Buyer Agency Agreements - What You Need to Know (2023)

Signing paperwork and agreements is inevitable when purchasing a home. One of the agreements you are likely to encounter whenbuying a house is buyer agency agreements. In this article, you will learn what the buyer agency contract is all about, what is included in it, and what to look out for before signing this agreement.

Related: 4 Types of Real Estate Contracts: A Beginner’s Guide

What Are Buyer Agency Agreements?

A buyer’s agency agreement is basically a contract between a real estate agentand a home buyer that dictates how the two parties agree to work together. The document is meant to set expectations and safeguard both the buyer and agent.

Before you sign buyer agency agreements, it is crucial to review the terms of the agreement and ask for clarification if something is not clear. If you are unsure about anything, you could consult an attorneybefore signing the document.

What Is Included in Buyer Agency Agreements?

In the real estate industry, different brokerages and agents have their own versions of buyer agent contracts. Some even call them different names like buyer broker agreement or buyer representation agreement. Whatever version you encounter, be sure to look out for the following important details in buyer agency agreements:

Buyer Exclusivity and Representation

The contract will be either an exclusive buyer agent agreement or a non-exclusive buyer agent agreement. With a buyer exclusivity agreement, you can only work with the brokerage or agent you are signing with until the term length is over. Exclusive buyer agency agreements could run for a few months up to one year, and may not be revoked unless under special circumstances. On the other hand, a non-exclusive buyer agent agreement means that the buyer is not bound to one brokerage or agent.

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Term Length

This refers to the time period that buyer agency agreements are active. Typically, buyer agent agreements last for about 90 days. However, they can be shorter or longer, depending on what you and your agent agree. The term length section might also include guidelines on what happens when the contract expires before you find your new home. Will you part ways, renegotiate terms, or renew the agreement? Take note that waiting until the term expires is the easiest strategy for getting out of unfavorable buyer agency agreements, so avoid signing any contract that will tie you for more than six months.

Termination Rights

If either the home buyer or agent wants to cancel the working relationship, the termination rights dictate how the break-up should happen. You will find information on things like the grounds for termination, how much notice should be given in advance, how much compensation the agent or brokerage receives, and how the termination should happen. Termination can be very tricky, especially if you’ve hired a family member or friend. To avoid this mess, it would be advisable to work with an agent you are not emotionally attached to.

Property Description

Quite often, buyer agency agreements will mention the specifications of the house you are looking for. This could include details like price, size, type of property, neighborhood, features, number of bedrooms, and other considerations. With these details, you will have a reference to point back to in case the agent doesn’t meet your expectations.


The commission paid to real estate agents is usually about 5%-6% of a home’s sale price. Though this amount is often paid by the seller, you need to understand what your responsibility will be in case you breach the buyer’s agent agreement or the seller refuses to pay.

Agent duties

Buyer agency agreements usually come with a description of the agent’s duties. This could include responsibilities such as counseling you on market conditions, finding and showing you properties, performing comparative market analysis, facilitating negotiations with sellers, preparing the necessary paperwork and liaising with home inspectors, escrow companies, and appraisers. Review this section and make sure all your expectations are met.

Related: What Does a Real Estate Agent Do Exactly?

Do I Have to Sign a Buyer Agent Agreement?

Buyer Agency Agreements - What You Need to Know (1)

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If you don’t feel comfortable signing a buyer agency agreement, you don’t have to. However, if you are in a state like Virginia, Minnesota, or Connecticut, you don’t have a choice. However, be very selective about who to sign with, and ensure that the terms of buyer agency agreements are as favorable as possible. The agreement should include a clause that allows you to end the relationship if things are not working.

How to Get Out of a Buyer’s Agreement

Even if you search carefully and find the seemingly perfect agent, the relationship might just not work out. Before you start working with another agent, you need to first terminate the agreement between you and the current agent. Take note that there is a right way and a wrong way to end the relationship.

Here are the steps for getting out of buyer agency agreements.

Read the Contract

Start by perusing the terms of the buyer agency agreement. It will reveal under what conditions the contract can be terminated before its expiration. Quite often, you will be able to terminate the contract with a letter of termination or cancellation if you have reasonable grounds for your decision. Either of the parties can end the agreement in this way.

Termination of Agency and Release

In case the buyer agency agreement is silent on termination, find out if your state has a form that you can use to terminate the contract. This form is often referred to as the ‘termination of agency and release’. You could also conduct a search online for samples of buyer agent termination letters.

In the termination form, you will be required to provide details about why you desire to end the contract. The form could also mention the fees you might have to pay after termination. If you cannot find this form anywhere, simply write your agent a letter and ask if they are willing to end the contract.

Talk to the Broker

If you cannot sort out the problem with the agent directly, you could escalate it to the agent’s broker. The broker is in charge of all the agents that work within their brokerage. Whenever you sign an agreement to work with an agent, you have actually signed a contract with the agent’s brokerage. The commission generated from a home sale goes to the brokerage, and then a percentage is allocated to the agent involved.

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If you are not happy with your agent, consider approaching the broker directly. The broker will be able to end the agreement even without the agent’s input. Alternatively, the broker could offer to assign you a different real estate agent within the same brokerage.

Breach of contract

If your agent or broker is not willing to terminate the buyer agency agreement, you could find a way to end the agreement via a claim for breach of contract. Begin by reviewing the responsibilities of the agent as outlined in the contract. If you discover that the agent has breached any of their responsibilities, inform them that you intend to go after a claim for breach of contract if the agent refuses to end the agreement. If the agent doesn’t comply, you can then proceed with initiating a lawsuit for breach of contract.


Signing a buyer’s agency agreement is something you should expect when working with a real estate agent. Before making a commitment, ask yourself the following questions:

  • Do you trust the agent?
  • Do you comprehend everything in the agreement?
  • If things don’t work out, is there an exit plan?

In the meantime, make sure to check out our real estate investing tools to ensure you are making smarter decisions. Start out your 7-day free trial with Mashvisor now.

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Charles Mburugu

Charles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He loves writing on topics that help real estate investors and agents make better choices.


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