Key facts
- Homebuyers Kirsten Ganas and Austin McCarley are facing difficulties terminating a buyer representation agreement with their real estate agent, Dan Waterhouse.
- The agreement, signed before viewing properties, binds them to the brokerage for a year, with termination requiring fees or referral payments.
- A 2024 legal settlement mandates written buyer-agent agreements before property tours, intended to increase consumer protection.
- Consumer advocates express concern that these contracts could trap buyers with ineffective agents or high fees.
- Historically, buyers' agents were often paid through seller commissions, making their services appear 'free' to buyers.
Homebuyers Kirsten Ganas and Austin McCarley found themselves in a difficult situation after signing a buyer representation agreement with their real estate agent, Dan Waterhouse, before viewing properties. The contract, which bound them to Waterhouse's brokerage for a year, stipulated that termination would incur fees or require finding another brokerage to pay a referral fee. Failure to comply meant owing the full agreed-upon commission, even if they bought a home without using an agent.
This situation highlights the impact of a significant 2024 legal settlement involving the National Association of Realtors, which now requires most agents to obtain written agreements with clients before showing them homes. While intended to enhance consumer protection by ensuring buyers understand their commitments, consumer advocates warn that this practice could inadvertently trap buyers with underperforming agents or excessive fees.
Historically, buyers' agents often advertised their services as free, with their compensation typically coming from a portion of the seller's commission. This model was upended by a class-action lawsuit that concluded in 2023, leading to the settlement and the new requirement for upfront written agreements.