Questions to ask a buyer's agent before you sign anything

What the agreement must include

NAR's summary of the settlement says buyers working with a Realtor will sign a written agreement before touring a home. The agreement must include four points about pay:

• a specific and conspicuous statement of the amount or rate the agent will receive, or how it will be determined;
• compensation that is objective, such as a flat fee, a percentage or an hourly rate, not something open-ended like "whatever the seller offers";
• a term that stops the agent from receiving more from any source than the amount in your agreement; and
• a conspicuous statement that broker fees and commissions are fully negotiable and not set by law.

Ask to see the agreement before the interview ends. It is easier to negotiate before you are in love with a house.

Questions about pay

• What compensation are you proposing, and how is it calculated?
• If a seller offers to pay buyer agent compensation, how does that interact with our agreement?
• If the seller pays less than our agreed amount, who pays the difference? Can we agree in advance how that is handled?
• How long does the agreement last, and how can either of us end it?
• Does the agreement cover all homes, or only certain areas or types?
• Is there any fee if I buy a home I found myself?

VA's closing cost page lists agent commissions and fees among the costs a buyer and seller can negotiate. Whatever loan you use, the answer to "who pays the gap" should be settled before you write an offer.

Questions about experience

• How many buyers have you helped in the last year, and how many were first-time buyers?
• Which neighborhoods and price ranges do you know best?
• Have you worked with my type of loan, such as FHA, VA, USDA or a state assistance program?
• Can I talk to two recent buyer clients?

An agent who has closed several FHA or assistance-program purchases will know the appraisal, repair and timing issues those loans raise. Ask specifically.

Questions about how they work

• How quickly do you usually respond, and how should I reach you?
• Will you show homes yourself, or will someone else on your team?
• How do you decide what to offer? Will you show me recent comparable sales?
• How do you handle inspection results and repair requests?
• What happens if the appraisal comes in low?
• Which inspectors, lenders and title companies do you recommend, and do you have any business ties to them?

The last question matters. Agents can recommend providers, but you are free to choose your own. If an agent has a financial relationship with a recommended provider, you should know.

Red flags

• Reluctance to show you the agreement before you tour.
• Pressure to sign a long agreement with no way out.
• Vague answers about compensation or who pays it.
• Little experience with your loan type or price range.
• Discouraging you from getting an inspection or reading documents.

Also check the agent's license on your state real estate commission's website. Most commissions offer a free lookup that shows license status and any public discipline.

The bottom line

Interview more than one agent, read the agreement before you tour and get clear answers about pay, experience and how they handle problems. The written agreement is negotiable, so ask for terms that fit you.