Buyer Agreements

Buyer Agreements — Agency & Contracts > Exam relevance: Buyer agreements are a high-priority topic within the ~20% "Real Estate Contracts and Agency" exam weight. Expect multiple questions testing when a buyer agreement is required, what it must contain, and how it differs from other agency relationships. --- ## Why Buyer Agreements Exist When a salesperson works with a buyer, the law wants to make crystal clear *who that agent represents* and *how they get paid*. Without a formal agreement, a buyer might assume the agent is "on their side" while the agent is actually legally obligated to the seller. A buyer agency agreement (also called a buyer representation agreement) solves this by creating an explicit, written agency relationship between the broker and the buyer. --- ## The Mandatory Buyer Agency Agreement — August 17, 2024 This is the single most testable fact in this topic: > Effective August 17, 2024, New York law requires a written buyer agency agreement to be signed BEFORE a licensee shows any property to a buyer. This is not optional and not something you can do "at closing" or "later." If you show a property first and hand over the agreement afterward, you have violated the rule. ### What the Agreement Must Include The written buyer agreement must clearly state: - Compensation terms — how the broker will be paid and in what amount - The scope of representation — what the agent will do for the buyer - The duration of the relationship ### Why This Matters for Compensation Historically, the buyer's broker was paid by the seller (via the listing broker's commission split). Post-August 2024, the buyer's agent compensation must be…