5 Things to Know Before You Tour a Home

Expect a written agreement before a private tour

If an MLS participant is working with you as a buyer, current industry rules generally require a written buyer agreement before the agent tours a home with you.

Arizona REALTORS® provides a Buyer-Broker Agreement to Show Property. It can spell out the buyer and brokerage, the term, the type of property, the agency relationship, and broker compensation.

What about an open house?

If you independently attend an open house, you generally do not need to sign a buyer agreement simply to walk through. A listing agent who provides access to an unrepresented buyer on the seller’s behalf is not automatically representing that buyer.

Signing does not automatically mean you pay the entire fee

The agreement establishes the compensation the brokerage is entitled to receive for the services described. Depending on the agreement and transaction, some or all of that compensation may come from the seller, the seller’s brokerage, the buyer, or another negotiated source permitted by the transaction.

If another party pays the buyer’s broker, that amount may be credited toward what the buyer agreed to in the buyer agreement.

Broker fees are negotiable

There is no law establishing one mandatory real estate commission. Broker fees and commissions are negotiable.

A buyer agreement may use an objectively ascertainable amount or rate, such as a percentage of the purchase price, a fixed dollar amount, or another clearly defined arrangement. Current rules also prohibit an agent from receiving more compensation for the covered brokerage services than the amount or rate agreed to with the buyer.

Your seven-question compensation check

• How is your compensation calculated?
• What exact amount or rate am I agreeing to?
• Can it be negotiated?
• Can the seller or listing brokerage contribute?
• If they do not pay the full amount, could I owe the difference?
• How long does the agreement last?
• Is it exclusive or non-exclusive?

Plan for more than the down payment

Your cash needs depend on the property, loan program, contract terms, lender requirements, and other transaction-specific factors.

Potential expenses may include the down payment, earnest money, inspections, appraisal, lender closing costs, escrow and title expenses, prepaid taxes and insurance, homeowners insurance, HOA-related costs, moving expenses, and possible buyer-broker compensation under your agreement and transaction.

Speak with both your real estate professional and a qualified lender before deciding how much cash you will need.

Compare the full loan picture

There is no single mortgage program that is best for every buyer. A qualified mortgage professional can help you compare rates, estimated payments, closing costs, mortgage insurance when applicable, and qualification requirements.