If you’re a homebuyer working with an agent who is a REALTOR®, it means you are working with a professional ethically obligated to work in your best interest. To formalize this process, you will be asked to sign a written buyer agreement once you’ve chosen the professional you want to work with.
Here’s What You Should Know About Written Buyer Agreements
- What is a “written buyer agreement?” A written buyer agreement is an agreement between you and your real estate professional outlining the services your real estate professional will provide you, and what they will be paid for those services.
- Why am I being asked to sign an agreement? Written buyer agreements are legally required before a licensed real estate salesperson provides any brokerage services on your behalf.
- How do I benefit from these agreements? These agreements clearly lay out what services you (as a homebuyer) expect your real estate professional to provide, and what your real estate professional will be paid. These agreements make things clear and reduce any potential confusion at the outset of your relationship with your real estate professional.
- When do I need to sign an agreement? Under Maryland law, you will need to have an agreement in place before an agent can work with you in a brokerage capacity. You will be asked to enter into a written buyer agreement with your real estate professional before “touring” a home with them, either in-person or virtually. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.
- Can I sign a “touring agreement” instead of a brokerage agreement? While some states may allow the use of a touring agreement, many that have been circulated are not in compliance with Maryland law. Buyers should ask detailed questions and conduct due diligence before signing anything claiming to be a “touring agreement.”
- Are these agreements new? In some places, yes. However, unlike some other states, Maryland has required the use of written buyer brokerage agreements since 2016.
- Are these agreements negotiable? You should feel empowered to discuss any aspect of the agreement with your real estate professional, such as the services you want to receive, the length of the agreement, and the compensation, if any. Compensation between you and your real estate professional is not set by law. In the written agreement, the compensation must be clearly defined as a dollar amount, a percentage or some combination of those—and not open-ended or a range. Only sign an agreement that reflects what you have agreed to with your real estate professional.
- Does this mean I have to pay my real estate professional out of pocket? Not necessarily. While you are responsible for paying your real estate professional as outlined by your agreement, you can still request, negotiate for, and receive compensation for your real estate professional from the seller or their agent. Talk to your REALTOR® about what options are available to you.
- Do agreements dictate a specific type of relationship I need to have with my real estate professional? No—you are allowed to enter into any type of business relationship with your real estate professional allowed by Maryland law. You can find a summary of business relationships here. MAR-Brokerage-Chart-Web (mdrealtor.org)
- Can I change or exit an agreement? Yes. Maryland law allows you and your real estate professional to mutually or unilaterally agree to terminate your agreement before the expiration date. Agreements may have specific conditions under which they can be exited, so read the text of the agreement and speak with your real estate professional if you would like to change or exit your agreement.
Your REALTOR® can review all aspects of the buyer brokerage agreement with you and answer any questions you may have about their services and compensation, so that you can be confident in undertaking your home search.
