Heads up, prospective New York City homeowners: there are some changes to the NYC home-buying process on the horizon. Starting this summer, many NYC buyers will be required to sign a written agreement with an agent before touring with them. This change is likely related to the National Association of REALTORS® (NAR) lawsuit settlement reached back in March, which has outlined new industry requirements for agents and their clients. While it may seem like an extra step, written agreements can add transparency, promote open conversation, and set proper expectations between you and an agent you’re working with.

So what exactly does this mean for those looking to purchase a home in New York City? Read on for a thorough explanation of how this new industry standard will affect NYC buyers, and the types of buyer’s agreements you can expect to encounter.

Working with an agent to buy a home in NYC

New York City has one of the most expensive and complex housing markets in the country. The home-buying process is unique here: there are different types of homes, laws, costs, and financing requirements compared to the rest of the country.

With the nuances varying by neighborhood, building, and even down to the unit, the best way to navigate home shopping in New York City is by using a buyer’s agent — one who represents only you, and has relevant experience in the specific types of homes you are interested in. Working with an agent who understands the neighborhood and building can help you avoid pitfalls, like overlooking details in the building’s policies or not putting your best foot forward in a co-op board interview. A buyer’s agent can also point out important details during a home tour, negotiate on your behalf, and refer you to other professionals you may need, like mortgage lenders and home inspectors.

Home buyers deserve to work with an agent they feel is a good fit for them and their specific real estate goals. This often means that a buyer might need to meet with a few different agents before agreeing to work together exclusively. This vetting is crucial, and can continue into the process of touring homes.

What is a touring agreement?

A buyer should be under no obligation to work with an agent before touring a home with them, which is where touring agreements come in. A touring agreement, or limited services agreement, may be used to specify that you and the agent will work together for a very specific purpose and brief period of time — such as a home tour. This gives you the important opportunity to get to know an agent before you commit to a longer-term agreement. 

StreetEasy has created a non-exclusive Touring Agreement which covers touring activities only, does not require a fee upon signing, and expires after seven days, as most initial home tours take place within this timeframe.

It’s meant to be an introductory agreement, allowing home shoppers to enter a tour understanding what services the agent will provide at this stage, without an obligation to exclusively work with them.

What is a buyer’s representation agreement?

Once a buyer decides to work with a particular agent more formally, it’s expected that one or both parties — typically, the agent — will initiate a conversation about working together long-term, and what exactly that means. They will then likely sign a buyer’s representation agreement before moving forward in the process.

A buyer’s representation agreement lays out the broader real estate services provided by the agent, as well as the required compensation and payment terms. We believe buyers deserve to work with an agent who is committed to their best interests and only works for them. As such, the agreement should specify that the buyer’s agent represents solely you — and not the seller — in the transaction. 

Buyer’s representation agreements are important safeguards for home shoppers and agents alike. They are documents that ensure both parties understand exactly what each other’s tasks and obligations to one another are. They help prevent surprise fees, unplanned asks, or “gotcha” moments. They also create an opportunity for full transparency. Consumers should be aware of the exact commissions they’re paying an agent, and when those payments are expected, well before they get to closing conversations.

Exclusive vs. non-exclusive buyer’s representation agreements

Buyer’s representation agreements are often exclusive, which means you’re agreeing not to hire another agent to represent you while you shop for a home. However, non-exclusive buyer’s representation agreements do exist, and make sense for certain buyers in specific contexts. For example, if you’re searching for homes in two different cities, you may need to work with two or more agents to secure the perfect places for you. In this case, you and your agents would sign non-exclusive agreements, legally allowing you to work with more than one agent.

New York State Disclosure Form for Buyer and Seller

Another form you can expect to sign as an NYC home buyer is a New York State Disclosure Form for Buyers and Seller. This document outlines the nature of the relationship between a buyer (or seller) and an agent. It is not a contract, but rather an informational document that breaks down the definitions of specific real estate terms like “buyer’s agent,” “broker’s agent,” and “dual agent”. 

StreetEasy believes buyers and sellers deserve to work with an agent who is committed to their best interests, and represents only them. You wouldn’t hire the opposing party’s attorney in a lawsuit, and you shouldn’t do so in a real estate transaction either. This disclosure form helps buyers and sellers understand who the agent represents, and formally acknowledge cases where they’re choosing an agent who also represents the seller in the transaction. 

New York State Housing and Anti-Discrimination Disclosure Form

The New York State Housing and Anti-Discrimination Disclosure Form is a document you’ll likely encounter that ensures buyers and renters know their rights and protections under federal, state, and local fair housing and anti-discrimination laws. The disclosure form also explains how buyers and renters who believe they’ve been victims of housing discrimination can file a complaint with the state. Learn more about fair housing protections.

There may be other disclosure forms your agent must provide to you, depending on the transaction. Your agent should provide you with all the necessary forms as part of working with them.

Have more questions? Visit our resource hub

For more information on working with a buyer’s agent and what to expect throughout the home-buying process, visit our Working with a Buyer’s Agent: Resource Hub for Buyers page.