Maryland Buyer Agency and Compensation, Explained
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If you are confused about who pays a buyer's agent and why you must sign something before looking at houses, that is not your fault. The rules changed, the coverage was poor, and much of what people repeat is out of date. Here is the whole thing, including the parts that are less convenient for me to say.
This changed, and nobody explained it well
If you are confused about who pays a buyer's agent and why you have to sign something before you can look at houses, that is not your fault. The rules changed, the coverage was poor, and a great deal of what people repeat about it is out of date or simply wrong.
So here is the whole thing, plainly, including the parts that are less convenient for me to say.
One caveat before I start: this describes how buyer representation generally works in Maryland and how I work. The actual terms of whatever agreement you sign govern over any general description, and nothing here is legal advice.
Why you sign before we tour
A written buyer agreement is now required before an agent who works through the MLS can tour homes with you. Maryland also has its own agency disclosure requirements that predate that change.
I know it feels backwards. You have not seen a house, you are not sure you are ready, and somebody is handing you a form.
Look at what the form actually does. Before it is signed, I am a friendly stranger with access to a lockbox. After it is signed, I am legally your agent, which means I am obliged to put your interests ahead of my own and ahead of the seller's. That obligation is the entire product. Without the document there is no obligation, and you would be walking into the biggest purchase of your life relying on somebody's good nature.
A reasonable agreement should also be limited in scope and time. If you are not sure about me, sign something short. I would rather earn a longer term than trap somebody into one.
What I owe you
Under the agreement, these are obligations rather than courtesies:
- Loyalty. Your interests come first. Where mine and yours conflict, yours win — including when the outcome that is best for you pays me less.
- Confidentiality. What you tell me about your finances, your motivation and your ceiling stays with me. This one matters more than buyers realise, and it is exactly where a weak agent costs you money without your ever finding out.
- Disclosure. Anything I know that bears on the property or the transaction, I tell you, including things that might talk you out of a house I would otherwise be paid on.
- Reasonable care and skill. Competence, not just enthusiasm. Reading the contract, catching the deadlines, noticing the problem.
- Accounting. Full accounting for any money that passes through my hands or my brokerage's.
What you owe me
Shorter, and mostly common sense.
Work with me rather than around me for the term we agree. Tell me the truth about your finances and your timeline — I cannot protect you from a problem you have hidden, and I have watched buyers lose houses because their agent learned about a credit issue from the lender in week three. And tell me before you walk into an open house or a builder's sales office, because that is the single most common way a buyer accidentally damages their own position.
That last one deserves explaining rather than just warning. At an open house or a model home, the agent present works for the seller or the builder. If you register or sign in without noting that you are represented, some builders will later take the position that you came in unrepresented, and you can lose the ability to bring me in at all. It costs nothing to tell them you have an agent. It can cost a great deal not to.
How my fee is set
In the agreement, between you and me, before we start.
It is not set by the seller. It is not set by the MLS. There is no standard percentage, and anybody who tells you there is one is mistaken. It is a negotiated number between a client and a professional, like any other.
What it should reflect is the work. If you want to understand what you are buying, that is set out in what a buyer's agent does beyond opening doors.
Who actually pays it is a separate question
This is the distinction that gets lost constantly, and it is worth slowing down on.
What my fee is and where the money comes from are two different things. The fee is agreed between us. The source is negotiated on each purchase, and there are several possibilities:
- The seller offers to cover some or all of it. This still happens routinely, and many sellers continue to do it because it widens their buyer pool.
- We ask for it as a term of your offer. Compensation is now a negotiable term of the contract like the settlement date or the deposit, and it can be requested the same way.
- You pay it directly. Sometimes at settlement, sometimes structured differently depending on your loan.
- Some combination. A seller covers part and the gap is handled another way.
I am not going to promise you that the seller will pay my fee. Nobody can honestly promise that. An agent who does is either guessing or telling you what you want to hear, and you should treat it the same way you would treat any other promise about somebody else's money.
What I will do is tell you the realistic options on your specific purchase and negotiate for the outcome that costs you least. On most of my transactions, that conversation goes well.
Settle it before the offer, not after
Compensation belongs in the same planning session as your ceiling and your inspection strategy, because it is part of what your purchase costs.
The failure mode is easy to picture. A buyer tours, finds a house, writes an offer, and only then discovers that the seller is offering less toward buyer-agent compensation than expected, leaving a gap to be found in cash at settlement. That is a genuinely bad week, and it is entirely avoidable by asking the question before we write.
So I check what is being offered on any property we are serious about, and we decide how to handle the gap if there is one — ask the seller, adjust the price, or plan for it — as part of building the offer. See how to evaluate a whole offer.
The listing agent is not your agent
People call the number on the sign because it seems efficient. It is the opposite.
The listing agent has a signed agreement with the seller and duties that run to the seller. They are obliged to get that seller the best outcome available, which by definition is not your best outcome. They can show you the house, answer questions about it and write down what you say. Everything you say is theirs to use on their client's behalf, and they are not doing anything wrong by using it.
There is also a middle arrangement to know about. In Maryland, a brokerage can act as a dual agent where both sides are represented by the same firm, with each client assigned a different agent and with written consent. It can work, and you should understand that consenting to it changes what your agent is permitted to tell you.
If you want somebody whose obligation runs to you, that has to be a separate person with a separate agreement. That is the whole point of the document you are being asked to sign.
Questions worth asking any buyer's agent
Before you sign anything, ask these and listen to how specific the answers are.
What is your fee, and what happens if the seller offers less than that? How long is the agreement, and can I get out of it if this is not working? What do you do after you send my offer? What will you tell the other side about me, and what will you keep to yourself? Have you closed on a property like the one I am after — waterfront, new construction, well and septic?
An agent who works deliberately will answer all of those easily. An agent who has not thought about them will give you a feeling instead of an answer, and a feeling is what you will get for the rest of the transaction.
Where buyers get stuck
They sign the first agreement handed to them without reading it, or they refuse to sign anything and end up unrepresented at an open house telling a seller's agent exactly how much they love the kitchen.
Neither is necessary. Read it, ask what each paragraph means, negotiate the term and the fee, and then have somebody whose actual job is you. The rest of the purchase is in the complete guide to buying a home in Southern Maryland.
Frequently Asked Questions
It is required of agents working through the MLS, and Maryland has its own agency disclosure requirements. Before it is signed an agent has no obligation to you; after it, they must put your interests ahead of their own.
Loyalty, confidentiality, disclosure of what they know about the property and transaction, reasonable care and skill, and full accounting of funds. Where your interests conflict with theirs, yours prevail.
To work with them rather than around them for the agreed term, to be truthful about your finances and timeline, and to tell them before contacting a listing agent or a builder.
It is negotiated in writing between you and the agent before you start. It is not set by the seller or the MLS, and there is no standard percentage.
Yes. A seller may offer to cover some or all of it, it can be requested as a term of your offer, or you may pay it directly. Which applies is negotiated on each purchase.
No honest agent can. Anyone promising it is guessing about somebody else's money. The realistic options should be explained for your specific purchase instead.
Before writing an offer. Discovering a gap after you are under contract is how buyers end up needing unexpected cash at settlement.
Their duty runs to the seller. Maryland permits dual agency within one brokerage with written consent and separate agents, but consenting changes what your agent may tell you.
Ask Me the Hard Questions First
Bring the list at the end of this article to our first conversation. I would rather answer all of it up front than have you wondering later.
Dawn Riley
Associate Broker, Realtor, Master Certified Negotiator
The Riley Team at Deep Roots Real Estate
410-414-2438
dawn@dawnriley.net
https://dawnriley.net/