Kirsten Ganas and Austin McCarley wanted to buy a house. They requested a tour through Zillow, and before they could walk through the front door, their agent asked them to sign a piece of paper. It was a buyer representation agreement.
What they did not realize at the time was that contract locked them in for a year. No easy exit. No free way to leave.
They signed it and then spent months looking at roughly two dozen homes with that agent. But after a while, they wanted to switch. That is when they learned how sticky the deal really was.
"We just got that sick feeling about being stuck in this contract," Ganas told Business Insider.
The couple had agreed to pay a $995 flat fee on top of a percentage of the sale price. Either way, the couple was bound to pay the entire commission they had promised - the $995 flat fee plus the percentage - if they closed on any home before the contract ended.
Their contract was set to expire in January 2027. That is a long time to be locked into one agent, especially if things are not working out.
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This mess traces back to a major legal settlement in 2024 that changed how real estate commissions work. Before that settlement, a seller typically paid the full commission - often around 6% total on a $500,000 home, which worked out to $30,000 split between the buyer's broker and the seller's broker at $15,000 each. The buyer did not always sign anything upfront.
Now the rules are different. Most agents are required to have a signed buyer representation agreement before they show you any homes. At least 15 states required that before 2024.
Now it is standard practice across the country. The idea was to make things more transparent, so buyers know exactly what they are paying.
But critics say the change backfired. According to Doug Miller, a Minnesota real estate lawyer who helped bring the lawsuits that led to the settlement, "The practice of springing this on a consumer at the threshold is amazingly unfair and dishonest."
And he is right. Getting handed a legal contract right before a tour - when all you want to do is see the kitchen - is not exactly the ideal moment to assess fine print. Prentiss Cox, a consumer-protection law professor at the University of Minnesota, asked a fair question: "How many people could read that contract and understand all the implications of it?"
Consumer advocates say there is a better way. Sharon Cornelissen, who oversees housing policy at the Consumer Federation of America, noted, "For a lot of buyers, this is completely new."
That means interviewing multiple agents before agreeing to anything. Ask about fees, commission rates, and how long the contract lasts. Some agreements might be for just one home or one month, not a full year. The key is to read the contract - really read it - before you sign, not after.
The settlement also shifted how agents are compensated. In the past, buyer agents typically received their share of the seller-paid commission, so buyers rarely saw the cost directly. Now, with signed agreements, buyers often agree to pay their agent either a flat fee or a percentage, sometimes adding thousands to their upfront costs. This new structure makes it even more important to negotiate terms before locking in.
The bottom line: That piece of paper is not just a formality. It is a binding deal that can keep you tied to one agent for a year or longer, even if you change your mind. In a market where every penny counts, getting stuck with a bad deal is the last thing your homebuying budget needs.
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