What is a buyer-broker agreement and do I have to sign one in Virginia?

Why this changed in 2024

Until late 2024, most buyers in Virginia never signed anything until they were ready to write an offer on a specific house. Buyer-side compensation was paid by the seller through the listing agreement — invisible to the buyer, never discussed directly. That changed when the National Association of Realtors settled a class-action lawsuit, and the new rules required all buyers to sign a written agreement with their agent before the first showing. The agreement also had to state the agent's compensation explicitly, in advance.

The intent of the change is transparency: buyers should know who's representing them and what that representation costs, in writing, before they commit to working with an agent. It also reflects a broader market shift toward unbundling — the seller and buyer can now negotiate agent compensation separately rather than through a single listing-side commission.

What's actually in the agreement

Every Virginia buyer-broker agreement covers roughly the same six things, regardless of which brokerage you sign with:

• The parties. You as the client, the agent you'll work with, and the brokerage the agent works under. The brokerage is technically who you're hiring; the agent is assigned to you.
• Scope of services. What the agent will do — search for homes, schedule tours, advise on offers, negotiate, manage the transaction to closing.
• Exclusivity. Whether you're working with this agent exclusively for the term, or non-exclusively (you can have other agents working with you too). Most agreements are exclusive.
• Geographic area and property type. What the agreement covers — for example, "single-family homes in Roanoke County and Montgomery County, Virginia."
• Term. How long the agreement lasts. Typical terms range from 30 days to 6 months. Shorter is generally better for the buyer in case the relationship isn't working.
• Compensation. How the agent gets paid, including the percentage or flat fee, who's expected to pay it, and what happens if the seller's offer doesn't fully cover the agent's fee.

How compensation actually works now

This is the part that confuses most buyers, so let's be precise. The buyer-broker agreement specifies the agent's fee — often 2.5%–3% of purchase price, though it's fully negotiable. That fee is your obligation as the buyer under the contract.

In practice, the seller still offers to pay the buyer's agent in the vast majority of Virginia transactions. When the seller's offer covers the full fee in the buyer-broker agreement, the buyer owes nothing out of pocket — the same outcome buyers got under the old system. When the seller's offer is less than the agreed fee, the buyer has three options: (1) negotiate with the seller to cover more, (2) ask for a price reduction so the difference can be rolled into the loan, or (3) pay the difference at closing.

A good agent will walk through this math before you write any offer, so there are no surprises at the settlement table.

What to look for before you sign

A few things to verify in any buyer-broker agreement you're handed:

• The term is reasonable — 30 to 90 days is normal for a new relationship. Six months or a year is asking a lot up front.
• The geographic area matches where you actually want to look. Don't sign an agreement that covers all of Virginia if you only want to buy in Roanoke County.
• The compensation number is one you understand and can live with in the worst case.
• There's a termination clause that explains how you'd end the relationship if it isn't working.
• The brokerage and agent are clearly identified — agent's license number, brokerage name, principal broker's contact.

Can you negotiate the terms?

Yes, everything in the agreement is negotiable. Common things to negotiate: the percentage, the term length, the geographic scope, exclusivity, and the conditions under which you can terminate early. Like any contract, what gets signed reflects what was agreed — push on what matters to you.

One important note: agent compensation is negotiable, but agents are also running a business. Some will hold their fee firm; others will adjust. As a buyer, your leverage is highest before you sign — once you're under agreement, renegotiation is harder.