Dear MoveCenter Experts: Why is my transferee’s Realtor asking them to sign a Buyer Agreement? Is it true they must sign it before the Realtor can show them homes on the MLS?
Yes, it is. After the 2024 National Association of Realtors (NAR) lawsuit settlement, all buyers must sign a Buyer Agency and Compensation Agreement (Buyer Agency Agreement) before working together. These agreements address representation, compensation and responsibilities of the buyer’s broker/agent.
Some key points of the Buyer Agency Agreement:
- The Buyer Agency Agreement formally establishes the relationship between the buyer and their chosen agent. MoveCenter advises that the term should not exceed 90 days and short-term Buyers Agency Agreements (1-2 weeks) may be used in some areas.
- The buyer is responsible for paying their broker’s compensation if the seller does not agree to pay it, as detailed in the agreement. Commissions have always been negotiable and this amount may be renegotiated to a lower amount later, but it can never be raised.
- The compensation paid to the buyer’s broker can be negotiated with the seller as part of the purchase offer. So, while the buyer is ultimately responsible for paying their broker’s compensation, it may ultimately be paid by the seller or the buyer or it could be split.
- The Buyer Agency Agreement will note a Protection Period (tail)—a specific amount of time after the agreement terminates during which the buyer’s broker may be due a commission for homes they showed the buyer while the agreement was in effect. This is to prevent people from using the services of one broker, then finding a home, hiring a different broker for less, and purchasing that home with them instead.
- The mandatory Broker Agency Agreement makes their representation and compensation more transparent. The buyer’s broker may pay a referral fee based on the commission paid to one or more parties, including the relocation management company and/or the transferee’s employer.
Great buyer brokers are invaluable, especially for your employees moving to new areas, and MoveCenter will introduce them to the most qualified and experienced brokers. Our Relocation Consultants will also take the time to explain the Buyer Broker Agreement, as all potential buyers will need to sign one to work with any broker to view homes and prepare and present written offers.
There’s lots to unpack with this topic and the real estate market is still adjusting – reach out to MoveCenter to discuss further implications of the Buyer Agency and Compensation Agreement and how we can help your transferring employees find the perfect home.
