How Buyer Agreements Boost Your Value, Fend Off Claims

It’s an opportunity to explain to your clients what your role is in the transaction and how they’ll benefit from your services.

Real estate agents don’t always ask their clients to sign a buyer representation agreement—but there are plenty of reasons they should, according to the National Association of REALTORS®’ latest “Window to the Law” video. Such an agreement is a legally binding document that details the agent-client relationship, such as the services you’ll provide, agency relationship and compensation. It protects both the agent and the buyer and helps avoid misunderstandings, explains Deanne Rymarowicz, associate counsel at the National Association of REALTORS®.

“While jurisdictions vary in what is required in terms of written agreements when it comes to compensation, most states require that any exclusive brokerage or agency relationship be in writing. And about half of states require written disclosure of an agency relationship in order for the real estate professional to be paid for the services,” says Rymarowicz, urging agents to check with their state REALTOR® association to make sure they’re in compliance.

The buyer agreement can be a talking point with clients about the value you bring to the transaction. Some clients may be skeptical at first when asked to sign an agreement, which is an opportunity to provide clarity about your services and build trust. Review the agreement as you explain your duties and obligations to your clients and reinforce that you’re a professional who follows a Code of Ethics.

For more guidance on conversations about compensation, NAR has a website——to help agents articulate their value.

“A signed agreement may be helpful in the event of a procuring cause dispute or, in rare instances, a legal dispute with a buyer,” Rymarowicz says. She points to a recent case in Montana in which the court leaned on the buyer representation agreement in its ruling that a broker did not have an obligation to disclose available zoning information.

“Buyer representation agreements are a win-win proposition for both real estate professionals and consumers,” Rymarowicz says. “They assist in building trust and a mutually beneficial relationship by promoting transparency through upfront conversations, providing clarity regarding services consumers can expect to receive and how their real estate professional will be compensated.”