If you’re thinking about buying a home, you may have heard of a Buyer Representation Agreement. But what is it, and why is it important? Let’s break it down.

What is a Buyer Representation Agreement?

A Buyer Representation Agreement is a formal contract between you (the buyer) and me, your real estate agent. It outlines the terms of our working relationship, ensuring we’re aligned as we search for your next home. In California, this agreement is called the Buyer Representation and Broker Compensation Agreement (BRBC).

Think of it as a way to ensure I’m fully committed to advocating for your best interests—from scheduling tours and negotiating offers to closing the deal and ensuring your escrow period is smooth and efficient. Since sellers sign agreements with their listing agents, it only makes sense for buyers to formalize their partnership with their agents, too!

What Does the Agreement Cover?

1. Timeframe
   We’ll agree on how long we’ll work together, with a maximum term of three months in California, renewable if needed.
2. Geographical Scope
   The areas where we’ll focus your home search, whether that’s a specific neighborhood, city, or region.
3. Agent Compensation
   This section outlines how I’ll be compensated for my services, which we’ll negotiate together. Recent legal changes in 2024 have introduced new options for buyers, making this an important part of the agreement.

How Does Agent Compensation Work?

Agent compensation has always been negotiable, but recent changes have shifted how it’s handled. Here’s what you need to know:

Historically:

• In the past, the seller and listing agent often unilaterally decided the total commission for the transaction (e.g., 5% or 6%). This amount was divided between the listing and buyer’s agents and paid from the buyer’s funds at the close of escrow.
• Buyers often didn’t pay their agent directly. Instead, their down payment and loan funds—handled through escrow—covered the agreed commission, allowing buyers to retain cash for other expenses.

What’s Changed in 2024?

• Commissions for buyer and listing agents are now negotiated separately. The seller no longer determines the buyer agent’s compensation when signing the listing agreement.
• As your buyer’s agent, I’ll work with you to agree on my compensation in our Buyer Representation Agreement.

Your Options:

1. Pay my brokerage directly, outside of escrow.
2. Request that the seller use proceeds from the sale to pay my brokerage at closing (a new option available in the updated purchase contract).

This change gives buyers more transparency and control over how agent compensation is handled, while still allowing flexibility to keep cash on hand for other purchase-related costs.

Why Is the Buyer Representation Agreement Important?

This agreement isn’t just about compensation—it’s about setting clear expectations and ensuring you have a dedicated advocate in your corner. By signing, we establish:

• A clear framework for our goals and how we’ll work together.
• My ability to represent you fully in a competitive market.

When you have an experienced, fully committed agent guiding you, the home-buying process becomes much smoother, more transparent, and less stressful.

Have Questions? Let’s Chat!

The Buyer Representation Agreement is here to protect and empower you. If you’re curious about how it works or want to discuss your options, I’m happy to answer any questions. Let’s make your home-buying journey as seamless and successful as possible.