Finding Your First Home, Part 1: The Buyer-Broker Agreement

(This is part 1 of a multi-week series about the home-buying process. To begin, we'll take a look at the very first steps of buying a home)

Buying your first home is not only a massive financial investment, but also a major life step that can turn into a snowball of stress. First-time buyers can easily be overwhelmed by everything that goes into getting the keys to their new place. This stress can start right at the beginning of deciding to buy, so the best thing possible is to not put the cart before the horse.

The first step in your home-buying journey is to find a buyer's agent you can trust to represent your interest and work within your unique situation (I happen to know a great one...).

In all seriousness, I recommend that you interview a few agents. Make sure that you are able to find someone you trust, that communicates well, and is up-front about how they do their jobs.

Due to legal changes in 2024, Realtors are now required to have a signed Buyer-Broker Agreement (BBA) prior to showing a buyer a home. This document outlines the broker's duties to you (through their contracted agent), as well as your duties to the broker. For most people, the biggest concern comes in the "Compensation" portion of the agreement. In this section, you and the agent will decide on how much the agent will be paid when they successfully find a house and get you into it. Understand that compensation is always negotiable!! If you feel like an agent is asking too much, don't be afraid to speak up!

Also make sure you understand not only the broker's obligations to you, but your role in the process as well. There is some language in the agreement that, if you're not careful or diligent, might lock you into some fees even without the successful closing on a home.

Please be aware, the vast majority of agents and brokers are not lawyers, and we are limited in how much interpretation of legal contracts we are allowed to do. If you have questions about any of the papers someone asks you to sign, be sure to consult a licensed legal or tax professional to clear up any questions.

Next week, we will take a look at acquiring financing, and why you should do that before you even start looking at homes on the web.