Why You Now Have to Sign a Buyer Broker Agreement Before Touring Homes

For most of my career, buying a home didn't cost the buyer anything directly. The seller paid the listing agent, the listing agent split part of that with whoever brought the buyer, and the buyer never thought twice about it. That changed in August 2024, after a national lawsuit settlement, and a lot of buyers — and some agents — still haven't fully adjusted.

How it used to work

When I took a listing, the agreement with the seller was simple: I'd list it for, say, 5%, and the agreement specified that I'd offer half of that — 2.5% — to whichever agent brought the buyer. That offer was published right on the MLS listing. Buyer's agents could see exactly what they'd be paid before they ever showed the house, and the buyer never had to think about it.

What changed, and when

In 2024, a class-action lawsuit against the National Association of Realtors was settled. As part of the settlement, the practice changes went into effect on August 17, 2024. The core change: you can no longer advertise buyer-agent compensation on the MLS. That offer of "2.5% to buyer's agent" simply isn't allowed to live on the listing anymore.

The settlement also requires buyers to sign a written buyer broker agreement before touring homes with an agent — spelling out up front what that agent is being paid and by whom.

What this actually means in practice

The money usually still comes from the same place — most sellers still expect to cover both sides, because that's what makes their listing competitive. What changed is how it gets there.

Now, when I take a listing, instead of offering 5% split two ways automatically through the MLS, I typically list at 2.5% to the seller and let the buyer's offer ask the seller to also cover their agent's fee. It usually nets out to the same place — it's just structured differently, and it's negotiated deal by deal instead of published up front.

Where this creates a real problem for buyers

This is the part I make sure every buyer understands before they sign anything: if you sign a buyer broker agreement promising your agent, say, 2.5%, and your agent only gets 2% from the seller in the offer, you can be on the hook for the missing 0.5% out of your own pocket — unless your agreement says otherwise.

I've seen this go badly. I worked a transaction where the buyer's agent hadn't done his job — never visited the property, missed the inspection, missed the closing — and then tried to collect an extra 1% directly from his own client because the seller only agreed to cover part of his fee. The buyer had no idea he was on the hook for that until escrow asked for written instructions to hold the money back. It's all legal — escrow did everything correctly — but the buyer was blindsided because nobody had explained the agreement clearly when he signed it.

The way I handle it for my own buyers: if we ask the seller for 3% and they counter at 2.5%, we amend our buyer broker agreement to match what we actually got. My buyers never get asked to make up a shortfall, because I structure the agreement so there isn't one.

What to ask before you sign anything

If you're about to tour homes with an agent and they hand you a buyer broker agreement, ask directly:

• What percentage am I agreeing to pay, and who is actually expected to pay it — me or the seller?
• If the seller offers less than that number, am I responsible for the difference?
• Can this agreement be amended once we know what the seller is actually offering?

Those three questions tell you a lot about whether the agent is looking out for you or just covering themselves.

If you're starting a home search and want someone who'll walk you through exactly what you're signing before you sign it, reach out — that's the whole point of doing this right.

This is general information about how these agreements typically work, not legal advice. Buyer broker agreements vary — read yours carefully and ask your agent (or an attorney) to explain anything that isn't clear before you sign.