So, you've decided it's time to buy a home and want a real estate agent to guide you through the process. The next step is interviewing agents and negotiating a written agreement that outlines the services they will provide and the compensation they will receive. Here’s what you need to know about negotiating an agreement with a REALTOR®:
When Can You Negotiate? Before touring homes, either in-person or via a live virtual tour, many real estate professionals will require you to sign a written buyer agreement. This agreement ensures both you and your agent are clear on expectations, including roles, responsibilities, and agent compensation. However, if you’re simply visiting an open house or asking about an agent’s services, you don’t need to sign an agreement right away.
What Can You Negotiate? Written buyer agreements are fully negotiable. You and your REALTOR® will collaborate on terms like the services they’ll provide, how long the agreement will last, and how much they’ll be paid. Compensation is not set by law, and you should feel empowered to discuss an arrangement that works for you. If needed, consulting an attorney for clarity can be helpful.
How Is Your Agent Compensated? Compensation can come in various forms—flat fees, percentages of the purchase price, or even hourly fees. Importantly, agreements cannot include open-ended or vague compensation terms, such as "whatever the seller offers." In some cases, you may also request the seller to cover your agent's compensation as part of the purchase agreement.
What Services Will Your REALTOR® Provide? The services a REALTOR® can offer are extensive, from finding homes that meet your criteria to providing property analysis, accompanying you to showings, and negotiating on your behalf. Working with a REALTOR® also means they are bound by the Code of Ethics, ensuring that their priority is to protect and promote your best interests.
How Do You Start the Conversation? Interviewing multiple agents is a smart first step. Ask questions about the services they offer and their approach to compensation. REALTORS® are required to have transparent and open conversations, so don’t hesitate to explore all your options.
What If You Can’t Reach an Agreement? If you’re unable to come to an agreement that works for both you and the agent, you’re not obligated to sign. Keep searching for the right fit. There are plenty of agents who may align better with your needs and expectations.
Can You Change the Agreement Later? Yes! If circumstances change or you need to adjust the terms, you and your agent can mutually agree to modify the agreement. However, it’s important to read the agreement closely, as certain state laws or contract clauses may govern when changes can be made.
Negotiating a written agreement with your REALTOR® is an essential step in ensuring a smooth and successful homebuying experience. For more detailed information, consult with a real estate professional and visit our guide on offers of compensation.
