Signing Before You Shop Could Lock You Into a Real Estate Nightmare

A Contract Before the First Tour

Imagine finding the perfect real estate agent, touring a couple dozen homes, and then deciding the relationship just isn't working. Simple enough, right? Not anymore. It was late March, right in the thick of homebuying season in southwest Pennsylvania, when a woman named Ganas and her partner, Austin McCarley — expecting their second child and eager to upgrade from their two-bedroom rental — realized they were less than thrilled with the services provided by their agent, Dan Waterhouse. He'd reached out to them in early January after they requested their first home tour on Zillow, and had since shown them roughly two dozen properties — but he was sometimes slow to respond and lived far from their desired area, a real problem in a fast-moving market.

Shortly after getting outbid on a property, Ganas texted to let him know they'd be moving on. There was just one problem: when they met Waterhouse for that first home tour, he'd handed them documents that he described as standard paperwork they'd need to sign before seeing the home. What seemed like a formality turned out to be a legally binding commitment — and getting out of it was anything but easy.

The Rule That Changed Everything

Ganas and McCarley had signed a "buyer representation agreement," a contract outlining the terms of the relationship between buyer and broker. Until just a couple of years ago, this would have been unusual — agents typically waited to hand clients any formal documentation until later in the process. But thanks to a seismic legal settlement in 2024, most agents are now required to get a written agreement before they step through the front door with a client. One broker described it at the time as "the biggest change in 100 years."

The settlement, unveiled in the spring of 2024, included a new requirement for the vast majority of agents: before so much as touring a home with a client, they'd need to agree on the terms of the relationship — in writing. Under the terms of the settlement, which went into effect in August 2024, Realtors are required to have consumers sign a buyer agency agreement that outlines the terms of the agent's services and compensation prior to touring a property. The intent was transparency. The reality, for many buyers, has been something else entirely.

The Fine Print That Traps Buyers

When it comes to specifics like fees or term length, it's up to buyers and their agents to fill in the blanks. The agreements can range from one day to an entire year, or from "exclusive" to "non-exclusive" — a version that allows a buyer to work with multiple brokerages at once, though they'll likely owe a commission to the agent regardless. That flexibility sounds reasonable on paper. In practice, many buyers don't know what they're agreeing to until it's too late.

Many state Realtor associations' new forms are largely incomprehensible to the average homebuyer or seller and contain language that seeks to avoid the terms of the NAR settlement, according to a report written by Tanya Monestier, a contracts law professor at the University of Buffalo. As Monestier put it, "You should not need to hire a lawyer to understand a listing agreement or buyer representation agreement." Consumer advocates warn that millions of prospective buyers risk being tethered to inept agents or agreeing to inordinate fees before they've had a chance to get a feel for the relationship.

What Every Buyer Needs to Know Now

The requirement marked a significant change for agents across the country — even those already accustomed to using buyer agency agreements — and sparked concern among others about getting a stranger they just met to sign a legally binding contract. Most buyer and seller agreements run three to six months, and both types include a protection period covering any homes the agent introduced to you — meaning firing your agent mid-contract without understanding that clause can cost you the full commission you were trying to avoid.

The story of Ganas and McCarley is a cautionary tale that will resonate with anyone who has ever felt rushed into signing something at the start of an exciting process. The new rule was intended to make sure buyers know exactly what they're signing up for when they enlist an agent. But knowing your rights before you sign — scrutinizing the contract length, the exclusivity terms, and the commission structure — is now as essential as getting a home inspection. As the housing market continues to evolve under these new rules, the buyers who fare best will be the ones who treat that first document with the same seriousness as any other contract in the deal.