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Buyer Agency Agreement: Definition And Explanation

March 01, 2024 6-minute read

Author: Miranda Crace


If you’re ready to embark on the home buying journey, you’ll probably want to have an experienced real estate professional by your side. A buyer’s agent – the name for a real estate agent representing the home buyer – can help you navigate the ins and outs of home buying, from house hunting to closing on your dream home.

One way a buyer’s agent defines the terms of your working relationship together – including their duties, the duration of the partnership and commission from the home sale – is through what’s known as a buyer agency agreement.

Let’s explore exactly what a buyer agency agreement is, how this contract works and whether the terms of the contract can be negotiated between the home buyer and the agent.

What Is A Buyer Agency Agreement?

A buyer agency agreement, also sometimes called a buyer representation agreement or a buyer-broker agreement, is a contract between a home buyer and a real estate agent that outlines the terms and conditions of their working partnership. The agent could also be a REALTOR® (a real estate professional who’s a member of the National Association of REALTORS®) or a broker.

How Does A Buyer Agency Agreement Work?

Upon signing the contract, the home buyer agrees to work with the real estate agent until they purchase a property proposed by the agent, or the contract expires. If a real estate transaction takes place, the real estate agent receives a commission based on the home sale price. The commission is paid by the buyer, the seller, or both, at closing.

A buyer agency agreement provides some transparency for the buyer and the agent, so both parties know exactly what to expect from the other over the duration of their partnership.

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Types Of Buyer Agency Agreements

The actual name for a buyer agency agreement contract can vary, but there’s a key difference between the types of arrangements you should be aware of – and that difference is exclusivity. Your buyer agency agreement will either be an exclusive or nonexclusive contract.

Here’s the difference.

Exclusive Buyer Agency Agreement

An exclusive arrangement means you’re solely represented by one real estate agent and not allowed to hire different agents during the home buying process. This is the most common form of a buyer agency agreement contract.

Nonexclusive Buyer Agency Agreement

A nonexclusive agreement means you’re allowed to recruit other real estate professionals to help you buy a house. This type of buyer agency agreement can either be a right-to-represent or a not-for-compensation contract.

A right-to-represent contract ensures compensation will be paid to the real estate professional if the professional suggests the house the buyer decides to purchase or if they represent the buyer. A not-for-compensation contract states that the real estate professional won’t be compensated.

The buyer (or seller) pays the agent or broker a commission in a nonexclusive right-to-represent contract, but the buyer isn’t obligated to do so in a nonexclusive not-for-compensation agreement.

What Are The Terms Of A Buyer Agency Agreement Form?

Before entering into any contract, it’s important to fully understand the terms you’re agreeing to abide by. Let’s walk through some conditions you may encounter in a buyer agency agreement.

Agent Duties

This section of the buyer agency agreement outlines the expectations of your real estate agent. Their responsibilities might include locating potential properties and open houses, submitting and negotiating home offers and helping with paperwork when you close on a house.

Your agent may also be able to assist you with the home loan process, from comparing mortgage lenders to understanding the types of mortgage options available to you.

You hired your agent to represent your best interests during the home buying process, so they can also serve as a support system as you search for your dream home.

Term Length

Your buyer agency agreement will state the duration of time that your working partnership with the real estate agent or broker is valid. The agreement can extend anywhere from a few months to upward of a year. But just like with any of the conditions of the buyer agency agreement, the term length is generally negotiable. So, be sure to talk with your agent about the time frame you’ll be requiring their expertise.

Dual Agency

Whether your real estate agent is working as a dual agent is a condition typically disclosed in a buyer agency agreement. Dual agency means the real estate agent represents both the home buyer and the seller in a real estate deal. There’s potential for dual agency to create a conflict of interest between a buyer and seller because the agent helps lead negotiations between the two parties and wants the best outcome on both sides.

How Does Dual Agency Work?

A dual agent also receives the full commission from a real estate transaction, as opposed to splitting the commission evenly between a buyer’s and seller’s agent (also called a listing agent). This can be a financial incentive for the agent to see the entire transaction to completion.

Proceed with caution if your contract includes a dual agency clause. If you’re looking for sole representation, you may be able to negotiate this section with your real estate agent to better suit your needs.


As mentioned already, exclusivity is a key component of your buyer agency contract. If your contract is exclusive, you can only buy a house with the real estate agent or brokerage firm you hired and signed with.

If you signed a non-exclusive contract, make sure you understand the terms of your working relationship – including the extent to which you can work with other real estate professionals, what commission looks like and whether you can demand sole representation (or single agency, as opposed to dual agency) from an agent.


This section of the buyer agency contract defines how compensation is handled. During a real estate transaction, the buyer’s and seller’s agents are paid a commission based on the property’s sale price. The average total commission paid to the real estate professionals involved in the home sale is typically 5% – 6%, but it can vary with market conditions. The buyer, the seller or both parties will pay this commission percentage when you close on the house.

If only the buyer’s and seller’s agents are involved in the transaction, these two parties usually split the commission 50/50. Of course, if the buyer is also working with a brokerage firm (as outlined in your buyer agency agreement), they may also receive a portion of the commission.


If you or your real estate agent are dissatisfied with the partnership, most buyer agency agreements outline how to end the arrangement. You might have to meet certain conditions – like giving prior notice or writing a letter of termination – to break the agreement. Be sure to carefully review the termination clause in your contract in the event you want to end it and work with another real estate professional.

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What’s The Difference Between A Real Estate Agent And A Broker?

One point worth noting is how a real estate agent and a real estate broker are distinct: Though they can be used interchangeably when describing buyer agency contracts, the two play different roles. A real estate agent identifies property listings, organizes open houses and is generally your support system during the home buying process. The broker manages a real estate firm and likely employs your real estate agent.

Depending on the terms of your buyer agency agreement, purchasing a house may involve compensating both the agent and the broker if both parties are involved. Again, this depends on the terms and conditions of your contract.

Can You Negotiate The Terms Of A Buyer Agency Agreement?

You usually have the opportunity to negotiate the conditions outlined in your buyer agency agreement. For example, you may only be interested in viewing houses in a specific location or price range. You can speak with your real estate agent about having these specifications incorporated into your buyer agency agreement to ensure you’re on the same page.

You may also be able to negotiate other terms in the buyer agency agreement. These may include the duration of the partnership, whether you want sole or dual agent representation, and other expectations of your agent during the process.

The Bottom Line

A buyer agency agreement is a contract between the home buyer and the real estate professional(s) representing the buyer during the home buying process. It can be an exclusive or non-exclusive partnership and includes various terms and conditions, such as the agent’s responsibilities, the duration of the working relationship and commission stipulations.

Always read the fine print before signing a buyer agency agreement so you’ll fully comprehend the expectations of you and your real estate agent in the days ahead.

Are you ready to begin your home buying journey? Apply for a mortgage or talk with our team of Home Loan Experts today. We’ll help you get a jump-start on the process of finding your dream home.

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years. Miranda is dedicated to advancing financial literacy and empowering individuals to achieve their financial and homeownership goals. She graduated from Wayne State University where she studied PR Writing, Film Production, and Film Editing. Her creative talents shine through her contributions to the popular video series "Home Lore" and "The Red Desk," which were nominated for the prestigious Shorty Awards. In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee.