Everything You Need to Know Before You Sign
If you're thinking about purchasing a home, chances are you'll be working with a real estate agent to help you through the home buying process. But before touring homes or submitting offers, there’s an important document you should know about and that is the buyers agreement.
Whether you're a first-time buyer or already a homeowner, understanding the buyer's contract and knowing your rights under a real estate agent agreement is very important. We’ll walk you through what it is, why it matters, and what to watch for before you sign.
What Is a Buyers Agreement in Real Estate?
A buyers agreement in real estate is a legally binding contract between a homebuyer and a real estate agent or brokerage. It outlines the scope of services the agent will provide and establishes that the agent will represent the buyer in a home purchase.
It typically includes:
- The duration of the agreement
- Agent duties and responsibilities
- Buyer’s obligations
- Commission details
- Geographic area of service
- Terms for terminating the contract
The main purpose? To provide the scope of work and protect both parties.
Why Do You Need a Buyers Agreement for a Home Purchase?
A buyers agreement sets the foundation for a smooth, trusting working relationship.This agreement helps:
- Define representation: It confirms that the agent represents you andnot the seller.
- Outlines responsibilities: You’ll know exactly what services to expect (home searches, negotiation, contract prep, etc.).
- Avoids confusion: With multiple parties involved in home buying, having a clear real estate agent agreement helps prevent miscommunication.
- Protects you legally: If anything goes wrong, having the agreement can offer legal clarity and protection.
Key Items of a Buyers Agreement
Not all buyers contracts are the same:
1. Exclusive vs. Non-Exclusive Agreements
- Exclusive buyer agreement: You agree to work solely with one agent during the term.
- Non-exclusive buyer agreement: You can work with multiple agents, but only the one who helps you close a deal earns the commission.
2. Commission Terms
Typically, the buyers agreement outlines how the agent will be compensated. While the seller often pays the buyer's agent commission, some agreements include language allowing the agent to collect a fee if the seller doesn’t offer one.
3. Duration
The agreement will have a start and end date. Read this carefully because some agents will ask for six months to a year.
4. Cancellation Policy
Make sure there’s a clause that allows you to terminate the real estate agent agreement if you're unsatisfied.
Can You Buy a Home Without a Buyers Agreement?
Yes, but it comes with risks. Without a buyers agreement, a real estate agent may not be legally obligated to prioritize your needs. They might represent the seller or act as a dual agent, which can create a conflict of interest.
By signing a buyers contract for a home purchase, you establish your agent's fiduciary duty to you. This means they are legally obligated to act in your best interest by advising you, negotiating, and protecting your confidential information.
What to Ask Before Signing a Buyers Agreement
Before entering any legal agreement, you want to be informed. Ask your agent the following:
- How long is the contract for?
- Can I cancel if I’m unhappy?
- What services will you provide under this agreement?
- Will I owe a commission if a seller doesn’t cover it?
- Will you represent only me, or will you also represent sellers?
These questions will help you feel confident about the buyers agreement and avoid surprises later.
Protect Yourself with a Buyers Agreement
Signing a buyers agreement may feel intimidating, but it’s actually one of the smartest moves you can make as a homebuyer. It creates a clear, professional relationship and ensures that your real estate agent is working in your best interest and not the seller's.
Before you sign, make sure you read the terms carefully, understand the commission structure, and choose an agent you trust.
Quick Recap: FAQs About Buyers Agreements
Q: What is a buyers agreement in real estate?
A legally binding contract between you and your agent outlining services, commission, and representation.
Q: Do I have to sign a buyers agreement to buy a home?
No, but without it, your agent may not be legally required to act in your best interest.
Q: What’s the difference between a buyers agreement and a listing agreement?
A buyers agreement is for homebuyers; a listing agreement is for home sellers.
Q: Can I cancel a buyers agreement?
Yes, depending on the terms. Most contracts include a termination clause—always check first.
Need Help Navigating a Buyers Agreement?
If you're starting your home-buying journey and want guidance on choosing the right real estate agent, reach out to the ML Team. We believe in honesty, transparency, and making sure you understand your rights before signing anything. We’ll walk you through the buyers agreement together and then go find you the perfect home