Why Do I Need a Buyer Brokerage Agreement?

In the DC, Maryland, and Virginia real estate markets, it has been a requirement for agents to enter into a Buyer Brokerage Agreement when working with a real estate agent or broker. This agreement was signed before viewing properties or during a substantial conversation about real estate representation with potential clients. New guidelines from the NAR settlement now require that the Buyer Brokerage Agreement be signed prior to touring properties with a real estate agent. The purpose of this agreement is to clearly communicate expectations about the relationship between you and your agent, as well as to outline how your agent will be compensated.

What Are the New Guidelines?

The National Association of Realtors (NAR) has entered into a settlement agreement (NAR Settlement) that mandates changes impacting every buyer and seller of real estate. The NAR Settlement became effective on August 17, 2024, and requires modifications to the Buyer Brokerage Agreement.

Here are a few key changes:

As a buyer, you have always been responsible for paying your broker, often handled partially or fully through the listing agent's offer to pay the buyer broker via the Multiple Listing System (MLS). However, the NAR Settlement no longer allows direct payment from the Listing Broker to the Buyer Broker. As of August 14, 2024, we no longer have visibility to the compensation that the seller of a property may be offering to a buyer’s broker in the MLS.

The amount of compensation for the buyer broker will be agreed upon and stated in the Buyer Brokerage Agreement. While you will ultimately be responsible for this amount, your agent, with your permission, will be able to negotiate all or part of this compensation amount into your sales agreement with the seller. The Buyer Broker may not receive more compensation than what is specified in the Buyer Brokerage Agreement.

For more information, visit: What the NAR Settlement Means for Home Buyers and Sellers.

Will I Still Have the Option for the Seller to Pay This Compensation?

Yes. Sellers can still choose to offer compensation. The main change is that this offer of compensation cannot be advertised in the Multiple Listing System (MLS). Our goal will be to secure as much of the compensation as possible from the seller in the sales contract offer and negotiation process to offset your obligation to pay your Buyer Broker as outlined in the Buyer Brokerage Agreement.

Is It Possible to Ask My Agent to Only See Listings That Offer Compensation?

Yes, you can request to view only properties that offer compensation if that is important to you. However, please understand that many sellers and their agents may not state upfront whether they will offer any compensation for the Buyer Broker and will instead ask your Buyer Broker to include the request as part of any offer. Therefore, if you only want to see properties where the seller explicitly offers compensation for your Buyer Broker, this may significantly limit the number of available properties to include properties in which the agent does not have permission to disclose compensation upfront.

Compensation is Negotiable. What are Types of Compensation?

You and your agent will agree upon a compensation level that is appropriate based on the services that will be provided during the representation process. Types of compensation include a percentage of the sales price of the home and/or a flat fee amount.

Why Choose KW Metro Center & Rick Bosl?

By choosing to work with KW Metro Center & Rick Bosl, you will have the backing of Keller Williams Realty International, one of the largest real estate companies in the world. KW Metro Center has a broad network of agents to collaborate with, learn from, and provide the highest level of service to our clients. KW Metro Center is committed to staying at the forefront of industry changes, best practices, and ethics.

Please note that if you are interviewing other agents and they are not following the same protocol, they are not in compliance with the new regulations set by the NAR settlement agreement.