What is an Exclusive Buyers Agent Agreement and Should I Sign One?

Updated September 2024.

The use of exclusive buyer’s agent agreements used to be highly debated among professional Realtors, but are now required across the country.

Buyers Agency Agreements Have Become Law for Realtors

These agency agreements are the law across the country for buyers agents who are Realtors (not all real estate agents are Realtors, but most are). Jan. 1st 2024, it became required for buyer’s agents to use a buyer’s agent agreements in the state of Washington. This change in policy is a reaction to various ongoing lawsuits over real estate commission across the country. As of August 2024 or so, it became required for buyer’s agents who are Realtors to use these contracts throughout the country.

The reason for requiring buyer’s agency agreements is an outcome of national lawsuits (multiple) attempting to decouple the real estate commission from the seller (it used to be the seller was obligated by their contract with their seller’s agent to pay both the seller’s agent and buyer’s agent commission).

Home Sellers Are Now Only Obligated To Pay Their Own Seller’s Realtor

While it is still legal across the country for sellers to pay buyer’s agent commission upon request (typically through seller concessions or credits), it can no longer be a part of a listing agreement with a seller’s agent who is a Realtor in the United States. The seller can no long be obligated to pay a buyer’s agent commission.

Buyer’s agents in most cases are now submitting commission demand requests to the seller when they submit their offers. However, this commission request can be rejected by the seller outright and is fully negotiable, just like the sales price of the home is negotiable.

What Our Buyer’s Agents Agreements Are Like, For Example

Short term home showing contracts available (feel free to try us out)
All our contracts are cancel anytime for no charge
We typically request the seller to pay for the entire buyer’s agent fee
Kami’s buyer’s agent commission is 2% (if paying out of pocket), reduced in full (often) or in part by the seller
Friendly, experienced buyer representation
You will never feel trapped, only supported

All buyer’s Realtors (not all real estate agents are Realtors) nationwide must enter into a formal signed agreement prior to showing any homes (hence our easy short term contract options, and our ongoing worry-free cancel anytime policy). Since commissions remain fully negotiable this does not necessitate a buyer pay anything out of pocket for buyer’s agent representation. When making an offer the negotiation options are:

We can negotiate for the seller to cover the cost of a buyer’s agent fee.
We can negotiate a seller price reduction or credit to cover the buyer’s agent fee.
If needed, we could negotiate financing the buyer agent fee into your mortgage (if your lender allows), spreading the cost over the life of the loan.

What is an Exclusive Buyers Agent Agreement?

The answer to this question is fairly simple, but the contract you sign might be more complicated. Be sure to read any real estate agreement in full before signing and we already recommend consulting a lawyer for legal advice.

A simple exclusive buyers agent contract is an agreement between a home buyer and their Realtor that for a set period of time they will not buy any real estate of a specific category in a specific location without using the services (agency) of that Realtor in buying the property. It typically is also an agreement to compensate that buyer’s agent for their agency in the sale. It is possible to sign a buyers agent agreement that is not exclusive, those most buyers agents I have run across would not be interested in such an arrangement.

The 3 Basic Parts to an Exclusive Buyers Agent Agreement:

Set period of time
Agreement to compensate for help with finding a specific type of real estate in a specific location
Agreement not to work with any other Realtor in finding the specified real estate

3 Reasons a Home Buyer Shouldn’t Sign an Exclusive Agreement

1. Time period is too long. Relationships can change. If the period of time set in the agreement is too long, the home buyer might feel trapped. Even if they like the Realtor, they could reasonably worry that the Realtor will stop serving their interests and working hard for them over a long period of time.

2. Compensation is too high, too risky. If the seller isn’t offering enough money to the buyers agent, it will be the responsibility of the buyer to pay their buyers agent the difference, no matter how high that amount might be (this is set by your buyer’s agent agreement). If you want to know the average buyers agent commission rates prior to the law changes, we have done that research for you here.

3. Type of real estate or location is too general. The exclusive buyers agent agreement should specify the geographic location the agreement applies to and the type of property. The location and the type of real estate the real estate buyer is looking for should match the buyers agent’s expertise. Realtors are often experts within location and within a property type, not experts in general.

Example of an Exclusive Buyers Agent Agreement

Should I Sign an Exclusive Buyers Agent Agreement?

I’ve seen some exclusive buyers agent agreements that I wouldn’t recommend anyone sign. The level of risk to the home buyer is dependent on the specifics of the contract. If the period of time is short, there is less risk. Also if the compensation is tied to a specific location and specific type of property, that reduces risk as well. Finally, be sure to carefully read the fine print on what will happen if the seller isn’t willing to pay the buyers agent commission in part or in full. Consider whether or not the terms of the exclusive buyer’s agent agreement are fair and reasonable.

Looking for a Top Buyer’s Agent Who Will Protect You?

Kami Price, Principal Broker licensed since 2004, has helped hundreds of home buyers find their next property and is one of the top buyer’s agent specialists in the greater Portland metro area. Kami would love to setup a no obligation consult with you today. She can put your mind at ease. Chat with the bot on this site or call her office direct at 503-773-0000.