A Buyers Agreement is now Mandatory

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  • A Buyers Agreement is now Mandatory

No, that is not a clickbait title. As part of the recent NAR Settlement that made national headlines, if you are a homebuyer who wants to look at homes with a realtor, you will have to sign a buyer’s agreement.

No more casually going out to see a home with a realtor without signing on the dotted line first. No more casually dating and bouncing around between different agents. Nope, those days are over.

First, some basics. What’s a buyer’s agreement. It’s a contract that says that you agree to work exclusively with a realtor for a certain period of time, usually anywhere from 3-6 months.

Different states, brokerages, and real estate agents have variations on the terms, lengths, fees etc…but the key point to remember is that it is no longer optional to sign this buyer’s agreement – it’s mandatory.

Therefore, you better be sure that the realtor you commit to is someone you trust to help you on your homebuying journey. It is certainly not impossible to get out of this contract, but it is a pain. Breaking up with someone is never fun.

No More Dating

Here’s a message we get from some people contacting us.

“Hey, we’re visiting this city next week for 2-3 days and want a realtor to show us a few homes.”

Let’s be honest, 9 times out 10, this person didn’t bother to apply for a home loan in that state, is not sure if they even like that particular city, and even if they do, won’t move there for another 6+ months.

cartoon pic of overwork black realtor

Is it really fair to ask an agent to spend hours of their time with you when they could be spending that time with their family and friends? What if it were the other way around? How would you feel if someone asked you to put together a presentation, a project plan, write a report etc…when they may not even end up using your work?

Of course, this is part of the game and realtors understand this. But good realtors, the ones you want on your side, value their time.

Are you serious? Ok, then take the time to apply for a home loan to see if you qualify, and sign this buyer’s agreement. It’s no longer a one way commitment. It goes both ways now.

Separate the Wheat from the Chaff

This will result in fewer buyers and fewer buyers’ agents. Alot of agents suck. We know this, which is part of the reason why we started this website to connect people with excellent realtors we personally vet. However, the general public may not be able to tell the difference between the good agents and the not-so-good ones.

Let’s say you’re a serious buyer. You wouldn’t just hire anyone without asking a few important questions.

  • Are you a full time agent or part time?
  • Can I speak to past clients or see reviews?
  • How much experience do you have helping people like me do…X,Y,Z?
cartoon illustration interviewing african american realtor

If an agent can’t confidently and credibly answer these basic questions, you should move on to the next one. If they can, ok, it may make sense to commit to them by signing a buyer’s agreement/contract.

Again, this is a must. Gone are the days where you see some pretty house online on Zillow, and then ask an agent last minute to meet you there. You must commit, or go unrepresented.

If you don’t want to use an agent, that’s fine. This has always been, and will always be an option. Many people online seem to think they can do it on their own. We get it. You can stop yelling in the comments section about it 🙂

It is absolutely true that a small percentage of the population can conduct a successful real estate transaction on their own. However, most people who do so will leave money on the table. They will go unrepresented and end up learning an expensive lesson.

In short, buyer’s agents who can’t prove their worth to a potential buyer will slowly fade away. Buyers who won’t commit to an agent, and the homebuying process in earnest, will also fade away until they’re actually ready.

The result will be a smaller, transformed market of serious buyers and their agents, along with serious seller sand their agents, which is probably a healthier real estate market in the long term.