Need to Sign?
Only when you're ready to actually look at houses with an agent. Just checking out open houses on your own? No signature needed!
Understanding the Financial Side
Money Talk: Who Pays What?
Don't stress; you won't necessarily have to pay your agent directly. In most cases, you can still work it out so the home seller covers your agent's fee. It's all part of the deal-making process! For more insight into this process, read Financing Your Home Purchase: What You Need to Know.
The Benefits of the New Agreement
This agreement actually protects you! It makes sure:
You know exactly what services you're getting
There are no surprise fees
Your agent is committed to helping you
Everything is clear from the start
Making Changes and Moving Forward
Can You Change Your Mind?
Yes! If things aren't working out, you can:
Talk to your agent about changing the agreement
End the agreement if both you and the agent agree
Make adjustments along the way
Frequently Asked Questions (FAQs)
Q: Does a buyer-broker agreement mean I have to stick with one agent even if I'm unhappy?
No, the agreement typically includes terms for termination. If you're unhappy with your agent's service, you can usually end the agreement through mutual consent or according to the termination clauses outlined in the contract.
Q: What happens if I find a house on my own without my agent's help?
Even if you find a property independently, your buyer-broker agreement may still require you to work through your agent. This is why it's important to read and negotiate these terms upfront. Your agreement should clearly spell out what happens in these situations.
Q: Can I work with multiple real estate agents at the same time?
Generally, exclusive buyer-broker agreements require you to work with just one agent. However, you can negotiate non-exclusive agreements that allow you to work with multiple agents. Just be upfront about your preferences when discussing the agreement terms. If you're unsure about negotiating these terms, read How to Negotiate Your Real Estate Deal for practical tips.
Q: What if I sign an agreement but then decide not to buy a home?
Most agreements have an expiration date, and some include terms for when you decide not to purchase. Review these clauses carefully before signing, and discuss with your agent what happens if you put your home search on hold or decide not to buy.
Q: Are commission rates fixed in the buyer-broker agreement?
No, commission rates are always negotiable. The NAR settlement specifically emphasizes this point. You can discuss different compensation structures with your agent before signing the agreement, and everything should be clearly documented in writing.
The Bottom Line
While this might seem like extra paperwork, it's actually a good thing. It's like having a game plan before you start your house hunt. Your agent will walk you through everything, and you'll feel more confident knowing exactly what to expect. If you’re preparing for your first home purchase, don’t miss our post on Top 10 Tips for First-Time Homebuyers.
Ready to Start?
Just remember: read everything carefully, ask questions if you're unsure, and don't sign until you're comfortable. Your future home is waiting! If you’re also considering home inspections, make sure to check out The Importance of Home Inspections for valuable advice.
