Simply put, a buyer's representation agreement is a contract signed between a prospective home buyer and a real estate brokerage for the right to represent them in a real estate transaction.

It will outline the terms of the agreement, including time frame and the services that the brokerage agrees to render the client during that time, which is typically 3 months by default.

Some Realtors® will request a buyer's representation agreement before showing houses, while others prefer to wait until a customer is ready to make an offer on a property. It is up to you and your chosen REALTOR® to decide when to sign.

Why Sign a Buyer’s Rep Agreement?

Many buyers are reluctant to sign a contract, fearing being bound to a particular brokerage or agent or pressured into buying a home they don’t want. While it may seem intimidating, the buyer's representation agreement does not force you to buy and provides you, as the client, with a number of benefits. We’ll talk about a few of these benefits below.

1. You Will Become a Client Instead of a Customer

Clients and customers are separated by one main difference — a contractual relationship. When you sign a buyer's representation agreement with your REALTOR®, you become their client and they are contractually bound to act in your best interest.

Without that document in place, your Realtor®’s legal obligation would be to the seller. According to the Texas Association of Realtors®, Realtors have a higher ethical obligation to their clients to “protect and promote their interests.”

Real estate transactions are subject to a wealth of rules, and, as much as they might want to help you, there are some things the REALTOR® you are working with is not legally allowed to tell you unless you are a client.

Your REALTOR® will also be able to provide you with additional services not legally available to customers, such as a Broker’s Price Opinion (BPO) and to negotiate on your behalf during the purchase process.

For those outside the industry, the distinction of “client” over “customer” may seem a small one, but it can have a large impact on your real estate transaction and your confidence in the final outcome.

2. All Expectations Will Be Clearly Outlined

The home buying experience can be overwhelming, and a buyer’s representation agreement offers peace of mind by clearly outlining all expectations both you and your REALTOR® have for each other throughout the process. ​

Your chosen REALTOR® will go over the agreement with you and all of the services they will perform as your buyer agent. This simple step will clear up any possible misunderstandings upfront and you will be able to proceed with confidence.

“Putting myself into the shoes of a buyer, one thing I don't want to worry about is who has my interests in mind,” Reagan Williamson, Managing Broker, pointed out. “When expectations are discussed and clearly set, upfront, as to the client/REALTOR® working relationship, I can focus on finding the right house and my REALTOR® can focus on properly representing me as their client."

3. You Will Work With, and Get to Know, One Person

Talking to five different people about five different homes can be confusing and it can be hard to compare homes listed by different brokerages if you aren’t familiar with real estate terminology. A buyer's representation agreement means that you have one person to speak to, no matter what the question.

The rapport you have with your real estate agent will put you at ease, and they will be able to guide you with their years of experience. Always be sure to meet with your REALTOR® before you sign any contract with them.

Realtors, likewise, will want to ensure a good fit before moving forward. “I try to develop the relationship with the person first, so that they don’t feel trapped into a contract” said Jeff Shaffer, Realtor. “Then, when I know we work well together, I ask them to sign the agreement so that I am able to act in their best fiduciary interest.”

Having one person to guide you through the process, who is acting in only your best interest, will make your home search significantly less stressful.

4. It Protects Your Rights As a Client

Licensed Realtors are bound by a code of ethics, holding them to the highest standard of behavior in all steps of the real estate transaction. According to Article 1 of the Code of Ethics, “When representing a buyer, seller, landlord, tenant, or another client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.”

If you feel you were not properly represented during the transaction, your status as their client will afford you recourse unavailable to customers. While these situations are rare, knowing that you are protected by these rules will give you peace of mind.

5. It Guarantees Your Agent Will Get Paid By the Selling Broker

REALTORS® work exclusively on commission and are paid by the seller upon the sale of a home. If you are working with an agent and are pleased with his or her diligent work, make sure you sign a buyer’s representation agreement to ensure they will get paid by the selling broker.

“After all the work that they do, if the REALTOR® doesn’t have a signed buyer's representation agreement, then the company that has the listing may not pay the REALTOR®,” explained Judy Smith, Sales Manager.

“It’s the only legal document that guarantees a buyer’s agent is going to get paid.” While it may not affect your bottom line, a buyer’s agent will spend hours helping you and will feel much more comfortable spending that time if there is an agreement in place so that they can be compensated for their efforts.

Do I Have to Sign a Rep Agreement?

While there are many benefits to signing a buyer’s representation agreement, the Texas Association of Realtors® affirmed that it is not required by law in Texas. However, many brokerages require their agents to obtain a signed agreement before they can submit an offer on their behalf.

This is designed to protect both the client and the brokerage by clearly outlining services and expectations. The Code of Ethics & Standards of Practice also encourages that they, “for the protection of all parties, assure whenever possible that all agreements related to real estate transactions are in writing.”

Can I Break The Agreement, If Needed?

If your relationship with your REALTOR® sours or you feel uncomfortable, or simply want to put your home search on hold, you can easily terminate your buyer’s representation agreement at any point for any reason. All that is required is a notice, in writing, stating you wish to terminate.

You can also request to work with a different agent within the brokerage if you feel another person would be a better fit. Buyer’s representation agreements are officially between the home buyer and the brokerage, so any brokerage agent can fulfill those obligations. Buyer’s representation agreements are legal contracts, but that doesn’t mean you will be stuck working with a person you don’t wish to.

Variations in Buyer’s Rep Agreements

There is a standard model that all buyer’s representation agreements follow. They are typically 1-4 pages in length and stipulate the time frame of the agreement and the services your agent agrees to render during that time. The Texas Association of Realtors (TAR) has a default agreement for all of its members to use, which can be found here.

Some brokerages have drafted their own customized buyer’s representation agreement for their agents to use. These are designed to best cater to their customer base and tend to be shorter than the TAR form.

That being said, nearly all aspects of the buyer’s representation are negotiable and can be changed to suit your needs during a home search. If the time frame listed in the agreement doesn’t work for you, feel free to ask for a shorter or longer period.

You can also ask to specify the price range, property type, or area you are searching for, any of which will further limit the contract. You can then work with a different agent on transactions outside those parameters if that is your wish.

Other Considerations

There are a few things to keep in mind when you are considering signing a buyer’s representation agreement. First, make sure the person representing you is a licensed REALTOR®. They are bound by the Code of Ethics & Standards of Practice and have mandated continuing education every year to ensure they are up to date on all new real estate laws and regulations.

Secondly, make sure you meet your REALTOR® in person, or via video conference before you sign to ensure you are comfortable and work well together. Don’t be afraid to speak to several different Realtors® before deciding on which one to move forward with. But, before you start looking at houses, choose one REALTOR® to assist you to avoid any confusion or issues.

Finally, once you have signed a buyer's representation agreement, direct your questions and requests to your REALTOR® only and allow them to act on your behalf. Let them contact any selling agents with questions or show you properties you are interested in. If you go to an open house, make sure you let the agent hosting know that you are already being represented.

A buyer's representation agreement may seem like just one more thing to sign in the real estate transaction process, but it is designed to protect you and ensure you have the best possible real estate experience. You will reap the benefits of your REALTOR®’s experience and expertise, and buy with confidence knowing that your best interests are being promoted.

Once you have chosen your REALTOR®, be sure to read our 10 Dos and Don’ts for Homebuyers to make the most of your house hunting experience. If you are looking for your first home, we have a First Time Homebuyers Guide to walk you through the entire process.