What Home Buyers Need to Know Before Touring Homes
Buyer representation and agent compensation are now discussed earlier in the home-buying process than in the past. This guide explains how buyer representation works, why agreements are required before touring homes, and how compensation is addressed so buyers understand their options from the start.
Why Do I Need to Sign a Buyer Representation Agreement Before Touring Homes?
This requirement is the result of recent legal actions involving the National Association of REALTORS® aimed at increasing transparency around the topic of representation and compensation. Courts and regulators emphasized that buyers should clearly understand who represents them and how agents are paid before touring homes, rather than discovering those details later in the process. For many years, buyers and sellers commonly assumed that the seller would always pay the buyer’s agent, even though compensation has always been negotiable.
As a result, REALTORS® in Tennessee and other states are now required to have a Buyer Representation Agreement, or at a minimum a Touring Agreement, signed before showing homes. This clarifies who represents you, what services are being provided, and how compensation is handled before you begin touring properties. A Touring Agreement does not provide representation but does outline your compensation responsibility. This helps avoid confusion later in the process.
What If I Am Not Sure Yet Which REALTOR® I Want to Work With?
That concern is common. Although the Buyer Representation Agreement or Touring Agreement is required before touring homes, it is not intended to pressure you into a long-term commitment. Many agreements can be written with a limited scope or reasonable timeframes, allowing you to move forward while still feeling comfortable. Your REALTOR® should review the agreement with you and answer any questions before asking you to sign. Once you have met in person, you can then decide whether you would like that REALTOR® to continue representing you beyond that initial period.
How Does Having a Buyer’s REALTOR® Really Benefit Me?
In Middle Tennessee, where contracts, inspections, and financing rules vary by loan type and property, professional representation matters.
A Buyer’s REALTOR® (also called a Buyer’s Agent) represents you throughout the entire transaction, including:
- Introducing you to local lenders and obtaining a full loan pre-approval
- Helping you understand pricing and current market conditions
- Coordinating showings and identifying suitable homes
- Advising on financing considerations and loan requirements
- Writing and negotiating offers, counteroffers, and finalizing the Purchase and Sale Agreement
- Managing inspections, appraisals, and repair negotiations
- Advising buyers on available information related to property boundaries, flood maps, school districts, HOA restrictions, utilities, and more
- Tracking deadlines, contract obligations, and working directly with the title company throughout the transaction to ensure a timely and smooth closing.
Why Do I Have to Agree To Pay My REALTOR®’s Compensation?
Buyers now agree in advance to what they will pay their REALTOR®, at closing, similar to how buyers agree upfront to lender fees and closing costs when choosing a mortgage. This creates transparency, sets expectations clearly, and allows your REALTOR® to fully advocate for you, knowing representation and compensation are clearly defined.
Once a compensation amount is agreed upon in the Buyer Representation Agreement, that amount generally serves as the maximum your REALTOR® can receive for that transaction, unless the agreement is amended in writing.
Does This Mean I Always Pay My REALTOR® Out of Pocket At Closing?
No. While the Buyer Representation Agreement outlines what you agree to pay your agent, it does not mean you must always pay those costs directly. Buyer's agent compensation can often be negotiated as part of the purchase agreement, similar to traditional closing costs. Your REALTOR® will help you understand how this is addressed based on what you have agreed to in advance.
Can I Ask The Seller To Help Pay My REALTOR®’s Compensation?
Yes. Sellers have the choice as to whether they will contribute toward buyer broker compensation, and Buyers may request seller assistance as part of their offer. A Seller’s decision depends on market conditions, property demand, and the overall strength of the offer. Sellers evaluate offers based on net proceeds, so how your request is structured can be just as important as the purchase price. Your REALTOR® is a skilled negotiator and will know the best way to present this as part of a competitive offer.
What Happens If The Seller Does Not Agree To Pay?
If the Seller chooses not to contribute toward Buyer Agent compensation, the Buyer may be responsible for paying their REALTOR® directly, based on the Buyer Representation or Touring Agreement.
If a Seller is unwilling to contribute toward some or all of that compensation, you may choose to continue with the offer or continue your search and focus on a property where the overall terms are a better fit.
Your REALTOR® will help you evaluate what makes the most financial sense.
What Has Changed About How Compensation Works?
Since August of 2024, several important changes have taken place:
- Buyer Broker compensation is no longer advertised or mentioned in the MLS
- Buyers must execute a Buyer Representation Agreement or Touring Agreement before touring homes.
- Buyers agree in advance on what they will pay their REALTOR®
- Compensation is negotiated directly between the Buyer and Seller
- Sellers decide whether they will contribute toward that cost
What has not changed is the Buyer’s ability to negotiate compensation as part of the overall transaction.
Why Not Buy A Home Without Using a REALTOR®?
A listing agent represents the seller, not the buyer, which is important to understand when contacting a listing agent directly, visiting a new construction community, or attending an open house. The agent you speak with in these situations, whether it is the listing agent or another agent assisting with the property, is not working for the buyer and cannot take on that role without a formal Buyer Representation Agreement..
If you wish to receive representation, advice, and advocacy on your behalf, a Buyer Representation Agreement would need to be in place. This ensures the agent assisting you is working in your best interest, whether for that specific home or throughout your broader home search.
Buying a home involves legal contracts, inspections, appraisals, financing rules, and negotiation. Without representation, buyers take on all of this responsibility and risk themselves.
Your REALTOR® works exclusively for you and is required to act in your best interest. This includes confidentiality, loyalty, negotiating on your behalf, and providing fiduciary representation and guidance throughout a very complex process.
How Has the Home Buying Process Changed Overall?
The process of buying a home has not changed. Homes are still negotiated, inspected, and financed the same way.
What has changed is transparency around representation and compensation, and helping Buyers make informed decisions earlier in the process.
What is the Bottom Line for Buyers?
Buyer Representation Agreements clarify representation and expectations. While Buyers now commit in advance to how their REALTOR® is compensated, that cost can often be negotiated as part of the Purchase Agreement with the Seller, just like other closing expenses.
Professional REALTOR® representation remains one of the most important safeguards when buying a home in Middle Tennessee. Working with an experienced Middle Tennessee REALTOR® ensures these decisions are evaluated based on current market data, pricing strategy, and your specific goals.
If you are searching for a home in Middle Tennessee, please feel free to contact Kim Blanton. Kim would be glad to answer any questions or concerns you may have.
Disclaimer:
The information above is provided for general guidance and may not reflect every situation. All real estate transactions are subject to federal, state, and local Fair Housing laws, and buyers and sellers must be treated fairly and consistently without discrimination based on protected characteristics. Real estate practices and requirements in Tennessee may change. Agency relationships, compensation, and transaction terms are governed by written agreements, and buyers and sellers should review all documents carefully and consult trusted professionals as needed.
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