10 Essentials Every Homebuyer Needs To Know About Buyer Broker Agreements
Before you put your name on a buyer agreement, you need to know what’s in it — and what’s missing.
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What’s On My Mind This Week: There are a lot consumers who still don’t understand buyer broker agreements.
In my latest Tracy Talks Real video, I continued my series called Buyer Broker Agreements - Navigate Them Like A Boss, with a look at 10 essential things to understand about these new agreements.
Spoiler alert! #4 is a biggie! Keep reading for the full discussion. 🏡💪
The Dirty Truth About Buyer Broker Agreements
Buyer Broker Agreements aka Buyer Agency Agreements aka Buyer Representation Agreements aka Buyer Contracts aka Touring Agreements were front and center in the settlement of last year’s commission reform class action lawsuits, suddenly thrusting a requirement on nearly all buyers to sign such an agreement before touring a property, even virtually.
Agents are putting agreements in front of consumers that are pages and pages of words designed to protect agents, not homebuyers. These agreements are fully negotiable and I want homebuyers to understand exactly what to negotiate to protect themselves and what to do with all the extras in those agreements.
For all 10 essentials, watch the video. In this post, let’s dive deeper into essential principle #4, my favorite for consumers.
Essential Principle #4 - Buyer Broker Agreements Are Fully Negotiable
Buyer Broker Agreements are an agreement between you and your real estate professional outlining the services your real estate professional will provide you as a homebuyer, and what the agent will be paid for those services.
These agreements are now required in most instances before you see properties, either in person or virtually. In my last post and video, I outlined three exceptions to this new general rule.
But here is an insider scoop about those agreements. They are written by agents to protect agents, not consumers!
Do you have to sign the version handed to you?
Nope! You can negotiate every single point in this agreement, except those required by law.
Sample terms to negotiate include the services you want to receive, the length of the agreement and the broker's compensation.
Compensation between you and the broker is not set by law, but there is a legal requirement that whatever compensation you negotiate is clearly defined in the agreement.
For instance, compensation might be $0 for some reason, it might be a percentage of the property sale price, or it might be a flat hourly fee. There is a legal requirement that compensation cannot be open-ended. That is, you cannot say “fee to be whatever the seller will pay.”
Homebuyers should only sign an agreement that reflects exactly what is agreed to with their real estate professional.
The new rules prohibit real estate professionals from collecting any more than stated in the agreement no matter who's paying. This means that if the negotiated compensation is 2.5% of the purchase price, and the seller is willing to pay 3%, the broker cannot collect 3%.
Other terms can also be negotiated. I recently introduced a course named Agency Agreement Decoder™ designed to walk homebuyers through these agreements, pointing out ways to negotiate provisions that focus on protecting the buyer. The coursework is offered as on demand, self-paced video lessons.
I also recently introduced a consulting offer to have me review your agreement before you sign it. I don’t provide legal advice or agency advice, but I will help you identify the core five contract terms that protect buyers, and how to put the rest back to your agent for changes and/or explanations.
Buyer agreements can be as lightweight as you want. Super lightweight agreements can be used even to audition an agent or tour for a day. Use my Agency Agreement Decoder™ course to design an agreement that serves your specific needs.
And Watch Out For This!
I’m hearing anecdotally that some brokers are adding junk fees to their buyer broker agreements. Lenders have been doing this for years, so I suppose I shouldn’t be surprised, but I am.
These fees might be called admin fees, brokerage fees, transaction fees or regulatory compliance fees. Cross these out! Tell your agent those fees should be paid out of his or her commission, not by you! Or at least, it’s my opinion that if you’ve negotiated a standard 2.5% to 3.0% commission, all fees should be wrapped up in that commission.
You may have less success negotiating these fees out where the negotiated commission is substantially lower than standard, as with discount brokers or savvy negotiation by you.
Final Thoughts
Buyer Broker Agreements might feel scary or limiting, but I’ve got all the insider tips to help you understand these rather simple agreements and strategies to make them work for you. Subscribe to this newsletter and my youtube channel and follow along as I roll out the good stuff with the rest of my series on negotiating these agreements.
Related to this article:
Introducing Buyer Agent Game Plan™
Buyer Agent Game Plan™ was born in very early 2025 and has since grown into the Home Buyer Success Series™, along with Home Buyer Prep Plan™, Agency Agreement Decoder™ and Agent Accountability Playbook™.
The entire series is designed for today's homebuyers to help them optimize for their highest and best homebuying outcome, that is, buying homes for the price and terms they want, guided by skilled negotiators.
I created Buyer Agent Game Plan™ because I 100% believe that your agent choice can absolutely make or break the success of your purchase. There are no returns on that home once you close. You will want to get it right.
Smart buyers don't wing it. They interview. They ask hard questions. They evaluate unemotionally. They know the agent they hire can either protect their investment ... or walk them into a trap.
In Buyer Agent Game Plan™, you'll learn
what type of agent makes the most sense for your specific situation
who pays for your agent and a strategy for shifting the out of pocket cost to the seller
the roles Zillow and discounted brokers can play in home buying
why having your personal ducks in a row before picking an agent matters
what questions to ask to uncover undesirable agent attributes, including commission bias
a ridiculously simple strategy for conducting multiple interviews
and a framework for comparing multiple agent candidates "apples to apples"
I also offer a corollary service called Find Me Agents to provide qualified agents in your local area for you to interview.
Buyer Agent Game Plan™ helps you buy your next home with confidence, knowing you have the right agent in your corner giving you smart advice on a topic you will seldom encounter in your lifetime - the purchase of a huge asset.
If you're getting ready to buy, and you want your agent decision to work for you, not against you, grab my Buyer Agent Game Plan™. It's the step-by-step blueprint I created so buyers like you don't have to guess, gamble or make big mistakes.
Smart buyers don't wait until it's too late -- they hire with a game plan because the best way to avoid buyer remorse is to spot the traps before you step in one.
Fast Start Guide: Getting Started Under The New Homebuying Rules
I’ve been watching the commission reform lawsuits closely since the beginning. One year later, I’ve summarized everything you need to know to get started if you’re buying a home in the post-lawsuit era. Find this fast start guide in my Learning Center.
I’m also busy putting the final touches on my forthcoming book - The Secret Handshake (Play The Home Buyer & Home Seller Game Smarter). This has been an exciting project.
I find myself increasingly obsessed with helping consumers understand residential real estate on a deeper level and how to make more lucrative choices, including how to find, hire and vet agents. Join me on this journey? Hop over to the Learning Center and click the follow button under my bio. You’ll be notified when new offerings are added to the Center.
Do You Need Help Finding Agents?
Whether you are in my backyard here in Los Angeles or someplace farther away, I am available to help you find agents to interview. There is a nominal fee for this service, but I will find and vet three agents for you to interview in your local market, as well as provide a list of interview questions and my proprietary strategy for interviewing and comparing multiple agents with ease.
Complimentary Home Buyer Resources
Please enjoy these resources:
Ignore These 5 Things On A Home Tour - Don't let cosmetic bells and whistles distract you from things you cannot change about a property.
Buying In A Low-Inventory Market - Buyers have to be very strategic and ready to go when competing with other buyers in a seller's market. Don't miss these tips!
Don't Fall Prey To Wire Fraud - wire fraud is real. Be ready to recognize it and know your best practices to avoid it.
Follow Local Trends - Long time readers know I like me some trends! 🤓 This resource explains how market trends impact your home buying and home selling choices and strategies.
Benefits Of A Buyer CMA - Wondering how much to offer when buying a home or how much to list for when selling a home? Learn about Comparative Market Analyses (“CMAs”). They aren't just for sellers!
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Legal Stuff
You are not my client unless we have a written agreement in place. This post is offered for informational and/or entertainment purposes only. Neither I nor Silicon Beach Properties nor eXp Realty, Inc. is responsible for the consequences of how you implement the content of this publication and nothing herein is intended to address your specific situation. Additionally, the information contained herein may be outdated (legally and/or factually) by the time you consume this content, so consult a professional licensed in your jurisdiction for advice.
My CalDRE license number is 01712960. Silicon Beach Properties is my real estate DBA brokered by eXp Realty of California, as am I.
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