You may have heard about recent changes to the buyer’s agreement. Last year, a court ruling involving the National Association of REALTORS® (NAR) led to new federal requirements for how real estate agents work with homebuyers. These changes went live across the country in August 2024.  

If you’re not a fan of change, don’t worry. These shifts put more power in your hands by making everything more transparent. Now everyone can see what they’re paying for and where there’s wiggle room to negotiate. 

Still have questions? Below, we’ve answered some of the most common questions about buyer’s agreements so you know exactly what to expect when you’re ready to jump into the market. 

Buyer’s Agreement FAQs

What is a buyer’s agreement? 

A buyer’s agreement—also known as a buyer agency agreement or buyer representation agreement—is your partnership arrangement with your real estate agent. It’s like a roadmap for your home-buying journey that spells out how you’ll work together to find your perfect home. This written contract outlines what you can expect from your REALTOR® and what they’ll need from you. 

The agreement covers important details like how long you’ll work together, how your agent will get compensated for their expertise, and what specific services they’ll provide as they help you search for, negotiate, and purchase your new home. The buyer’s agreement ensures everyone is on the same page from day one. 

Before the law changed last year, many states already had their own laws around buyer agency agreements.

Now, all states require a signed buyer-broker agreement before an agent can show a property. 

What’s the difference between an exclusive vs. non-exclusive buyer agency agreement? 

There are two types of buyer agency agreements: exclusive and non-exclusive. 

Signing an exclusive agreement is like ‘going steady’ with your real estate agent. When you sign this agreement, you’re committing to working solely with that agent during your home search. They’ll dedicate their resources, time, and expertise to helping you find the right home. Your REALTOR® can invest more deeply in understanding your needs and advocating for your interests when you’ve committed to working with them. 

A non-exclusive agreement is more like casual dating. It allows you to work with multiple REALTORS® from different brokerages at the same time. One downside to this type of agreement is that agents may be hesitant to invest their resources and attention in less committed buyers. On the other hand, a non-exclusive agreement can help you get a feel for working with an agent before you commit.

Why is a buyer’s agreement important? 

Just like any good relationship, house hunting goes more smoothly when everyone knows what to expect—and that’s exactly what a buyer’s agreement gives you. It puts in writing what you can expect from your agent and what your agent expects from you. 

The buyer’s agreement also protects your interests as a buyer. When you have a signed agreement, your REALTOR® is your dedicated advocate. They’re 100% in your corner, committed to fighting for your best interests every step of the way. 

The one exception is if your buying agent ends up selling their own listing. When an agent represents both buyer and seller, this is called dual agency. While dual agency is legal in most states (including Iowa), it’s often risky for buyers because it creates conflicts of interest. 

With the recent industry changes, buyer’s agreements are even more important. They outline how your agent will get paid, eliminating confusion about who pays for what services. You’ll know what value you’re receiving and what to expect financially when you get to the closing table. 

At Urban Acres, we view this document as the foundation of trust. It demonstrates our commitment to you and gives you the confidence of knowing we’re in this together, from start to finish. 

Can I tour a home without a buyer’s agreement? 

Federal law now requires REALTORS® to have a signed buyer’s agreement in hand before showing a home. This isn’t about limiting your options, but about defining our professional relationship. 

If you’re worried about signing an agreement, we’re always open to discussing terms that work for you, whether that’s an exclusive or non-exclusive agreement.

Some buyers prefer starting with a short-term agreement or including specific termination clauses that give them more flexibility.

Either way, we want to help you find the arrangement that protects your interests while allowing us to provide our best service. Remember, the goal of the buyer’s agreement is to guarantee you have a committed advocate as you navigate one of life’s biggest purchases.

Do I have to sign a buyer’s agreement at an open house? 

Open houses are an exception to the rule. Sellers’ agents host them to give homebuyers casual opportunities to explore their properties. Attending an open house is like window shopping for your dream home.

When you visit an open house, a REALTOR® is there to answer your questions and determine if the home is a good fit for your needs. You’re free to tour the home and gather information without signing paperwork on the spot. 

If you’re interested in working with an agent to make an offer on that home or want to continue your search with professional guidance, you’ll need to sign an agreement. But we always want that conversation to take place in a comfortable setting when you’ve had time to review the terms, ask questions, and make an informed decision. That’s probably not when you’re drooling over the walk-in closets and checking out the finished basement at an open house. 

Who signs the buyer’s agreement? 

The short answer: anyone whose name might appear on the title of the home. Let’s say you’re buying a home with your spouse. You’ll both need to sign. Are you a parent buying a property for your child? You’ll need two signatures. Got an incredibly generous friend buying you a home (lucky you!)? They’ll need to sign the agreement, too. 

Even if you’re not sure who will be on the final title when the purchase agreement gets written, sign it anyway. With the right signatures on your buyer’s agreement, you’ll have peace of mind knowing everyone’s interests are looked after from day one.

What questions should I ask before signing a buyer’s agreement? 

Before you put pen to paper, you should always ask questions. And as with any formal agreement, there’s no such thing as a dumb question. 

Here are some good questions to ask your REALTOR® about the buyer’s agreement: 

• How long does this agreement last? Find out how long you’re expected to commit. 

• Is this an exclusive or non-exclusive agreement? Make sure you understand whether you’re committing to work only with one agent or if you can work with multiple agents at the same time. 

• How will you be compensated for your services? Ask how and when your agent will get paid, whether that’s a percentage of the purchase price, a flat fee, or another arrangement.

• What specific services are included in this agreement? Your agent should outline everything they’ll do for you, from property searches to negotiation and closing support. 

• Can I terminate this agreement if needed, and how? If circumstances change or the relationship isn’t going as expected, find out if there’s a process for ending the agreement. 

• Are there additional costs or fees I should know about? Clarify that there are no unexpected costs beyond the agent’s commission. 

• How will we communicate throughout the process? Decide how often and through what methods your agent will keep you updated. 

• Can you walk me through each section of this agreement in plain language? Your agent should be willing and able to explain every clause without using confusing jargon—and if they can’t, that’s a major red flag. 

How long does a buyer’s agreement last? 

Most buyer’s agreements last about six months—long enough to find your dream home without feeling locked in forever. Some agents might ask for up to a year, but that’s the maximum time these agreements can last. 

At Urban Acres, we’re flexible and happy to start with a shorter timeframe if that makes you feel more comfortable. 

Can you back out of a buyer’s agreement? 

It depends on the scenario and what’s written into your agreement. Most buyer’s agreements include termination clauses that outline exactly how and under what circumstances you can end the relationship. 

As agents, we understand that sometimes personalities or working styles just don’t align. If both you and your agent agree the relationship isn’t working out, you can often mutually agree to end the relationship early. 

You may also have grounds to end the agreement if your agent isn’t fulfilling their promised duties or meeting your reasonable expectations. 

How does a buyer’s agreement work with a new construction home? 

The buyer’s agreement for a new construction home looks very similar to an existing home buyer’s agreement. The only major differences are timeline—the new construction timeline is often much longer than purchasing an existing home—and compensation. Many builders factor agent commissions into their pricing structures, but they won’t reduce the price if you don’t have an agent, so you’d be giving up valuable expertise and advocacy for no savings. 

Your buyer’s agreement should also specify what services your REALTOR® will provide during the process. Beyond helping you find the right floor plan, your agent can review builder contracts (which differ significantly from resale home contracts), attend inspections at various phases, and advocate on your behalf if issues arise. 

Remember, while the builder’s representative may be friendly and helpful, they work for the builder, not you as the buyer.

Is agent compensation negotiable? 

After last year’s changes, you now have the green light to discuss and negotiate how your agent gets paid. This is a major shift from when compensation was included in the listing agreement and MLS. 

The new rules also mean that buyer’s agent compensation is no longer automatically offered through the MLS. Some sellers may offer compensation to buyer’s agents as a tool for attracting more buyers, but if they don’t, you’ll need to factor your agent’s compensation into your overall home buying budget. 

But keep in mind that even if you have to cover your agent’s compensation, there are creative ways to help you avoid paying it all out of pocket. This can include negotiating seller concessions or rolling compensation into financing. 

You have the right to discuss and negotiate your agent’s compensation before signing a buyer’s agreement.

As your real estate agent, we want to get everything on the table and discuss compensation so there are no surprises at closing. 

When is the agent commission paid? 

Agents get paid at closing once all paperwork is signed and the home is officially yours. 

Under the new rules, there are a few possible scenarios for buyer’s agent compensation. Sellers may still offer to pay the buyer’s agent commission as part of the negotiation. This payment would occur at closing from the seller’s proceeds. 

If you’re responsible for your agent’s compensation, you typically pay at closing. Some lenders may allow you to include this in your financing, or you might pay it as part of your closing costs. In some cases, the buyer and seller may split the compensation so each party contributes a portion at closing.

How do I find an agent to work with under these new rules? 

Finding the right real estate agent under the new rules is the same as before. It’s all about finding someone who’s a good fit for your needs, communicates well, and brings the expertise you need. 

Start with referrals from friends, family, or colleagues who’ve recently bought homes. Ask them about their experience, including how their agent handled the new buyer’s agreement process. Visit open houses and interview potential REALTORS®.  Then do your research online. Review agent profiles and read client testimonials. 

After you find an agent you want to work with, have an open conversation about their services and compensation. Be sure to ask about the different compensation structures they offer, what services they include, their experience with properties in your price range, and how they navigate new buyer’s agreement requirements. 

Don’t feel pressured to sign an agreement at the first meeting. We encourage you to meet multiple agents and take time to review agreement terms before you make a decision. With these new changes, you have more power than ever to negotiate the terms that work for you. 

The Rules Have Changed, But Our Agents Still Have Your Back 

The new changes to the buyer’s agreement might seem like a lot to take in at first. But here’s the good news: They give you more control when making one of the biggest decisions of your life. 

At Urban Acres, we’re excited about this shift! We’ve always believed in putting our clients first, and now the rules make that easier. Our team of agents knows the Iowa City area inside and out, and we’ve built relationships with everyone from lenders to inspectors, so we always have someone to call on to make the buying process easier.

Whether you’re a first-time buyer or a seasoned buyer navigating the new rules for the first time, we’re here to help you make sense of it all. 

Reach out and let’s talk about what you’re looking for in your new home!