Nar Settlement Buyer Agreements

NAR Settlement & Buyer Agreements ### Agency & Contracts — National RE Salesperson Exam > Why this matters on the exam: The NAR Settlement (effective August 17, 2024) represents the most significant recent change to real estate practice, and exam writers are actively testing it. Combined with the fact that Contracts (17%) and Agency (13%) together make up 30% of the national exam, understanding buyer agreements is one of the highest-leverage topics you can master. --- ## Overview: What Changed and Why Before the NAR Settlement, buyer's agents were commonly compensated through cooperative compensation offers published on the MLS — a seller's agent would advertise a buyer-agent commission in the listing, and a buyer could tour homes without ever signing a formal agreement with their agent. That model is now prohibited. The settlement fundamentally restructured how buyer-agent compensation works and mandated written buyer agreements before property tours. --- ## Key Concepts ### The Written Buyer-Broker Agreement A buyer-broker agreement (also called a buyer representation agreement) is a written contract between a buyer and a real estate brokerage establishing an agency relationship and defining compensation. Under the NAR Settlement, this agreement is required before touring any property — not just before making an offer. Think of it as the buyer-side equivalent of a listing agreement. Just as a seller signs a listing agreement before the agent markets the property, a buyer must sign a representation agreement before the agent shows homes. The agreement must include three specific elements: | Required Element | What It Means in Plain English | |---|---| | Specific compensation amount | The fee must be a definite figure or formula — not vague language like "whatever…