What You Should Know About The Buyer Agency Agreement
If you’re getting ready to buy a home, at some point, your Realtor will ask you to sign something called an Exclusive Right to Represent the Buyer – or the Buyer Agency Agreement! I get a lot of questions about this agreement, so let’s walk through the basics together!
What is the Buyer Agency Agreement?
In Virginia, a Realtor is legally obligated to represent the seller until you, the Buyer, officially sign a Buyer Agency Agreement. In fact under new NAR rules, agents can’t even show you homes until you’ve signed one!
This agreement simply formalizes that your Realtor is working for you – not the seller. It guarantees that your agent will be 100% on your side, protecting your interests, negotiating on your behalf, and keeping your information confidential. For example, they couldn’t tell a seller you’d be willing to pay more than your initial offer.
It also makes crystal clear to everyone involved in a transaction who is representing whom – no guessing games!
Key Parts of the Buyer Agency Agreement
Here’s what you’ll typically see in the agreement:
Length of Term
Usually the agreement lasts anywhere from 1 day, or 1 property, to several months, or even a year! It’s a two way commitment: if your agent is dedicated to helping you find your dream home, they’re asking for a little commitment from you too. For some buyers who may not be comfortable signing a long term agreement right away, you can choose to make the length of term for 1 day, 1 house, 1 weekend, or any other time frame agreeable to you and your Buyer Agent. But you need to have some time frame in the buyer agency agreement before you begin looking at houses!
Early Termination/Notice
If either party wants to end the agreement early, it is recommended that you and your Buyer Agent have a discussion to decide why the agreement should be terminated. If you need to terminate the agreement, then there is a Release of the Buyer Agency Agreement that should be signed by all parties.
Compensation
This section explains how your agent gets paid. With the recent changes, there is now no longer any guarantees that the seller will pay the Buyer Agent compensation you and your Buyer Agent have agreed to. The contract will allow you to request this to be paid by the seller; however, you and your Buyer Agent should discuss how the Buyer Agent compensation will be paid if the seller chooses not to pay it, or you choose not to request this to be paid by the seller (such as when you are in a multiple offer situation).
Dual and Designated Representation
This part covers who can show you properties:
Designated Representation means your agent can show you homes listed by their brokerage.
Dual Representation would mean your agent represents both the buyer and the seller – but I don’t do dual representation. You’ll choose whether to agree to designated representation in the agreement – and you can always revisit it when you’re ready to make an offer!
What Does A Buyer Agent Actually Do?
More than you might think! Sure, they help you find and tour homes, but that’s just the start. A great agent will:
- Search for homes (even ones not yet on the market)
- Walk you through every step of the process
- Connect you with trusted lenders (ones who’ve proven they can get deals done smoothly – no kickbacks involved)
- Help you craft strong offers with competitive pricing and terms
- Negotiate everything – not just price, but also inspections, appraisals, closing costs, rent backs, and more
- Manage deadlines and paperwork to keep you compliant with the contract
- Recommend inspectors, movers and more
- Attend your final walk through and settlement to make sure everything wraps up cleanly
Bottom line: your agent is your partner, advocate, negotiator, and guide through one of the biggest decisions of your life!
