The real estate landscape underwent a significant transformation in 2024, with the National Association of Realtors (NAR) introducing a new requirement: buyers must sign a Buyer Agency Contract before viewing properties. Spurred by a high-profile class-action lawsuit, this landmark change aims to promote transparency and accountability in real estate transactions.
For buyers, this change represents an opportunity to carefully choose the type of agent they want by their side. Are you looking for a functional agent who handles basic tasks or a fiduciary agent who prioritizes your best interests at every step? Let’s dive into what this means for your home-buying journey and how to make the best choice.
What Is the Buyer Agency Contract?
The Buyer Agency Contract formalizes the relationship between a buyer and their real estate agent, outlining the agent’s duties and responsibilities. Under the NAR’s new policy, this agreement must be signed before any showings can occur. But the significance of this contract goes far beyond paperwork:
- Commitment to Your Interests: When signed, the contract legally binds the agent to act as your fiduciary, ensuring your interests come first. However, not all agents are equally equipped to deliver on this duty.
- Employment Agreement: Think of this contract as hiring an expert partner. You’re entrusting your agent to guide you through one of your most significant financial decisions, so their expertise, dedication, and strategy should align with your goals.
- Transparency and Accountability: By requiring this agreement, the NAR aims to give buyers greater clarity about their agent’s role and compensation, empowering informed decision-making.
Fiduciary vs. Functional Agents: What’s the Difference?
Not all agents are created equal. Understanding the distinction between functional agents and fiduciary agents is crucial to selecting the right partner.
Functional Agents
- Handle basic tasks like scheduling showings, sending listings, and assisting with paperwork.
- Operate reactively, addressing your needs as they arise but without proactive strategy or insight.
- May lack the in-depth market knowledge and negotiation skills needed to give you a competitive edge.
Fiduciary Agents
- Go beyond tasks to provide expert guidance, proactive service, and strategic advice.
- Act as your advocate, ensuring your interests are prioritized in every decision.
- Leverage market expertise, negotiation skills, and problem-solving to save you time, money, and stress.
Choosing a fiduciary agent ensures you have a dedicated ally who is invested in your success—not just in completing transactions.
The Risks of Hiring a Functional Agent
Settling for a functional agent might seem convenient, but it can lead to costly missteps:
- Missed Market Opportunities: Without deep knowledge of neighborhoods and pricing trends, functional agents may overlook valuable opportunities, leading to overpaying or missing out on the best deals.
- Weaker Negotiations: Fiduciary agents fight for your interests, securing favorable terms and saving you thousands. Functional agents may lack these skills, costing you money in repairs or closing costs.
- Delays in Fast-Moving Markets: Fiduciary agents are responsive and proactive, ensuring you act quickly in competitive situations. Functional agents may delay, causing you to lose out.
- Limited Problem-Solving: When challenges arise, such as inspection issues or financing hurdles, fiduciary agents provide solutions through their network and expertise. Functional agents may leave you navigating problems alone.
What to Look for in a Fiduciary Agent
With the Buyer Agency Contract in place, buyers now have more power to choose their agent intentionally. Treat this as a professional hiring decision by seeking the following qualities:
- Experience and Market Expertise: Look for agents with a proven track record in your desired area and property type. Their market knowledge should include pricing trends, local amenities, and future growth potential.
- Testimonials and Reviews: Ask for client feedback that reflects successful outcomes and satisfied buyers. This demonstrates the agent’s ability to deliver results.
- Fiduciary Commitment: Ensure the agent emphasizes their fiduciary duty and is transparent about how they prioritize your interests. Ask them for examples of how they’ve gone above and beyond for clients.
- Strategic Approach: A top agent will develop a tailored plan based on your goals, guiding you through each stage of the process and keeping you informed.
- Professional Network: Fiduciary agents bring trusted connections—inspectors, lenders, contractors—to support every aspect of your transaction.
Why the Buyer Agency Contract Empowers Buyers
The introduction of the Buyer Agency Contract is more than a procedural change; it’s a call for buyers to take charge of their home-buying journey. By formalizing the relationship with your agent upfront, you gain clarity, accountability, and the power to select someone who truly aligns with your needs.
Don’t rush into signing—use this opportunity to evaluate agents carefully. Ask questions, request references, and ensure the agent’s values and expertise match your expectations.
Final Thoughts: Choose a Fiduciary, Not Just an Agent
The real estate market in 2024 is fast-paced and high-stakes, making it more important than ever to have the right partner. The Buyer Agency Contract is your chance to align with an agent who will act as your fiduciary—offering personalized guidance, expert negotiation, and unwavering advocacy.
Don’t settle for a functional agent who merely completes tasks. Seek out a fiduciary who will protect your interests, provide strategic insights, and help you achieve your real estate goals. The right agent can make all the difference, making the home-buying process a smooth and rewarding experience.
Take charge of your future. Choose wisely. Choose a fiduciary.
