How Real Estate Brokerages Are Reducing Risk In Buyer Representation

Buyer-broker agreements continue to take a prominent role in residential real estate transactions following the National Association of Realtors (NAR) commission lawsuit settlement and related practice changes. Brokerages say they have invested heavily in training, compliance systems and dispute resolution pathways.

Consumer advocates argue contracts remain complex, inconsistent and potentially unfair. Still there is confusion from agents about implementation and concern when buyers breach a contract. But, enforcement is happening. Recently, a Florida brokerage won $24,000 in arbitration after a buyer breached a mandatory broker agreement, and others have confirmed to HousingWire that they have also quietly sought and won reimbursement for breached contracts.

Interviews with brokerage executives and consumer advocates reveal a set of emerging best practices around buyer representation — including standardized agreements, early execution, clear buyer education and compliance systems tied to transaction workflows — that firms say reduce confusion, disputes and downstream risk.

Best practice: Operationalize buyer representation

Holly Mabery, chief brokerage officer at eXp Realty said eXp acted quickly after the settlement announcement and practice change date — preparing agents for new requirements across its nationwide network.

“We’ve absolutely operationalized it,” she told HousingWire. “From the time that the settlement was announced and the practice change date was enacted, we taught over 900 classes focused on preparing our agents for the practice changes, and that was over the course of about four months.”

She said training continued beyond the initial rollout and was supported by layered oversight designed to monitor compliance across states.

“Since that time, all throughout last year, we continue to have consistent trainings in every state for our agents,” Mabery said. “Then not only do we have the traditional audits that every broker must do, as far as contract review, we have a second layer oversight audit that goes back and reviews files in every state from both our teams as well as solo agents to see how we’re doing — to create a base level of how we’re implementing the practice change.”

Proactive conversations with buyers about representation and compensation at the start of the relationship are essential to reducing confusion and disputes, she added.

Executives say early, standardized execution — supported by ongoing training and layered oversight — has become a baseline expectation rather than a post-settlement adjustment.

Best practice: Embed buyer-broker agreements into transaction workflows

Dan Marello, broker of record for New York City at Compass uses a standardized national framework with region-specific oversight to implement buyer-broker agreements.

He described a centralized process embedded into transaction workflows that integrates disclosures and templates into the company’s technology platform.

“The broker of record in each region sets the (standard operating procedure), training and auditing process,” Marello said. “Since the buyer representation agreement (BRA) requirement is standard across the nation, many of our regions operate very similarly.

“In the New York City market, the BRAs are set up as packets and include all necessary disclosures right in our e-signature tool on our platform.” He says agents can generate agreements using templates and must secure signatures before touring properties.

Compliance checks are tied directly to agent compensation and transaction processing. “An agent cannot get paid unless they upload a signed copy of the BRA with their client and the necessary disclosures,” said Marello.

Marello said Compass uses a document checklist system to ensure compliance early in the transaction lifecycle. “Agents create a Business Tracker Folder for each client directly in the Compass platform,” he said. “Depending on the client’s role (buyer, seller, landlord, renter), there will be a compliance checklist for the agent to follow and upload the appropriate documents. If the compliance list is incomplete or inaccurate (e.g., missing signatures), the team cannot pay out the deal.”

By embedding buyer-broker agreements directly into transaction workflows and compensation processes, firms reduce the likelihood of missed documentation and create consistency across markets, executives said.

Best practice: Offer flexible agreement terms and clear buyer choices

Mark Joyner, president and principal broker of Napier Realtors ERA in Richmond, Va., says his firm has required agency agreements for more than a decade — predating the settlement-driven practice changes.

“It is policy,” he said. “We empower our agents with knowledge and facts which help all of our buyers may great decisions. Our agreements are flexible and can be made for a day, a specific address or a range of properties and three months. Educated choice for our clients is top priority and always has been.

“Our MLS has standard forms and our state association does as well. We built specific agent talk tracks to educate all buyers of their choices.”

Executives say that flexible agreement terms, such as short durations or property-specific coverage, can help buyers understand representation without feeling locked into long-term commitments.

Best practice: Align national standards with state-level guidance

Mabery said eXp relies on a regulatory relations team and legal counsel to interpret national and state-level guidance on buyer-broker agreements.

She said training continues throughout the year and is reinforced through internal and external legal consultation.

“On top of that, we consult with our internal legal department and any outside counsel state to state, to make sure that we are following not just national guidelines, but also state guidelines, because we know the states can be a little bit more restrictive,” Mabery said.

“When in doubt, our local brokers will take the lead and then ask us for what they need. But when things are coming from NAR, we have a dedicated team that helps support all of our brokers.”

Best practice: Address disputes early and document resolution paths

Buyer-broker agreements can generate disputes over compensation and representation obligations. Mabery says eXp attempts to resolve disputes internally before they escalate to arbitration or ethics hearings.

“Let’s say the buyer walks away and does not end up paying the agent appropriately,” she said. “Then, we have a path internally where we work out with our legal counsel to support that agent and come to an agreement with the buyer to basically take that original buyer-broker and nullify it — or honor the pieces of it that need to be.”

She said ethics complaints are handled directly with buyers when possible.

“If a buyer is saying, ‘Hey, our agent has violated the code of ethics,’ they can come to us as the brokerage or the broker, and we seek to help remedy that face-to-face immediately with that buyer,” said Mabery. “The buyer can always take next steps through the state association or the local association if they have a complaint, but we seek to always try and resolve that upfront with the buyer.”

Marello said Compass has had few disputes in the first year of mandatory buyer-broker agreements and prioritizes internal resolution.

“I would say that over the last 10 years, the industry as a whole has been in the spotlight and the target of litigation for many reasons,” he said. “I see this as a positive and a time when brokerages should examine the ethics of their agents and show little tolerance for bad actors, as they can become very costly — both financially and for the overall image of the company.”

Brokerages operating across multiple states said ongoing consultation with legal counsel and regulatory teams is critical to maintaining consistency while accounting for state-specific requirements.

Joyner echoed the notion of up-front transparency being key.

“If you do everything right from the beginning then it does not come back to bite you around back,” he said. “If firms are seeing an increase in arbitrations and conflict, they shouldn’t look at the back end as the problem. They need to fix the start of the relationship.”

Real estate leaderes emphasize that clearly defined internal resolution processes, communicated to both agents and buyers, can prevent misunderstandings from escalating into formal complaints or arbitration.

Best practice: Avoid execution and communication gaps

Marello says failing to secure signed agreements and failing to explain them are frequent mistakes that can trigger disputes.

“The number one mistake agents make is not getting them signed, only to find out the buyer went back to the property and purchased it,” he said. “The second mistake would be not properly explaining the nature of the agreement to the client so they understand what they are signing and ultimately bound to.”

Mabery said buyer misunderstanding remains a major challenge across the industry — adding that many buyers mistakenly believe they can save money by bypassing representation.

“Buyer’s misunderstanding is that they think they can go directly to a listing agent and in theory, get a better deal, when in fact, they are going into that that property basically unrepresented and unarmed,” she said.

Industry is “underestimating ongoing contract problems”

Stephen Brobeck, senior fellow at the Consumer Federation of America, says the industry may be underestimating ongoing contract problems.

“I think the industry believes that it has solved this problem, the problems related to contracts, or at least, it’s now more preoccupied with other issues — like the attempted Compass dominance of the whole industry,” he said. “The contracts vary greatly in terms of their length, complexity, legalese and unfair provisions to consumers.

“The model contracts developed by the state Realtor associations are very difficult for consumers to comprehend and contain some unfair provisions.”

Brobeck cited Maryland as an example of provisions he considers problematic.

“I was quite surprised, since Maryland tends to be one of the more pro-consumer states in terms of how they protect homebuyers and sellers,” he said. “They allow buyer agents to collect the difference between the fee offered by the seller and the fee that they agreed to with the buyer.

“That excess should either be retained by the seller or it should go to the benefit of the buyer. You can have a buyer agent intervening, saying, ‘I negotiated a 2% fee with my buyer because the buyer wouldn’t sign the contract over 3% and now I’m asking you, the seller, to pay 3%,'” Brobeck said. “Often, the listing agent agrees to facilitate that request, because, after all, almost all the listing agents are buyer agents too, right? They’re trying to establish a norm in the industry.”

He also identified binding arbitration clauses as problematic.

“I did a pretty careful report on listing agent contracts before the settlement, and found that some of those contracts required mediation and then required binding arbitration if the mediation didn’t work,” Brobeck said. “Essentially, you’re telling consumers that you can’t get access to the courts.”

Consumer advocates said best practices must also account for contract clarity and perceived fairness, warning that overly complex agreements may undermine buyer trust.

Real estate is adapting

As real estate adapts to the post-settlement environment, buyer education and contract clarity are likely to shape the next phase of best practices — with brokerages and regulators closely watching how disputes, enforcement and consumer perceptions evolve.

Firms that treat buyer representation as a defined process — rather than a transactional formality — are better positioned to navigate the post-settlement environment while reducing confusion for both agents and buyers.