Why Do I Need a Buyer-Broker Agreement?

Real Estate Agent with Long & Foster Real Estate, Inc.

Q&A - istockphoto.comQ.  I didn't have a buyer-broker agreement when I bought my last home... Why do I need one now?

A.  At your first scheduled meeting with any real estate licensee in Maryland, you will receive a form titled Understanding Whom Real Estate Agents Represent (sometimes referred to as the "Agency Disclosure") which you must sign.  No obligation on your part is implied when you sign this form; it simply acknowledges that you received a copy of this information from the agent.

The Agency Disclosure provides very clear and comprehensive explanations of the relationship between real estate licensees and consumers in Maryland.  In the meantime, here's a much briefer explanation that will help answer your question.


sign contract - istockphoto.comAgents Who Represent the Seller -

  • A Listing Agent is the real estate licensee hired by the seller of Maryland real estate to represent the seller's best interest. 
  • A Co-operating Agent is a real estate licensee who simply assists the buyer but represents the seller (not affiliated with the listing broker).

Agents Who Represent the Buyer -

  • A Presumed Buyer's Agent is a real estate licensee with whom you have no formal representation agreement.  He/she is presumed to be working in the buyer's best interest, provided they are not affiliated with the listing company.   However, a presumed buyer's agent cannot prepare an offer or negotiate on your behalf without a written agreement outlining both parties obligations to the other (A Buyer-Broker Agreement).
  • A Buyer's Agent - An agent hired by the buyer of Maryland real estate to represent the buyer's best interest.  This requires a written agreement outlining both parties obligations to the other in the search for and purchase of a home.  (A Buyer-Broker Agreement)

Dual Agents -

  • A Dual Agent does not exclusively represent either the buyer or seller, because both agents are associated with the same broker/real estate firm.  This is explained in much more detail on the required Agency Disclosure form and a separate form titled Consent for Dual Agency, which the buyer and seller must both sign when the listing and selling agent are affiliated with the same broker/real estate firm.


No matter which type of agent you choose to work with, you have certain rights and responsibilities that are outlined on the Agency Disclosure, including this one:

  • All agreements with real estate brokers and agents should be in writing and should explain the duties and obligations of both the broker and the agent. The agreement should explain how the broker and agent will be paid and any fee-sharing agreements with other brokers and agents.  (That's word for word, straight from the form.)


This written agreement is the Buyer-Broker Agreement which formally makes you a "client" rather than a "customer" of the agent.  Yvette Chisolm, a colleague at Long & Foster Real Estate, Inc., addressed this topic in her post Client or Customer - Does It Really Matter?, and I encourage you to click through and read it.  Together with the brief descriptions of the different types of "agency" in Maryland you see here, I think Yvette's post will help clarify why you need a Buyer-Broker Agreement in Maryland.


Information in this post should not be construed as legal advice.  Be sure to consult with a Maryland-licensed attorney for information about any legal matter, including the sale or purchase of a home.

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This infoMargaret Wodarmation was provided to you by Margaret Woda, an Associate Broker with Long & Foster Real Estate in Crofton Maryland. Contact Margaret today for general real estate information or to learn how she can help you buy or sell a home in Annapolis, Bowie, Crofton, Davidsonville, Gambrills, and Odenton. 

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Re-Blogged 3 times:

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Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Rebecca, I cringed when I saw this featured on the same day as the Member Spotlight, especially so soon after my last feature.  I've written a post on that (Stop Throwing Those Activerain Darts at Me) which I'll submit tomorrow.  LOL  Thanks for the congrats!

Brenda, that's what we used to call it until 1999 when they came out with these terms.

Patricia, they are different.  I explained all that in my draft, but felt it necessary to cut out some info and make it a little less long - still not short.

Jan 24, 2011 12:46 PM #21
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Valerie - I believe that's Maryland's goal.  But sometimes they want to understand this BEFORE the first scheduled appointment, and that's why I wrote this - well, that and the 31-day January challenge and the Don't answer the same question twice challenge... LOL.

Consumer - I can't answer that for every state because each has its own definitions and requirements of agency.  In MARYLAND, a seller signs the Consent for Dual Agency form at the time of the listing - if they don't offer Dual Agency, no agent working under the same broker/firm may show that property except as an agent of the seller, i.e., not as a buyer's agent.  In other words, the seller DOES agree to Dual Agency at the time of the listing and it is confirmed again when the property is shown and again if an offer comes in.  (Not to be construed as legal advice, because I am not an attorney.)  Most sellers, in my experience, feel the benefit of showings and a possible sale by other agents in the listing agent's firm makes Dual Agency their choice over declining Dual Agency at the listing.  Again, this is MARYLAND.  Good question, and you should follow up by asking an agent in your state.

Chirs, I agree this is an important form for use  IN MARYLAND.  These terms are defined differently in each state and the requirements are different in each state.

Laurie - I've been surprised to learn through Activerain posts by agents in other states that nothing like this is required in some places.  In fact, some states (Florida, for example) doesn't even have "agency" - real estate licensees are simply facilitators with no agency obligations to either party.  (If someone from Florida wants to clarify that, we'd all like to learn.)

Jan 24, 2011 12:58 PM #22
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, - Your Coastal Bend Home Source

Excellent post Margaret, congrats on the feature! :) Agency is something we need to talk about more.

Jan 24, 2011 01:38 PM #23
Celeste "SALLY" Cheeseman
Century 21 Liberty Homes - Mililani, HI

Our agency disclosure is the first page of our purchase contract.  ....now as for the Buyer's Resentation Agreement it outlines the agency disclosure again and then through the terms of the agreement.  It's a good practice but one I have not done....yet.  We do not have Presumed Buyer Agent or subagency.

Jan 24, 2011 02:05 PM #24
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Margaret - This is a terrific and informative post for consumers in your market.  I have come to expect nothing less from you.  Hope all is well in your part of the world.  :)

Jan 24, 2011 02:29 PM #25
Traci Ferguson
San Luis Obispo Realtor & ecoBroker with Patterson Realty - San Luis Obispo, CA
Realtor, EcoBroker, LEED AP

A great for to use. I wish more agints used it more often. It's not law in CA, but it should be.:)

Jan 24, 2011 03:07 PM #26
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Ricki - You're right.  It's confusing enough to us, imagine how it is to consumers.

Sally - Interesting how different it is from one State to another.

Jason - All IS well, but cold.  Let me know if any rebar camps or the like take place in Houston, will you?  I didn't find out about the last one 'til it was over, and attending a real estate training event would be a good excuse to go see my son's family.  Haven't been there in a year.

Traci - I agree.  I'm glad it is the law here... it takes any flexibility or negativity out of the equation.  It's the big bad government that requires us, not the real estate community.  LOL.

Jan 24, 2011 03:18 PM #27
Ryan Case
SCA Real Estate - Anaheim, CA

While I dont make my clients sign these, I do see why others do

Jan 24, 2011 04:40 PM #28
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Here in California we are suppose to get an agency agreement signed on the initial contact with a prospect, unfortunately, sometimes this is the last thing that is addressed by the agent, and most of the law suits are over "Agency".

Jan 24, 2011 06:53 PM #29
Toronto, ON

Hi Margaret - A very large percentage of agents in my area do not use Buyer Representation Agreements.  My board has been trying to promote the BRAs among agents as well as the public via various advertising and educational means over the last couple of years.

Jan 24, 2011 09:25 PM #30
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker


This is the most misunderstood area of real estate by the consumer. Also, the industry has done a poor job of communicating the entire agency and non-agency relationships.


Jan 25, 2011 12:07 AM #31
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

If I worked primarily as a buyer's agent I would certainly have a buyers broker agreement. I am glad listings are my thing:)

Jan 25, 2011 12:19 AM #32
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Margaret, Buyer Rep agreements are vital for all the reasons you stated and are vastly misunderstood by the general public.

Jan 25, 2011 12:58 AM #33
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Margaret, great post explaining Agency. It is to a buyer's benefit to have representation and knowing the Agent is 100% on their side. Educating the public is important in this area. Thanks.

Jan 25, 2011 01:51 AM #34
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Ricki, I think you're right about that... especially since the laws differ from one state to the next - and frankly, buyer agency didn't exist 20 years ago in Maryland.  Depending on where and when a seller purchased their home, they may NOT have entered into a buyer-agency agreement.

Lorraine and Loretta - I'll bet they are!  Buyer agency began in California, I'd think they might have the disclosure perfected by now.

Marc - We're very fortunate that Maryland law MAKES us do it.  NO one can argue with that and win.

Richard - I'm sure it's different in your neck of the woods... You would have to check with a Tennessee agent to find out what's required there.


Jan 25, 2011 06:21 AM #35
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Brian - I agree, but the industry can hardly take this on... there probably aren't 2 states in the country that have exactly the same laws in effect.  It's got to be done a State-wide level, and I think the requirement Maryland agents have to address the issue at the first scheduled meeting is a good one.

Bill - My head says list, my heart says sell.  I seem to go in waves, however the tide comes in. 

Gary - This is becoming a theme in the comments.  Consumers don't understand.  I think that's one reason Yvette's post about "Client" vs. "Customer" is so relevant.

Michael - I think you're right about this.  And really... who's going to do this if we don't do it, at least when we meet with a buyer one on one.



Jan 25, 2011 06:25 AM #36
Bill Rozek
Embrace Home Loans, Inc. - Potomac, MD
NMLS #214260

BillWell written, Margaret.  Since I'm also working in Maryland, I'm going to add this topic to my list to write about to drip on my email list of prospects and contacts.

By educating them in advance, they know it is to their benefit to have an agent who represents their interests. As a result, when they are finally ready to buy, they often call me to ask about a referral to an agent who is an expert in the locality they are interested in.

Jan 25, 2011 09:12 AM #37
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Margaret -- It's interesting to note the differences in both terms and legalities from state to state. Thanks for sharing.

Jan 25, 2011 03:07 PM #38
Coral Gundlach
Compass - Arlington, VA
Real Lives. Not Just Real Estate.

Hi Margaret: I wish we had a requirement for that disclosure in VA.  I have recently begun insisting on at least a meeting and review of the BBA before showing houses.  I won't make you sign it right away, but before putting significant time in, I want it signed.  Or maybe a one day agreement as a compromise.  

I recently showed my own listing to a buyer through Zillow and talked to him about this.  He wanted to see more properties with me and told him I wanted to do the above.    Absolute refusal.  Said he wanted to "not be limited"  and the "agent who shows him the house he wants to buy, gets rewarded."  I explained all the benefits of working with a buyer's agent and how listing agents are not inclined to represent his best interests, or doing dual at the most.   Nada.   These documents should be required by law in all states, IMHO. 

Feb 04, 2011 11:49 PM #39
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