If you’re planning to buy a home in 2025, there’s a new form you’ll need to sign before visiting any properties: the Buyer Representation & Broker Compensation otherwise known as a Touring Agreement in real estate. It’s a nationwide change that’s catching some buyers by surprise, but understanding it can help you make smarter, more informed decisions in today’s housing market.
In this post, we’ll explain what the touring agreement is, why it matters, and the benefits and limitations every buyer should know before house hunting.
What Is a Buyer Representation & Broker Compensation (aka Touring Agreement) in Real Estate?
A Buyer Representation & Broker Compensation agreement is a document homebuyers must sign before a licensed real estate agent can legally show them a home. This agreement became standard after a new federal real estate law was passed in August 2024. The law changed how commissions are shared between agents, making this new step necessary in the home touring process.
Why Was This Agreement Introduced?
Before the law changed, sellers would list their homes and clearly state how much they were offering to pay the buyer’s agent commission, typically 2.5%. This information appeared in the Multiple Listing Service (MLS) and made it easy for all parties to see who was paying what.
Now, that commission offer is no longer visible in the MLS. Buyers and their agents won’t know if the seller is covering the commission until after an offer is submitted. That’s why the Touring Agreement in real estate now exists: to clarify that if the seller doesn’t pay, the buyer will be responsible for the listed commission (typically 2.5%) they sign with the buyer’s agent before touring any homes.
How the Buyer Representation & Broker Compensation Agreement Works
Before a buyer tours a property, your agent will ask you to sign the touring agreement. If you don’t sign the agreement legally the agent is NOT allowed to show you any properties.
Here’s what it says in plain English:
- If the seller refuses to pay the buyer’s agent commission, you, the buyer, agree to cover it, usually 2.5%, depending on your market.
Let’s say you’re making an offer on a $1 million home. If the seller chooses not to pay the buyer’s agent, you would pay the 2.5% commission (in this case, $25,000). But don’t panic—your agent will likely help adjust the offer to balance out that cost.
Since the law took effect, most sellers are still paying the buyer’s agent commission, but because this isn’t guaranteed anymore, agents are legally required to have buyers sign this form before touring homes.
If you are interested in seeing how this new law impacts real estate in California, check out this post here.
Key Benefits of the Buyer Representation & Broker Compensation Agreement
Here are a few reasons why the Buyer Representation & Broker compensation Agreement (Touring Agreement) in real estate benefits buyers:
- Clear Expectations: It sets financial expectations before you tour, so you’re not caught off guard later.
- Legal Protection: Your agent stays compliant with national regulations, protecting both their license and your transaction.
- Transparency and Trust: It opens the door for honest conversations about fees, commissions, and responsibilities between buyers and agents.
Limitations of the Touring Agreement
While helpful, the agreement has a few downsides that buyers should understand:
- Possible Extra Cost: If the seller won’t pay the commission, you may need to factor that into your budget.
- Uncertainty: Without upfront commission info in the MLS, you’re left guessing until after submitting an offer.
- Buyer Hesitation: Some buyers may feel hesitant about signing anything so early in the process, especially when they’re just getting started.
So far, it’s rare to see sellers refuse to pay the buyer’s agent. But because this is a nationwide law, agents across the U.S. are following new procedures, and signing a Touring Agreement is now part of the process.
Buyer Representation & Broker Compensation Agreement in Real Estate = Clarity + Compliance
The Buyer Representation & Broker Compensation Agreement in real estate is a new but necessary tool to help buyers and agents navigate post-2024 commission rules. It provides clarity, ensures legal compliance, and protects both parties in an uncertain commission environment.
If you’re planning to buy a home this year, don’t let this form slow you down. Just ask your agent to explain it, sign it confidently, and start exploring properties knowing your bases are covered.
Ready to Tour Homes?
Connect with a licensed real estate professional, like Sonoma Realtor Emily Martin, who can guide you through the buying process and explain the Buyer Representation & Broker Compensation Agreement in simple terms, so you can focus on finding your dream home.
Get to know Sonoma’s best realtor, Emily Martin, and 5 reasons to work with her in this post. With her extensive background in luxury marketing and real estate, Emily offers a unique combination of skills that sets her apart from other realtors.
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