Once you’ve decided it’s time for you to buy a home, interviewing REALTORS® may be your next step (Learn more in our blog on questions to ask a REALTOR®). Part of the process of finding your REALTOR® will include negotiating your written buyer agreement which includes services the agent will provide and the compensation you’ll owe as their client. (Learn about written buyer agreements in our blog.)
When Will I Be Able to Negotiate a Written Buyer Agreement?
In Maryland, a real estate professional must have a written agreement with their client before providing any brokerage services outlined in state law. This means written buyer agreements are required before you tour a home, whether the tour is virtual or in-person. The agreement makes sure you and your agent understand roles, responsibilities, and agent compensation before any work has been done, protecting you and your agent.
If you’re just attending an open house or asking a real estate professional about their services, you do not need to sign an agreement. Learn more about open houses in our blog.
What can I negotiate?
These agreements are negotiable, including terms about services your agent will provide, how much your agent is paid, how long the agreement will last, and more. You and your agent will work together to make an agreement that is acceptable for both of you and allows you to get the valuable services a REALTOR® provides while your agent pursues fair compensation for their work.
Remember that compensation amounts are not set by law. You should consult an attorney if you have any questions or concerns about an agreement.
How is my agent compensated?
Agent compensation can take many forms, such as a flat fee, a percentage of the purchase price, a combination of a percentage of the purchase price plus a flat fee, or an hourly fee. Under Maryland law, agents cannot agree to an open-ended amount or range of compensation such as “the agent’s compensation will be whatever amount the seller is offering” or “between X and Y percent.” You can also ask the seller to offer compensation to your agent, which can be sought in the purchase agreement.
Learn more in our compensation blog or compensation video series.
What types of services can my agent provide?
Agents may offer many types of services such as finding and showing you homes that meet your criteria, accompanying you to showings, sharing their analysis of available properties, negotiating on your behalf, and more. They are also a valuable resource once you are under contract to purchase a home, to address issues that arise in financing, your home inspection, or other contingencies.
How do I start the conversation?
You may want to talk to a few agents to find the best match to help you on your homebuying journey. If you are working with a REALTOR®, they are bound by a Code of Ethics to have open and transparent conversations with you about your options.
Learn why you should use a REALTOR® in our blog, and use these questions when interviewing REALTORS to represent you.
What if we can’t agree?
You don’t have to sign an agreement that you don’t agree with, and you or the agent can walk away from a negotiation at any time. Keep looking for the right fit—another agent may be able to better meet your needs.
Can we change the terms of the agreement after we make it?
Yes! You and your agent can mutually agree to change the terms of your agreement. But your agreement and state law may govern when it can be changed or terminated. Read your agreement closely and speak with your agent or their broker if you would like to change or exit your agreement.
