A new law requires a signed buyer’s agreement, but the changes make the buyer and Realtor relationship stronger and more transparent
Real estate agents in Washington State are now required to enter into a signed agreement with buyers prior to working together to ensure the buyer understands the terms of the firm’s representation and compensation. Although a form of the buyer’s agreement has always existed, previously this was only required for sellers. So what do these changes really mean for a buyer working with an agent? Here’s our breakdown of how it works, and why ultimately we see it as a big benefit to buyers and sellers.
What is the Buyer’s Brokerage Service Agreement (BBSA)
Essentially the Buyer’s Brokerage Service Agreement defines the terms of the working relationship between a buyer and real estate agent. In the past, it was possible for an agent to tour a buyer through homes and even write up an offer without a signed buyer’s agreement. As of January 1, 2024, Washington state requires this agreement be signed by a buyer BEFORE an agent assists with the homebuying process. Specifically, the agreement outlines:
- The term of the agreement
- The name of the broker appointed to be the buyer’s agent
- The exclusivity of the relationship
- The consent (or not) to limited dual agency situations
- The amount the firm will be compensated and who will pay the compensation
The positive impacts of the Buyer’s Brokerage Service Agreement
By signing this agreement with all of our buyers, it allows for transparency and clarity at the onset of a relationship. We appreciate that this will always take place when we first meet with a buyer, so that our services and compensation are clearly outlined and understood. We welcome this change and believe it strengthens our working relationship with our clients.
Secondly commissions have always been and will continue to be negotiated through transparent conversations with our clients. The agreement just assures that conversation will happen at the start of the working relationship to help eliminate any confusion or uncertainty for both parties.
Additionally, sellers retain, as they always have, the discretion to offer compensation to buyer’s brokers. That will continue to be determined through negotiations and a signed seller’s agreement between the seller and their Listing agent.
Are more changes coming from the NAR settlement?
There is a proposed settlement by the National Association of REALTORS® (NAR). While the settlement still requires final approval from a federal court, there are proposed changes to be aware of:
- All states will need to adopt a Buyer’s Brokerage Service Agreement like the one outlined above. Washington state was one of the first states to implement changes increasing transparency around the option of a 0% seller offered compensation as well as statewide mandatory use of the BBSA, so we’re already in compliance with the proposed change.
- Our Northwest Multiple Listing Service (NWMLS) is a private organization that is excluded from the changes as a result of this lawsuit. However, being a forward thinking advocate for both buyers and sellers, our NWMLS may still decide to follow suit and make changes in the listing requirements within the database. One of these changes would be when homes are listed on the (NWMLS) database, they’ll no longer be allowed to advertise the buyer agent’s compensation.
We and our brokerage, Compass, are fully prepared to adopt the changes laid out as part of the settlement. We see these updates as being positive both for our clients and for the brokerage community, as they provide additional transparency and will encourage the most professional agents to thrive.
If you have additional questions about the buyer’s agreement, reach out! We’re happy to answer any of your questions. If you would like to learn more about how we work with our buyers, find out more HERE.
