If you're planning to buy a home this year, you may notice something new during the process. Your real estate agent will likely ask you to sign a Buyer Representation Agreement before showing homes.
Many buyers are surprised by this step, but it’s now required due to recent changes in the real estate industry. Let’s walk through why this agreement exists, how commissions actually work, and what it means for you as a homebuyer.
Why Buyer Representation Agreements Are Now Required
For many years, when a seller listed their home, the seller typically offered compensation to the buyer’s agent through the Multiple Listing Service (MLS). Because of this structure, buyers rarely had to think about how their agent was being paid.
However, following a series of antitrust lawsuits involving the National Association of Realtors, several industry rules changed. One of the biggest changes is that buyer agent compensation can no longer be advertised within the MLS.
Because of this shift, agents are now required to have a written buyer representation agreement in place before touring homes.
This agreement simply outlines the professional relationship between the buyer and their agent, including how the agent will be compensated for their work.
Real Estate Is One of the Few Professions Where Payment Happens at the End
One thing many people don’t realize is that real estate is one of the only professions where someone works for free until the very last day — your closing day.
A Realtor may spend weeks or even months helping a buyer:
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Touring homes
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Researching neighborhoods and comparable sales
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Writing and negotiating offers
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Coordinating inspections
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Navigating attorney review
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Working through financing and appraisal steps
Yet the Realtor does not get paid until the transaction successfully closes.
And if a buyer never purchases a home, the agent is typically not paid anything at all.
That’s a lot of time, expertise, and work performed based entirely on trust.
A Buyer Representation Agreement Creates Commitment on Both Sides
A great Realtor will be fully committed to helping you find the right home and guiding you through the entire buying process.
Signing a buyer representation agreement shows that you are committed to working together as well.
These agreements are also flexible. Everything within them is negotiable.
For example, an agreement could be structured as:
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A one-property showing agreement
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A short-term agreement while you actively search
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A longer agreement if you plan to work with the same agent throughout your home search
The goal is not to trap buyers into a contract. Instead, the agreement simply establishes clear expectations for both parties.
What Is “Procuring Cause”?
Another important concept in real estate is called procuring cause.
This refers to the agent who originally introduced the buyer to the property and performed the work that ultimately led to the purchase.
For example, imagine an agent spends time:
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Showing you homes
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Researching properties
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Helping you identify the home you love
But then you decide to have a relative or friend who is a part-time Realtor write the offer instead.
Without a written agreement in place, the agent who originally did the work may have no protection for their time and effort.
The buyer representation agreement helps prevent these situations by clarifying the working relationship from the beginning.
Have Commissions Changed Since the Lawsuit?
Despite the headlines surrounding the lawsuit, the day-to-day experience for buyers and sellers has not changed as dramatically as many people expected.
In my experience, sellers are still frequently contributing toward the buyer agent’s commission.
The difference is that the compensation simply cannot be advertised in the MLS the way it used to be.
Here in Illinois, our standard real estate purchase contract even includes a section where the buyer can request that the seller contribute toward the buyer agent compensation as part of the offer negotiation.
Interestingly, industry data suggests that commissions have not decreased.
According to national reporting from Redfin and other housing industry sources, the average real estate commission in the United States has actually increased slightly, averaging around 5.3% in 2024, compared to roughly 5.1% previously.
The Biggest Change: Transparency
The biggest difference buyers will notice today is simply that buyer representation agreements are now required upfront.
While this may feel unfamiliar at first, it ultimately provides something positive for everyone involved: clarity and transparency.
Both the buyer and the Realtor understand their professional relationship, the services being provided, and how compensation works.
When buyers and agents are both committed to working together, the home buying process tends to be much smoother and far less stressful.
Thinking About Buying a Home?
If you're considering buying a home and have questions about the new rules surrounding buyer representation agreements, I'm always happy to help explain the process.
Buying a home is one of the biggest financial decisions you'll make, and having the right guidance along the way can make all the difference.
Jamie Hering
The Hering Homes Team
Coldwell Banker Realty
