NAR Releases Consumer Guides for Open Houses, Written Agreements and Realtors’ Duty to Put Client Interests Above Their Own

CHICAGO—The National Association of Realtors has released helpful and informative consumer guides for Realtor members to help prospective buyers and sellers navigate the changes taking place due to the practice changes now in effect due to the commission settlement.

The following are the full texts of the consumer guides authored by NAR covering open house and written agreements and a Realtors’ duty to put client interests above their own.

Consumer Guide:

Open Houses and Written Agreements

As of Aug. 17, 2024, many real estate professionals nationwide will be asking buyers to enter into a written agreement prior to touring a home. But what if you are just attending an open house? Here’s what you should know:

I am attending an open house without an agent. Do I need a written buyer agreement in order to tour the home? No. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.

Is an agent who is hosting an open house required to enter into written agreements with the potential buyers who attend the open house? No. In this case, since the agent is only there at the direction of the listing broker or seller, the agent is not required to have a written agreement with the buyers touring the home.

When will I be asked to sign an agreement with an agent? After you begin “working with” an agent and at any point before you tour your first house together.

What does “working with” an agent mean? A buyer is “working with” an agent as soon as the agent begins to provide services, such as identifying potential properties and arranging tours. Agents who are simply marketing their services or speaking to a buyer—at an open house or by providing a buyer access to a house they have listed—are not considered to be working with the buyer.

What does it mean to “tour” a home? Under the terms of the settlement, a “tour” is when a buyer who is working with an agent enters a home that is for sale or directs their agent to enter the home on their behalf. This includes when the buyer’s agent provides a live, virtual tour to a buyer not physically present.

What is the purpose of written buyer agreements? Clarity and transparency. Written buyer agreements lay out the services your real estate professional will provide and what they will be paid. Buyers should not sign anything that includes terms they do not agree with or do not understand. You are in the driver's seat with these agreements, which are fully negotiable.

Where can I learn more about buyer agreements? NAR has created a dedicated resource on written buyer agreements here https://cdn.nar.realtor/sites/default/files/documents/consumer-guide-written-buyer-agreements-2024-08-24.pdf

Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.

Consumer Guide:

Realtors’ Duty to Put Client Interests Above Their Own

A Realtor is a special kind of real estate agent: one who follows NAR’s strict Code of Ethics, including the first and primary pledge to protect and promote the interests of their clients.

This obligation means that a Realtor cannot make decisions or provide representation in a way that puts their own interests or commissions ahead of their clients’ interests.

What does it mean for a Realtor to act in a BUYER’s best interest? A Realtor has an ethical duty to tell a buyer about every home available for sale that meets their criteria. That means that Realtors will let you know about all available homes, regardless of whether the seller or listing broker is offering compensation to your buyer’s agent, and even if compensation offered by a seller or listing broker is less than what you agreed to pay your agent in your written buyer agreement.

What does it mean for a Realtor to act in a SELLER’s best interest? A Realtor should explain to their seller the benefits and costs of the various types of marketing that can be done for a listing, and how potential buyers might respond to such marketing. A Realtor is ethically prohibited from telling a seller that their home will be hidden from buyers unless the seller pays a particular type or amount of compensation.

What is wrongful “steering?” The Realtor Code of Ethics prohibits “steering” buyers toward homes because the Realtors will be paid more, or away from homes because the Realtor will be paid less. Similarly, the Realtor Code of Ethics prohibits a Realtor from telling a seller that buyers will be “steered” toward homes because the Realtor will be paid more, or away from homes because the Realtors will be paid less.

How do written agreements protect me from steering? As of Aug. 17, 2024, you will be asked to sign a written buyer agreement before touring a home with the professional you want to work with. NAR’s ethical rules have long encouraged Realtors to enter into written agreements with their clients because these agreements promote clarity and transparency. They also help protect you from wrongful “steering” by specifying the amount of compensation the Realtors will receive and the services they will provide. Since a broker working with a buyer receives the amount the buyer has agreed to, the amount of any offer of compensation is irrelevant to the buyer-broker’s compensation.

Where can I learn more about buyer agreements? NAR has created a dedicated resource on written buyer agreements here at: https://cdn.nar.realtor/sites/default/files/documents/consumer-guide-written-buyer-agreements-2024-08-24.pdf

What can I do if I think a Realtor is violating NAR’s Code of Ethics?

If a Realtor acts in a way that places their interests before yours, this is a violation of NAR’s Code of Ethics and should be reported to your state or local Realtor Association for investigation and potential disciplinary action.

Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.