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Why Buyer's Agency Agreement is Important?

Buyer's Agency Agreement is broker's exclusive right to represent his client, buyer. There may be exclusive or non-exclusive agreements between buyer and buyer's broker. Non-exclusive buyer agency relationship is where a buyer can engage multiple brokers to work for the buyer. Exclusive agency is where buyer is obligated to work with only one broker.

The Importance of Buyer Representation Agreement

There are many good reasons to use a buyer representation agreement, including addressing broker compensation. As you may know, the compensation for both seller's and buyer's broker is offered by seller in the listing agreement. That compensation can be enough by buyer's broker or subject to change and negotiation. Negotiation about buyer's broker commission can be stated in Purchase and sale agreement but can be also made early on in the process with the Buyer Agency Agreement, which is advisable.

filling out a form

The purpose of using Buyer's Agency Agreement is to ensure that the buyer understands the buyer brokerage firm compensation and to create an opportunity for discussion and negotiation. Using a buyer representation agreement early in the process is beneficial to both the broker and buyer in setting expectations, negotiating compensation, and discussing the broker's services.

The compensation section of the form address compensation paid by seller and compensation paid by buyer. The form includes a new section where, if the compensation offered by seller is greater than the compensation agreed to by buyer, the parties direct that portion of the compensation to the buyer brokerage firm, the buyer, or the seller. The “tail provision” obligates a buyer to pay compensation under certain circumstances after expiration of the agreement.

Washington State is making a change to the Law of Real Estate Agency Pamphlet that will require Brokers to use a "Buyers Agency Agreement" when representing a Buyer. The State is changing the current information in this pamphlet regarding agency relationship to buyer agency agreement hoping to reduce the number of buyer complaints. I believe this change will help buyers understand the importance to signing a Buyer's Agency Agreement and make it easier for Brokers to use these agreements.

Signing contract

In the past it had been acceptable to use NWMLS Form 42 "Agency Disclosure" when representing a buyer, seller or both. However, the State now requires a more detailed agreement that clearly outlines the duties of a Buyer's Broker and the amount of compensation the Broker will receive. The NWMLS Exclusive Buyer's Agency Agreement or the Non-Exclusive Agreement have been considered hard to explain or unacceptable to Buyers.

Once the Agreement is signed, the buyer can expect from the Broker duties that follow.

  • To be loyal to the buyer by taking no action that is adverse or detrimental to the buyer's interest in a transaction;

  • To timely disclose to the buyer any conflicts of interest;

  • To advise the buyer to seek expert advice on matters relating to the transaction that are beyond the agent's expertise;

  • Not to disclose any confidential information from or about the buyer, except under subpoena or court order, even after termination of the agency relationship; and

  • Unless otherwise agreed to in writing after the buyer's agent has complied with RCW 18.86.030 to make a good faith and continuous effort to find a property for the buyer; except that a buyer's agent is not obligated to:

    • seek additional properties to purchase while the buyer is a party to an existing contract to purchase; or

    • show properties as to which there is no written agreement to pay compensation to the buyer's agent.


It is in the best interest of both parties involved to have their expectations set in writing before any misunderstanding arise.


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