US buyer agreements: what must be signed before a home tour

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A buyer in the United States who asks an agent taking part in a multiple listing service to open the door of a home for sale is asked to sign a document first. It names a fee, and it has to be signed before the visit. A buyer meeting it for the first time may wonder whether it is a law, a sales tactic or a formality, and whether signing it means they now owe money.

The answer sits in the practice changes that came out of the settlement reached by the National Association of Realtors (NAR) in litigation brought by home sellers over broker commissions. This guide covers that written buyer agreement and nothing else: who has to use it, the moment it becomes necessary, the four things it must say about the agent's pay, the terms it leaves open, and what happens to the bill when the seller pays less than the agreed fee or nothing at all. Everything below is drawn from NAR's own published guidance and from the court-authorised settlement site, and each rule is given with the limits those sources put on it.

National Association of Realtors, "Written Buyer Agreements 101", published 31 May 2024.

Where the requirement comes from

NAR's page "What the NAR Settlement Means for Home Buyers and Sellers", updated on 24 May 2024, describes an agreement reached with the plaintiffs on 15 March of that year to end litigation over claims by home sellers about broker commissions. Alongside the money, the settlement changed some of the ways a sale is conducted. Those practice changes took effect on 17 August 2024.

Two of them matter to a buyer. The first is the one this guide is about: according to NAR's "Written Buyer Agreements 101", from 17 August 2024 an MLS Participant "working with" a buyer must enter into a written agreement with that buyer before the buyer tours a home. An MLS is a multiple listing service, the shared database through which brokers in an area publish the homes they have for sale. A Participant is a broker or agent who takes part in one.

The second change explains why the first exists. The same NAR page says that offers of compensation to buyer agents are no longer allowed on MLS platforms. A seller may still offer to pay the buyer's agent, but the offer is made outside the MLS. The amount a buyer's agent will earn is therefore no longer something the agent can simply read off a listing. It has to be agreed with the buyer, in writing, before the search gets under way.

The court-authorised settlement site, run by the administrator JND Legal Administration, sums up the term in the same way: written buyer-representation agreements before buyers tour homes, with compensation that is objectively ascertainable, not open-ended, and not exceeded by what the agent actually receives. NAR's guidance places the detailed provisions in paragraph 58(vi) of its settlement agreement.

An MLS rule, not a new law

It is easy to assume that a document everyone must sign is required by statute. In most cases it is not. NAR's member resource "Dos and Don'ts When Working With Buyers", published on 28 October 2024, tells agents to describe the requirement accurately: many multiple listing services now require the agreement because of the settlement and its practice changes, not because of a new law. The same resource tells agents not to misrepresent the nature or the purpose of the agreement to a buyer.

That has a practical consequence for the reach of the rule. NAR's consumer page says the requirement applies to agents who use and list properties on an MLS. It is a condition of taking part in the listing service, enforced through the service's own rules. The NAR guidance read for this guide does not describe what applies to a professional who takes no part in any MLS, and this guide does not either.

State law is a separate layer. NAR notes that several states already require written buyer agreements by law, and that an agreement must include any provisions the law requires. Its member resource adds that state law and local practice may impose additional requirements, including for certain types of agency representation. So a buyer in one state may be signing a document shaped only by MLS rules, and a buyer in another may be signing one that a state statute also governs.

When "working with" an agent begins

The requirement turns on two expressions, and NAR defines both in its "Consumer Guide to Open Houses and Written Agreements", published on 6 September 2024.

A buyer is "working with" an agent once the agent starts providing services. The guide gives two examples: identifying properties for the buyer, and arranging tours. Before that point there is a conversation; after it there is a working relationship that the rule attaches to.

A "tour" is defined by reference to the settlement terms. It is when a buyer who is working with an agent enters a home that is for sale, or directs the agent to enter the home on the buyer's behalf. The second half of that sentence matters for buyers who search from another city: sending the agent in alone to look at a home still counts. So does a live virtual tour given to a buyer who is not physically present. NAR's "Written Buyer Agreements 101" confirms that touring covers both in-person and live virtual tours.

Put together, the timing rule is this. According to the consumer guide, a buyer may be asked to sign once they begin working with an agent, and the signature is needed at the latest before they tour their first home together. There is a window, in other words, between the first service and the first visit. An agent may ask for the agreement at the start of that window, and must have it by the end.

Open houses and other moments that need no signature

The definitions also say what falls outside the rule, and NAR's consumer guide is specific about it. Each of the situations below is taken from that guide.

The logic behind the first four rows is the same each time. The rule looks at whom the agent is serving. A host at an open house is there for the seller's side. An agent chatting with a visitor at the kitchen counter is presenting what they do. Neither has begun to provide services to that buyer, so neither needs the buyer's signature.

This means a buyer can see a good number of homes, and speak to several agents about how they work and what they charge, without signing anything. NAR's settlement page says so directly: agents can still discuss their services with prospective clients without a written agreement, for instance at open houses. The agreement becomes necessary at the point where one particular agent starts acting for the buyer and a private visit is about to happen.

The four things the agreement must say about pay

The mandatory content is narrow, and all of it concerns compensation. NAR's "Written Buyer Agreements 101" lists the provisions, which it traces to paragraph 58(vi) of the settlement agreement.

The first is disclosure. The agreement must specify, conspicuously, the amount or rate of any compensation the MLS Participant will receive from any source, or how that amount will be determined. "From any source" covers the buyer, the seller and the seller's broker alike. The buyer reads one number or one formula and knows what the agent stands to earn on the purchase.

The second is that the amount must be objectively ascertainable and may not be open-ended. This provision is explained with examples in the next section, because it is the one that changes most about how agreements are written.

The third is a cap. The agreement must include a statement that the MLS Participant may not receive compensation from any source that exceeds the amount or rate agreed with the buyer. The disclosed figure is therefore not a starting point that a generous seller can top up. NAR's member resource spells out the consequence for agents: they do not accept seller-paid bonuses or other compensation above what the agreement states.

The fourth is a statement about the fee itself. The agreement must disclose, in conspicuous language, that broker commissions are not set by law and are fully negotiable. Whatever number appears in the document, the buyer is told in the same document that it was open to discussion.

To these four, NAR adds a fifth requirement of a different kind: the agreement must include any provisions required by law, which brings state rules back in.

What the list leaves out is as informative as what it contains. Nothing in it sets a fee, a minimum term or a form of representation. NAR's consumer guide describes the purpose of the document in plain terms: it lays out the services the professional will provide and how they will be paid. Its member resource adds that the agreement ensures buyers are directly involved in negotiating their broker's compensation.

"Objectively ascertainable": what passes and what fails

NAR's "Written Buyer Agreements 101", published on 31 May 2024, gives four examples of the type or amount of compensation an agreement may state: US$0, a flat fee, a percentage, or an hourly rate. Each of them lets the buyer work out, from the agreement and the facts of the purchase, what the agent will be paid.

It also gives one example of wording that fails. An agreement may not say that buyer broker compensation shall be whatever amount the seller is offering to the buyer. That sentence names no amount and no rate. The buyer who signs it cannot know what the agent will earn until a seller has spoken, and a different seller would produce a different answer. NAR's member resource repeats the point as an instruction to agents: do not define compensation as whatever the seller or the seller's agent offers.

The table below is a worked example. It assumes a home bought for US$400,000 and three agreements written in three of the forms NAR names. The rates and amounts are invented for the arithmetic and say nothing about what agents charge.

In each row the fee can be found without asking anyone what the seller has offered. That is the whole of the test. A percentage moves with the price, and an hourly fee moves with the hours, but both follow a rule fixed in advance.

The cap then applies to whichever figure the agreement holds. Take the percentage row. Suppose the seller of that US$400,000 home has offered, outside the MLS, to pay a buyer's agent 3% of the price, which is US$12,000. The agreement says 2.5%, which is US$10,000. Under the third mandatory provision the agent may not receive more than US$10,000 from any source, so the extra US$2,000 on offer cannot go to the agent.

Nor can the agreement simply be rewritten at that moment. NAR's member resource tells agents not to amend an agreement just to match a higher offer of compensation, and says that any amendment needs a legal basis and a fully informed buyer who agrees to it, with state contract law to be consulted. It also tells agents not to sign multiple agreements with a buyer at one time for the same services. Both instructions sit under a heading that asks agents not to work around the practice changes, and NAR states that the changes must be implemented in good faith.

What the agreement leaves open

Beyond the provisions on pay, NAR's guidance says its policy does not dictate four things, and gives examples for each.

It does not dictate the type of relationship. The examples listed are agency, non-agency, exclusive, non-exclusive, subagency, transactional and customer relationships. Which of these exist in a given state is a matter for that state's law.

It does not dictate the term. NAR's examples are one day, one month, one house or one zip code. An agreement can therefore cover a single afternoon of visits or a single property, and a buyer who wants to see how an agent works before committing for longer is asking for something the policy allows.

It does not dictate the services. The examples include ministerial tasks, a number of showings, negotiating and presenting offers. NAR recommends that the agreement state clearly which services the professional will provide.

It does not dictate the type or the amount of compensation, with the same four examples as before: US$0, a flat fee, a percentage or an hourly rate.

Several other terms are named as open to negotiation between the parties:

• Duration, including whether the agreement extends automatically to closing once a purchase contract has been ratified.
• Termination, which either side may be given the right to do, with or without cause.
• A carryover period, under which compensation may be owed if the buyer signs a purchase agreement within an agreed time after terminating.
• A retainer fee, with the agreement stating whether it forms part of the total compensation, is credited against it, or is refundable.
• Dispute resolution, where the agreement may provide for mediation or arbitration, mandatory or optional, and may include waivers of jury trials and of class actions.

The carryover period deserves a careful read, because it is the term that can make a fee payable after the relationship has ended. As NAR describes it, the clock starts at termination and the trigger is the signing of a purchase agreement within the agreed time. How long that time is, and which homes it covers, are for the two parties to settle in the document.

NAR also has guidance on how the document is filled in. Professionals should not pre-fill key terms such as the length of the agreement and the compensation. Agreements should be organised, readable and in plain language, and NAR suggests taking legal advice before standard provisions are changed. The consumer guide gives the buyer's side of the same idea: buyers should not sign anything with terms they disagree with or do not understand, and buyer agreements are fully negotiable.

Who pays when the seller does not

The agreement fixes what the agent is owed. It does not, by itself, fix who hands over the money. That depends on the seller and on what the agreement says.

NAR's magazine, reporting the practice changes on 15 August 2024, puts the baseline plainly: if the seller is not paying buyer broker compensation, the buyer is responsible for paying their agent if the written agreement says so. Its member resource asks agents to make sure, before signing, that the buyer understands they are responsible for any agreed compensation, and that they can ask the seller or the seller's agent to pay it, though not every seller will.

Return to the worked example, with the same assumptions: a US$400,000 purchase and an agreement at 2.5%, so a fee of US$10,000. If the seller has offered 1.5% of the price toward the buyer's agent, that is US$6,000. The difference between US$10,000 and US$6,000 is US$4,000, and where the agreement makes the buyer responsible for the agreed fee, that US$4,000 falls to the buyer. If the seller has offered nothing, the full US$10,000 does.

The buyer has one more route. According to the member resource, even when no compensation is offered, a buyer can ask the seller to cover the buyer broker cost in the offer itself. NAR's magazine noted on 9 August 2024 that sale contracts or offers to purchase may need revisions to let buyers make that request. The seller is free to accept, refuse or counter, as with any other term of an offer.

Two limits on financing are worth knowing before the fee is agreed. NAR's member resource says that, under current rules of the Federal Housing Administration (FHA), agent compensation cannot be financed through a mortgage. That statement comes from NAR's guidance to its members, published on 28 October 2024, and was not checked against the housing department's own pages for this guide. Separately, NAR's "Consumer Guide: Seller Concessions", published on 24 September 2024, explains that a concession is a seller's payment of certain costs the buyer faces, that the maximum total depends on the buyer's lender and on state law, and that any payment toward the buyer's broker fee is excluded from those lender limits and must be made off-MLS.

Finally, the member resource is firm that the size of a seller's offer must not shape the search. Steering buyers on the basis of broker compensation is prohibited under the Realtor Code of Ethics and MLS policy, and agents are to inform buyers of every available home that meets their criteria, whether or not compensation is offered and whatever its amount.

Confidentiality and MLS audits

A signed buyer agreement shows what the buyer has agreed to pay, which is useful information for the other side of a negotiation. NAR's member resource treats it accordingly: agents should not share a signed buyer agreement with competitors unless state law requires it, because it contains confidential compensation information that matters to negotiating for the buyer.

There are two exceptions to that privacy. Some states, the resource notes, require the agreed buyer agent compensation to be disclosed to the listing agent at certain points, and state law is followed where it does. And some multiple listing services may audit compliance with the buyer agreement rules. In that case agents are expected to comply fully with audit requests and local MLS rules, and the MLS is expected to keep the agreements confidential.

For a buyer, this explains why an agent may decline to show the agreement to a seller's agent who asks for it, and why the same agent may hand it to their MLS without the buyer's fee becoming public.

What state law adds, and what this guide leaves open

Everything above describes one layer: the MLS rules that follow from the NAR settlement, as NAR's own guidance set them out between May and October 2024. Three points sit outside it.

State requirements were not examined. NAR says several states require written buyer agreements by law, without naming them on the pages read here, and says practices vary by state and local law. Its consumer guide points buyers to their real estate professional or an attorney for the rules where they are buying. A state may require a particular form, a particular disclosure or a particular kind of relationship; none of that is described in this guide.

Conflicts of interest are flagged by NAR but not settled by it. "Written Buyer Agreements 101" suggests that an agreement address disclosure and consent where the professional represents other buyers interested in the same property, and where dual agency, designated agency or transaction brokerage arise. Whether and how those arrangements are permitted is, again, a matter of state law. NAR's longer list of answers on dual agency, ministerial acts and compensation ranges could not be read for this guide.

Loan programme rules are the third. The statement on FHA financing above is NAR's, and the rules of other government-backed loan programmes on buyer-paid commissions were not verified.

Within those limits the picture is consistent across every source. An agent who takes part in an MLS and works with a buyer needs that buyer's signature before the first tour. The document must state a fee the buyer can calculate, cap the agent at that fee, and say that the fee was negotiable. The rest of it, from a one-day term to a carryover clause, is whatever the two people who sign it have agreed.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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