Getty Images; iStock; Tyler Le/BIKirsten Ganas was ready to fire her real estate agent.It was late March, right in the thick of homebuying season in southwest Pennsylvania. Ganas and her partner, Austin McCarley, had recently learned they were expecting their second child, and they were thrilled at the prospect of upgrading from their two-bedroom rental. They were less enthused, however, about the services provided by their agent, Dan Waterhouse. He'd reached out to them in early January, after they requested their first home tour on Zillow; since then, Waterhouse had shown them roughly two dozen properties. He was nice but sometimes slow to respond, Ganas says, and he lived far from their desired area — no good in a fast-moving market. Shortly after getting outbid on a property, Ganas texted to let him know they'd be moving on.There was just one problem. When they met Waterhouse for that first home tour, he'd handed them a couple of documents: standard paperwork, he explained, that they would have to sign before seeing the home together. One of those documents contained language that exclusively bound the pair to Waterhouse's brokerage for a year. The only way to terminate that agreement, Waterhouse said, would be to get permission from Rita Sumney, the head of the brokerage. When Ganas contacted Sumney, she got more bad news: getting out of the agreement would come at a cost. Unless they paid an "early termination fee" or found another brokerage willing to pay Sumney a referral fee, they'd be tied to her brokerage well into January 2027. If they bought a home any earlier — even without using an agent at all — they'd still owe the full commission they'd agreed to: a flat fee of $995 plus a percentage of the sale price, which would likely amount to thousands of dollars."We just got that sick feeling about being stuck in this contract," Ganas tells me.Ganas and McCarley had signed a "buyer representation agreement," a contract outlining the terms of the relationship between buyer and broker. Until just a couple of years ago, this would have been unusual — agents typically waited to hand their client any formal documentation until later in the process. But thanks to a seismic legal settlement in 2024, most agents are now required to get a written agreement before they step through the front door with a client. One broker I spoke with at the time called it "the biggest change in 100 years."The new rule was intended to make sure buyers know exactly what they're signing up for when they enlist an agent. But consumer advocates warn that millions of prospective buyers risk being tethered to inept agents or agreeing to inordinate fees before they've had a chance to get a feel for the relationship. In many ways, these contracts are the most tangible byproducts of a settlement designed to shore up consumer protections. Two years in, though, the results are mixed."The idea that buyer-broker agreements have to be signed before they show any houses is great," says Doug Miller, a real estate lawyer in Minnesota who helped craft the class-action lawsuits that led to the settlement. "But the practice of springing this on a consumer at the threshold is amazingly unfair and dishonest."Not so long ago, many buyers' agents readily advertised their services as "free." Of course, this wasn't true — nobody works for free — but it may have felt true to buyers because of the roundabout way in which their agents got paid. The vast majority of buyers never cut a check to their representative. Instead, both brokers quietly banked a slice of the seller's haul. Here's how things would generally go:Jackie is selling her $500,000 home and agrees to pay a 6% commission to the brokers who make the deal happen.Her agent lists the house on the multiple listing service, or MLS — a local database where agents advertise homes for sale — and promises to pay a 3% commission to any agent who delivers the winning buyer.Jerome, with the help of an agent from another brokerage, offers to buy Jackie's home for the full asking price. The two sides hammer out a deal.After the sale closes, Jackie pays $30,000 to her broker, who then splits that amount with Jerome's broker. Both brokers walk away with $15,000.All of this money comes from the buyer's down payment and mortgage, but from Jerome's perspective, it's out of sight, out of mind.This state of affairs was upended in the fall of 2023, when the National Association of Realtors, the industry's main trade group, lost a multibillion-dollar, class-action lawsuit over agent commissions. The plaintiffs, a group of aggrieved sellers, argued that this method of paying agents forced them to accept inflated fees and opened the door to tactics such as "steering," which discouraged negotiations over commissions. The ensuing settlement, unveiled in the spring of 2024, included a few rule changes. Key among them was a new requirement for the vast majority of agents: before so much as touring a home with a client, t
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