Buying a Home in NYC: Here’s What to Know About Buyer-Broker Agreements

New York City’s real estate market is fast-paced and complex, making it easy to feel overwhelmed. A buyer-broker agreement can simplify the process by setting clear expectations and defining your agent’s role. Until recently buyer broker agreements were not used in New York City the way they have been in the rest of the country.

It was standard practice for sellers to pay the listing broker and the buyer’s broker. Members of the Real Estate Board of New York (REBNY) had agreements in place stating the commission would be split 50-50. These agreements did not state the amount of the commission as they have always been negotiable but as of now sellers have the choice not to offer the buyer’s broker a commission.

All the changes are a result of dozens of antitrust lawsuits filed across the country including one against REBNY. Now buyers must sign an agreement before seeing a property. Here is what you need to know about buying a New York City apartment today.

The Buyer-Broker Agreement in NYC Real Estate

With thousands of listings, competitive bidding wars, and co-op board approvals, navigating New York City’s real estate market can be a daunting project without assistance. If you are new to the market and looking on various websites you may discover a deluge of agents willing to help you but they may bring more noise instead of clarity to the situation if you have not chosen the right agent for your needs. Once you sit down and discuss your search parameters and goals a buyer-broker agreement can bring clarity and structure to the process. This legally binding contract defines the roles, responsibilities, and expectations between you and your real estate agent—helping ensure you have the right professional in your corner as you search for your dream home.

What is a Buyer-Broker Agreement?

It is a formal partnership between you and your real estate broker. It outlines the terms of your working relationship, including how long you’ll work together and how your broker gets paid. Before January 1, 2025, these agreements weren’t required in NYC. However, new regulations from the Real Estate Board of New York (REBNY) now require them, following a settlement with the National Association of Realtors (NAR). These agreements promote transparency and protect buyers in an evolving market.

Types of Buyer-Broker Agreements

You do have options and flexibility while you are trying to determine the best path forward for you. There are three main types of agreements, each with different levels of commitment:

• Non-exclusive, not-for-compensation: You can work with multiple brokers, but none are guaranteed compensation, so they may be less motivated to prioritize your search. If you don’t mind signing an agreement for each property you view and have not yet found the right agent to represent you this is a good interim option.
• Non-exclusive, right-to-represent: You can work with multiple brokers, but only the one who finds your home gets paid. With this arrangement you are likely to find plenty of agents who hustle but they may not ultimately have the knowledge you need when it comes time to negotiate and get to the closing table.
• Exclusive right-to-represent: You commit to working with just one broker, ensuring dedicated service but requiring careful selection to find the right fit. If you have found an agent who inspires your confidence and adds value to the process this is the right course of action.

Key Terms in a Buyer-Broker Agreement

• Broker’s Duties: Your broker helps find properties, negotiate deals, and guide you through the very complicated closing process in NYC.
• Buyer’s Duties: You agree to work exclusively with your broker (in exclusive agreements), communicate openly, and seriously evaluate potential properties.
• Contract Term: Exclusive agreements typically last about three months, allowing time to find the right home.
• Representation: Understand whether your broker represents only you (buyer’s agent) or both you and the seller (dual agent), as dual agency can create conflicts of interest. If such a situation exists, your agent is required by law to inform you in writing.
• Fiduciary Duties: Your broker is legally obligated to act in your best interest, maintain confidentiality, and disclose all relevant details.
• Compensation: Typically, the seller pays the commission, but if they don’t, you may be responsible. While Manhattan commission rates have remained stable, there’s been a trend of slightly lower commissions in Brooklyn and Queens. However even in Manhattan they can vary by neighborhood and property type.
• Termination: Both you and your broker can terminate the agreement under specific conditions, ensuring you’re not stuck in an unfavorable partnership.

The Pros and Cons

These agreements promote transparency, ensuring buyers understand their broker’s obligations and how commissions work—especially now that sellers are no longer required to offer compensation. A buyer-broker agreement offers legal protection and ensures you have an expert advocating for you, but it also requires a level of commitment. A clear agreement helps you assess whether dedicated representation is worth your commitment. Choosing to work with an agent with whom you communicate clearly is obviously paramount.

The Role of a Buyer’s Agent & Fiduciary Duties

Your buyer’s agent plays a crucial role in guiding you through NYC’s complex real estate landscape. As part of this relationship, they must provide you with the New York State (NYS) Agency Disclosure Form, which outlines fiduciary duties like loyalty, confidentiality, and full disclosure. Your agent is legally bound to act in your best interest—negotiating favorable terms, assessing properties thoroughly, and maintaining transparency throughout the process. You will also be asked to sign a New York State Housing and Anti-Discrimination Disclosure Form designed to protect your rights as a consumer.

Understanding Compensation & New Brokerage Models

Traditionally, commissions are split between buyer and seller agents, but some firms now offer alternative pricing models. For example, some agents will offer a variety of service levels, allowing buyers to customize their level of brokerage support. What is important to remember is that commissions are always negotiable and your agent will be able to tell you before you view a property if the seller is paying the buyer’s broker commission and how much it is.

Final Thoughts

Buying a home in NYC is about more than just browsing listings—it requires strategy, the right partnerships, and a solid understanding of your commitments. A buyer-broker agreement provides structure and protection, ensuring you have expert guidance every step of the way. With the right agent and a clear agreement, you’ll be well on your way to securing your ideal home in the city.