Buyer agency agreement: Definition and explanation
Author:
Kevin GrahamApr 23, 2025
•6-minute read

Buying a home can be a long process involving finding the perfect house, making a competitive offer that wins over the seller and then working out a purchase agreement. With all the intricacy involved, it’s good to have representation in your corner. If you’re a buyer, this means finding a buyer’s agent and agreeing on how you’re going to work together.
What is a buyer agency agreement?
When you find an agent that you want to work with, you’ll usually sign a buyer agency agreement. This is a contract between a prospective home purchaser and a real estate agent who will represent them during the home buying process. You may also hear this referred to as a buyer representation agreement or buyer-broker agreement. It spells out the services your buyer agent will provide to you and under what terms.
The agreement could be between a real estate agent and a client, or you could be working with a real estate broker who chooses to also take on individual clients.
How does a buyer agency agreement work?
Buyer agency agreements work differently depending on what you’re contracting for. You could have someone take you through the whole process from defining your needs and house hunting to getting a mortgage and closing the deal, or for specific steps in the process like putting together the purchase agreement.
If you’re working with someone throughout your home buying journey, they usually are paid on commission. If you’re paying for specific things the agent does, these might be handled on a fee basis. You can choose to pay your agent yourself or negotiate with the seller. Sellers may offer buyer agent compensation through a commission split with the listing agent or use another arrangement if they want to attract a bigger market.
Compensation offers can’t be shared on listings within the multiple listing services real estate agents access to find available properties. Because of this, you may not know until you get into the process whether a seller will help you pay your agent’s commission. This means you should know upfront in the contract how much you can expect to pay.
Types of buyer agency agreements
There are a couple of categories of buyer agreements you should be aware of. These can be exclusive or nonexclusive in nature.
Exclusive buyer agency agreement
Exclusive buyer agency agreements mean you must work only with that agent for the term of your contract. The term can vary, but if you work with another agent during that term, you may have to pay your agent their fee regardless of whether they were involved in the transaction. But working exclusively with one agent may make them call you first when listings match your preferences.
Nonexclusive buyer agency agreement
A nonexclusive agreement allows you to work with as many agents as you like.
There are a couple of different nonexclusive agreements. Initially, the agent may sign a not-for-compensation agreement with you to establish a relationship. This way they don’t get paid on the house hunting side, but it may include language that specifies what they get paid if the deal closes with their assistance.
The other agreement is a representative agreement, where someone is representing you but being nonexclusive means you can work with whoever finds you a house first.
What are the legal terms of a buyer agency agreement form?
Each buyer agency agreement is negotiable. Here are some of the key provisions to consider.
Agent duties
One of the most important things to agree on is what you’re paying the agent for. An agent may help you with all of the following or do things individually on a fee basis, depending on the terms of your contract:
- Determining your price range and desired features
- Comparing home loan options
- Searching for homes to buy
- Negotiating home offers
- Preparing purchase agreements
- Recommending home inspectors
- Attending closing
Ethical duties
Real estate agents have professional associations that they belong to, which helps certify to the client that they meet certain education and other professional requirements. These associations have codes of ethics that often require fair dealing. While the real estate agent’s first responsibility is to the client, ethically, and many times legally, an agent is required to treat all parties fairly. Among other things, this means:
- The agent makes all appropriate disclosures as to the condition of a home.
- The agent presents all offers.
- The agent doesn’t mislead clients in an attempt to win their business.
The biggest professional association for real estate agents is the National Association of REALTORS®. However, you don’t have to be a REALTOR® to be a real estate agent.
Fiduciary duties
Real estate agents have a fiduciary duty to you. This means that they must work to get you the best deal they can while understanding your goals with the property and how much you want to spend. While they work for you, they also have to follow real estate law, including federal and state fair housing regulations. For example, they can’t refuse to show you a home based on the race of the owner.
Term length
The term length provision discusses how long you’re agreeing to work with an agent exclusively. Like every other provision of your agreement, this is negotiable. They’re typically as short as 3 months and as long as a year.
Dual agency
Dual agency means representing both the buyer and seller. While some opt for dual agency is a method of saving money on fees or commission, it’s illegal in some states. Agents acting in a dual capacity should disclose conflicts. Dual agency may create a conflict of interest meaning an agent can’t effectively represent either the buyer or seller in a transaction.
How does dual agency work?
The most obvious form of dual agency is when one agent is acting as both a buyer’s agent and a seller’s agent. This may be used most effectively in sales between family and friends when the essential terms are already agreed upon and you just need someone to do the paperwork.
The second form of dual agency is little more insidious. If both the buyer’s agent and the seller’s agent work for the same brokerage, it could incentivize a higher end price. A fee is paid by the agents to the brokerage and it’s in the interest of the brokerage for the fee taken out of commission to be as high as possible.
What are buyer’s agents vs. selling agents?
A buyer’s agent and a seller’s agent represent the buyer and seller in a home purchase transaction. Ideally, these are different people from different brokerages so that they can zealously represent the interests of their clients.
Key aspects of buyer agency agreements
While we’ve gone over several parts of the buyer agency agreement, here are the most important ones to be aware of.
- Exclusivity (or lack thereof) matters. Nonexclusive agreements allow you to work with anyone at any time. Exclusive agreements bind you to certain representation for a term, but agents may be more likely to give their exclusive clients first crack at new listings.
- Understand how compensation is handled. Although in the past the general rule has been that agents get a commission between 5% – 6%, everything is negotiable. You and/or the seller may pay when the sale is complete or with flat fees for specific services.
- Know when you can terminate the arrangement. If you are under an exclusive contract, you must abide by its terms. However, if it’s not working out, you can always ask to terminate early subject to the agreement of the real estate agent.
Can you negotiate the terms of a buyer agency agreement?
If the terms of the agreement are legal, everything is open to negotiation. That includes the fees paid, the term and the services they provide.
What’s the difference between a real estate agent and a broker?
Although it's sometimes used mistakenly like interchangeable vocabulary, it's important to understand the difference between real estate agents and brokers. Real estate agents typically handle the day-to-day work of meeting with clients, house hunting, negotiating purchase agreements and such.
Real estate brokers typically manage several individual agents and provide these agents with resources that may include marketing materials and office space. They’re subject to additional licensing requirements beyond what states require of individual agents. Brokers often employ real estate agents directly. Part of the agent’s commission goes toward the brokerage for the services provided.The bottom line: You can negotiate with your buyer’s agent
A buyer agency agreement is between a buyer in the real estate agent or practicing broker regarding services provided in the facilitation of a home purchase and the fees that are charged. Terms may involve exclusive or nonexclusive representation. Everything is negotiable. In some cases, people try to save money by having one agent represent both sides of the transaction in dual agency, but this can create a conflict of interest.
Have you found representation and a house? If you’re ready, you can apply for mortgage online.Kevin Graham
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