Buyer Representation Agreement: What Every Agent Must Know in 2026
The real estate industry underwent a seismic shift in August 2024 when the National Association of Realtors (NAR) settlement took effect. One of the biggest changes? Buyer representation agreements are now mandatory before showing properties. This guide covers everything you need to know for both the real estate exam and your career.
What is a Buyer Representation Agreement?
A buyer representation agreement is a contract between a prospective homebuyer and a real estate agent (or their brokerage) that establishes a formal working relationship. It outlines:
- The agent's duties and responsibilities
- The scope of representation
- The duration of the agreement
- How the agent will be compensated
Why This Changed: The NAR Settlement
In 2024, NAR agreed to major rule changes following class-action lawsuits challenging traditional commission structures. The key changes effective August 17, 2024 include:
Key Rule Changes
- Written Agreement Required Before Touring
- Agents must have a signed buyer representation agreement BEFORE showing any property
- This applies to both in-person and virtual tours
- Open houses are an exception (for now)
- MLS Commission Offers Prohibited
- Sellers' agents can no longer advertise buyer agent compensation on the MLS
- This "decouples" the traditional commission structure
- Compensation Must Be Clearly Stated
- The agreement must specify the exact compensation
- Can be a flat fee, percentage, or hourly rate
- Must be negotiated directly with the buyer
What Must Be Included in the Agreement
A valid buyer representation agreement must contain:
| Required Element | Description |
| ----------------- | ------------- |
| Services Offered | Specific tasks the agent will perform |
| Termination Date | When the agreement ends |
| Exclusivity Type | Exclusive or non-exclusive |
| Agent Role | Whether agent acts as buyer's agent |
| Compensation | Clear fee amount or rate |
| Negotiability Statement | Language stating fees are negotiable |
Types of Buyer Representation Agreements
Exclusive Buyer Agency Agreement
- Buyer works with ONE agent only
- Agent entitled to compensation regardless of how buyer finds property
- Most common type
Non-Exclusive Buyer Agency Agreement
- Buyer can work with multiple agents
- Only the agent who helps purchase gets paid
- Less commitment, less loyalty
Exclusive Agency Buyer Agreement
- Buyer works with one agent
- BUT buyer can find property independently without owing commission
State-Specific Requirements
Texas (SB 1968 - Effective January 1, 2026)
Texas has codified buyer representation requirements into state law:
- Written agreement required before any "substantive action"
- Agent may unlock door WITHOUT agreement
- Agent CANNOT provide advice or negotiate without agreement
- Specific disclosure language required
California
California requires:
- Written buyer representation before touring
- Disclosure of dual agency potential
- Clear compensation terms
Common Exam Questions
Here are sample questions you may encounter:
Question 1
Under NAR rules effective August 2024, when must a buyer's agent obtain a written buyer representation agreement?A. After the buyer makes an offer
B. Before touring any properties with the buyer ✓
C. At the closing table
D. Only if the buyer requests one
Explanation: NAR rules require the agreement before showing properties, either in-person or virtually.Question 2
Which of the following is NOT required in a buyer representation agreement?A. The duration of the agreement
B. The amount of compensation
C. The seller's asking price ✓
D. Whether representation is exclusive
Explanation: The seller's asking price is not a required element of the buyer representation agreement.Question 3
A buyer wants to attend an open house. Does the buyer need a signed representation agreement?A. Yes, always required
B. No, open houses are typically exempt ✓
C. Only if the seller requires it
D. Only for luxury properties
Explanation: Open houses are generally exempt from the written agreement requirement, but agents should still disclose their role.Question 4
Under Texas SB 1968, what can an agent do WITHOUT a signed buyer representation agreement?A. Negotiate offers on behalf of the buyer
B. Provide advice about property values
C. Unlock the door to show a property ✓
D. Recommend a purchase price
Explanation: Texas law allows agents to unlock doors without an agreement, but substantive actions like advice and negotiation require a signed agreement.Question 5
In a buyer representation agreement, compensation must be:A. At least 3% of the purchase price
B. A specific, negotiated amount ✓
C. Paid by the seller
D. The same as the listing agent's commission
Explanation: Compensation must be clearly stated and negotiated. There is no required minimum or standard amount.Key Terms to Memorize
- Buyer Representation Agreement: Contract establishing agent-buyer relationship
- Commission Decoupling: Separation of buyer and seller agent compensation
- Exclusive Representation: Buyer works with only one agent
- Substantive Action: Actions requiring a signed agreement (advice, negotiation)
- MLS Commission Ban: Prohibition on advertising buyer agent fees in MLS
How This Affects Your Exam
Expect questions about buyer representation agreements in these exam sections:
- Agency Law: Understanding agent-client relationships
- Contracts: Elements of valid agreements
- Disclosures: Required disclosures about representation
- Practice of Real Estate: Professional conduct requirements
Tips for Success
- Know the Timeline: NAR rules effective August 17, 2024
- Understand Exceptions: Open houses vs. scheduled showings
- State Differences: Some states have additional requirements
- Required Elements: Memorize what must be in the agreement
- Compensation Rules: Fees must be specific and negotiable
Practice More
Ready to test your knowledge? Try our practice questions:
- Agency Law Practice Questions →
- Contracts Practice Questions →
- Texas Exam Prep →
- California Exam Prep →
Summary
The buyer representation agreement is now a fundamental part of real estate practice. For your exam, remember:
- Required before touring (not just before making offers)
- Must include specific compensation (not vague or "standard")
- Fees are negotiable (must be disclosed in writing)
- State laws may add requirements (like Texas SB 1968)
Understanding these changes will help you pass your exam AND prepare you for the new reality of real estate practice.
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