Buyer Agency Agreement: What It Is & How It Works


A buyer’s agency agreement is an agreement between the buyer of a home and a real estate broker or agent. The agreement covers the relationship between the buyer and the buyer’s agent, how the agent or agency will be compensated, the duration of the term, and the exclusivity of the agreement. It’s crucial to understand how a typical buyer’s agency agreement is structured so that you can protect yourself throughout one of the biggest purchases of your life.

Whether it’s the glistening skyline of New York City, the mountains of Durango, Colorado, or the peaceful Westlake area of Hanoi, Vietnam, there are amazing opportunities to purchase property throughout the world. In most cases, no matter the location, people will opt for a real estate agent to help them find a home or investment property that’s suitable for them. In the U.S. market, many prospective home buyers will sign what’s called a “buyer’s agency agreement” to lock in their agent, or agency, of choice. (Or just the one that called more than the other guys).

This agreement typically covers the scouting, showing, and closing of a home. It might also contain more legal terms associated with the relationship, such as the ability to terminate or non-circumvention clauses. Just like any industry, real estate has its by-the-book do-gooders, as well as the shady profiteers. A buyer needs to understand this legal agreement to avoid signing something they could regret later.

Buyer agent agreement 101

As mentioned above, the buyer’s agent agreement is the agreement between the prospective buyer and the agent that will represent them in the purchase, otherwise known as the buyers’ agent. The agreement defines the relationship and how the two will work together. Here are some of the terms you should be familiar with in a buyer’s agency agreement.

Exclusivity: exclusive or non-exclusive

Exclusivity is going to be the main goal for any agent looking to take on a new potential buyer. Exclusivity means that you will work exclusively with this buyer’s agent and not be represented by any other agents in the purchase of a home. The real estate market at the time will likely define how hard the agent pushes you for an exclusive buyer agency agreement. For example, if the market is hot, then the agent will probably demand exclusivity to manage their time and risk/reward philosophy. If the real estate market is slow, then the buyer’s agent might not ask you to sign one, as buyers are in short supply.

Basic terms of the agreement

What is the buyer looking for? If they’re searching for a place in Denver, Colorado, are they looking for a single-family home in the 80224 zip code or a city-center apartment in LOHI? The terms lay out what the buyer wants and what the real estate agent handles on their behalf. For instance, some real estate agents have agreements that stipulate they will assist on an A-to-Z level throughout the closing, whereas others won’t.

Time frame

The time frame of the buyer’s agency agreement deals with two issues: how long they will look for homes on your behalf and the exclusivity period. For example, if you signed a buyer’s agency agreement that lasts until December 2022, and there is a hot property listed in February of 2023, then that agent is not obligated to tell you about it. The exclusivity time frame spells out how long you are exclusive with that agent. You could be in a situation in which you are only exclusive for a few months, but the agent agrees to represent you on a non-exclusive basis for the remaining months of the agreement.


Most real estate agents will work on commission. That’s not to say that there aren’t real estate agents working on more of a hybrid basis, but the commission in real estate is king. Where does this commission come from? In most cases, it’s paid by the seller’s agent to the buyer’s agent. They split the commission depending on how much work or access the other one has. In some cases, however, the buyer’s agent might charge an additional commission directly to the buyer as a “success fee.” However, this is much more common in other parts of the world than in the United States.

Pro Tip

In the U.S., a typical commission for an already built or occupied property is around 5-6%. This is not set in stone, however, and can vary by market. An agent can even ask for more commission to close a deal. Furthermore, if a developer is selling property directly through an agent, then the commission can also be higher or lower.

Termination clause

The termination clause in a buyer’s agency agreement is like a termination clause in any contract. Like most clauses, it explains how the contract will terminate and how it will affect the two parties’ relationship going forward. In many cases, it will require that something is made in official writing to terminate the contract.

Non-circumvention clause

A non-circumventing clause, also known as a separate non-circumvention agreement, or NCA, is a clause that allows the agent to protect themselves. If the agent introduced the buyers to some properties, the buyer is not allowed to circumvent them by going directly to the selling/agent or seller. In most cases, this clause can be enforced long after the original agency agreement has lapsed. For instance, if you saw a property through an agent, then three years later went directly to the owner, there is legal precedent for the agent to sue you with an NCA.

Buyer’s agency agreements and dual agency

A dual agency is not as commonplace as it once was and is actually illegal in some states. A dual agency means that one agent represents both the buyer and the seller in the transaction. Most of the time, it’s not an individual agent but an actual “agency” that represents the buyer and the seller. You could sign an agreement with an agency and have different agents working for both the buyer and the seller.

The reason this is illegal in some states is that it represents a conflict of interest. Here are the states where dual agency is illegal.

INSERT MAP, Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, Wyoming

The buyer’s agent should be acting in the interests of the buyer, and the seller’s agent should be acting in the interests of the seller. According to Jamie M. Curtis, an agent for Sotheby’s International Realty who has acted under the terms of a dual agency before, you need to know the potential pitfalls.

Buyers and sellers have to take a lot of the initiative for the dual agency to work well. This is why it is not ideal in most transactions. As agents, we owe a duty of loyalty to our clients, so it is difficult to remain objective when there are opposing forces. Most listing agents will offer a commission reduction to sellers if they can procure the buyer. This is why sellers are willing to forgo a higher level of service to save money. But what they might be saving in commissions at the end of the day could result in a lower purchase price, so it’s important for everyone to be aware of what they are giving up in dual agency.”

Although not ideal, a dual agency can have some advantages as the agent wants to close the deal no matter what.

How to find a home without a buyer’s agency agreement

If you don’t want to sign an agreement, your phone might be ringing off the hook with offers to represent you. But if you feel confident that you don’t need a buyer’s agent, you can go it alone. There are a few options for obtaining a home without signing an agreement, including:

Go directly to a listing agent

If you know a listing agent or see a sign you like on the side of the road, you could buy through them without having to sign a buyer agency agreement or a buyer broker agreement. Buyer’s agents aren’t absolutely crucial to the process, and if you know a listing agent with a good selection of properties, you can go directly to them. It’s certainly better for that agent, as they get to keep all of the commission rather than splitting it with the buyer’s agent.

Looking to purchase a home and think you have your mortgage all lined up? You might think again after you check out some alternative options below.

Buy directly from the builder/developer

If you are building a house or buying an off-the-plan flat in a development, then you are buying directly from the person who is building something that hasn’t existed before. In this case, you could find the developer’s website and contact them directly. They might be required to have a listing agreement with a listing agent handling all of their sales, but you’ll be off the hook for the buyer’s agency agreement.

Pro Tip

Most people use a buyer’s agent because that person has relationships with other agents, knowledge of neighborhoods and pricing, access to the MLS listings, and negotiation skills. If you go without one, you may struggle without a professional to help you.

Buy at foreclosure/auction

Foreclosed and auctioned properties are opportunities to nab a great value without having a buyer’s agent show you properties. Many times, this will take place in an auction setting in which you have a guy with a gavel accepting bids on the home. You might face other issues with buying a home at auction, such as property quality and possible encumbrances, but you don’t need a buyer’s agent to facilitate the transaction.

Buy from someone you know

If you buy the condo that your childhood friend grew up in, you might not need an agent on the seller’s side or the buyer’s side. You should have a title company and possibly a real estate attorney to ensure that the transaction is legally above board, but agents are not needed. This is more geared towards people looking to invest in property rather than looking for their forever home.

Different markets have different quirks

It’s worth noting that all real estate markets will have their own quirks with buyer agency agreements. Take the famous New York City market for example. According to Nicole Beauchamp, a broker for 20 years with a focus on the NYC market, “It is worth noting that people can often confuse agency disclosure forms with buyer agency agreements. In NYC, we have some disclosure forms that buyers and sellers must sign. One of them is around agency so that the buyer/seller understands the various forms of agency and the various forms of dual agency as well.”


What are the essential elements of a buyer agency agreement?

A buyer agency agreement is effectively an agreement defining the working relationship between a buyer and a buyer’s agent. The essential elements of a buyer agency agreement are basic terms dictating exclusivity, time frame, and commission/payment. Many will also incorporate termination clauses and non-circumvention agreements.

Is a buyer agency agreement required?

No, buyer’s agents and buyer’s agency agreements are not required. In fact, there are several ways you can avoid signing buyer agency agreements and buyer broker agreements.

What type of agreement is most commonly used as a buyer representation agreement?

An exclusive buyer agency agreement is the most common form of the buyer representation agreement.

What’s a major benefit to a buyer if she signs a buyer representation agreement?

The major benefit to the buyer is that she will have an agent tirelessly working for her to find the property she wants, which will earn them a commission. Remember, their family needs to be fed too, and in order to feed that family, they need to close your sale. That starts with finding you the right property.

Key takeaways

  • A buyer’s agency agreement is an agreement between the buyer of a home and the broker or agent they work with. The buyer agrees to have the agent represent them as the “buyer’s agent” in the transaction.
  • The agreement will typically dictate the basic terms, such as exclusivity, time frame, commission/payment, as well as termination clauses.
  • Although dual agency still exists today, it is illegal in some states. This is due to a possible conflict of interest when an agent represents both the buyer and seller.
  • You don’t always need to sign a buyer agency agreement. You can go directly to the listing agent, buy at an auction, buy from someone you know, or buy directly from a developer/builder.
View Article Sources
  1. What is an Exclusive Buyers Agency Agreement? – National Association of Exclusive Buyer Agents
  2. Working with a Buyers Agent – Connecticut Dept. of Consumer Protection
  3. First-Time Home Buyer Guide – SuperMoney
  4. How Realtors Get Paid: Real Estate Commissions Explained – SuperMoney
  5. The Most Common Mistakes of Home Buyers – SuperMoney
  6. 10 Smart Questions To Ask A Real Estate Agent When Purchasing A Home – SuperMoney