The buyer agency agreement is the document that authorizes a buyer’s firm and its agents to provide brokerage services to the buyer as a client. It is, in essence, the counterpart of the listing contract that the seller executes to authorize the listing firm and its agents to provide brokerage services to the seller as a client. The buyer agency agreement specifies the extent of the buyer’s firm’s authority to act on behalf of the buyer and the performance required to earn commission. No real estate licensee may provide client services to a buyer unless they are working under a buyer agency agreement.

When did we have our first buyer agency agreement in Wisconsin?

The first buyer agency agreement in Wisconsin was a WB-36 Exclusive Buyer Agency Contract form dated January 1, 1986. Yes, the history of buyer agency agreements in Wisconsin goes back further than most of us ever imagined! Looking at the 1995 version that replaced that 1986 contract, it is only two pages long but touches on many of the same key components found in the six-page WB-36 Buyer Agency Agreement (2024) we have today. While other states have not incorporated certain buyer representation practices into their law, Wisconsin has encouraged and required written buyer agency agreements for buyer clients for almost 40 years.

Are Wisconsin licensees required to use the approved buyer agency agreements, such as the 2024 version of the WB-36 Buyer Agency Agreement?

Yes. Wisconsin law requires that Wisconsin licensees use the WB forms approved by the Real Estate Examining Board (REEB). Wis. Stat. § 452.05(1)(b) authorizes the REEB to “approve forms for use in real estate practice.”

No Wisconsin real estate licensee may provide client services to a buyer unless they are working under a buyer agency agreement; client services for a tenant likewise require a tenant representation agreement. 

The definitions in the statutes tell us that a “client” means a party to a transaction who has an agency agreement with a firm for brokerage services, and that an “agency agreement” means a written agreement between a firm and a client in which the client authorizes the firm to provide brokerage services to the client. 

Are any of the pro-consumer policies addressed in the National Association of REALTORS^®’ (NAR) proposed settlement agreement found in the WB-36 we have today?

Wisconsin WB forms have strong commission transparency provisions similar to many of those mentioned in NAR’s proposed settlement agreement. The current buyer agency and tenant representation agreements have long blank lines to write in the commission. There is also a place to write in other compensation on additional blank lines. The Payment by Owner or Owner’s Agent section in the WB-36 authorizes the firm to seek payment of commission from the owner or owner’s agent. It allows the buyer’s firm, for example, to receive all or part of the firm’s commission from the seller or the listing firm as long as both the buyer and seller consent.

What does the buyer agency agreement tell buyers about how commissions are determined?

The current WB-36 indicates the determination of commission is a mutual decision: “Buyer and the Firm agree the Firm’s commission shall be ______________________________.”

The Payment by Owner or Owner’s Agent section in the buyer agency and tenant representation agreements explains that when a firm seeks payment of commission from the owner’s agent, that means seeking payment from the listing firm through the multiple listing service or compensation agreements.

The buyer agency and tenant representation agreements also state that, “There is no standard market commission rate. Commissions and types of service may vary by firm and are negotiable based on the firm you hire.”

What does the buyer agency agreement tell us about how the buyer agency commission is earned?

The applicable commission is earned in the WB-36 if the buyer, or a person acting on behalf of a buyer, acquires a property or enters into an enforceable contract to acquire a property. Commission is earned regardless of whether the purchase price falls outside of any price range stated in the WB-36. The buyer’s agent need not have been involved in the location of the property or in the negotiation leading up to the acquisition of the property. The buyer’s firm can earn commission if a property is obtained by the buyer during the WB-36 contract term regardless of who helps the buyer obtain that property.

What should a buyer know about how the buyer agency commission or fee will be paid?

A buyer’s agent may receive commission from three sources or a combination thereof:

1. The buyer, per the buyer agency agreement.
2. The listing firm, per the MLS or another compensation agreement.
3. The seller, as negotiated in the offer to purchase. 

A buyer’s firm may ethically suggest or recommend that the buyer ask the seller to pay some or all of the buyer’s firm’s fee pursuant to Article 16 of the REALTOR^® Code of Ethics and NAR Case Interpretation #16-17. The buyer may condition the offer upon the seller paying some or all of the buyer’s firm’s commission on behalf of the buyer as a seller’s expense at closing.

Wis. Stat. § 452.133(3)(a) provides that the buyer’s firm must have the prior written consent of the buyer and seller to accept compensation from the seller because the seller is not the buyer’s firm’s client. The WB-36 Buyer Agency Agreement authorizes the buyer’s firm to accept compensation from the owner or seller, while consent from the seller would need to be obtained in the offer.

It is a violation of the REALTOR^® Code of Ethics if the offer is used to modify the listing firm’s offer of compensation, but it is not a violation of the Code of Ethics for a buyer to ask the seller to pay the buyer so the buyer may pay the buyer’s firm, or to ask the seller to pay the buyer’s firm at closing on behalf of the buyer. 

Why should a buyer choose buyer agency? What should a licensee tell a consumer?

The buyer’s agent represents the interests of the buyer but also must know how to work constructively with the listing agent so that the parties are satisfied with the transaction: the seller sells and the buyer buys. Acting in an adversarial way is not the most effective way to represent a buyer. If a buyer does not have a buyer agency agreement with the agent, the agent can’t give advice or opinions contrary to the interests of the seller.

A buyer has buyer agency with a firm when the buyer signs a buyer agency agreement with the firm and becomes the firm’s client. Most commonly, that is achieved with a WB-36 Buyer Agency Agreement, which is a state-approved form for buyer agency. Without buyer agency, an agent must provide fair treatment and draft offers as the buyer directs but cannot give a buyer advice or opinions when engaging in negotiations or writing an offer to purchase. 

Here are just some of the things a buyer’s agent can — and should — do for a buyer:

• Give a negative opinion or critique of a seller’s property beyond disclosing material adverse facts.
• Recommend or suggest an offering price or give the buyer an opinion about whether a particular house is priced too high or too low.
• Structure an offer and draft offer provisions with the buyer’s best interests in mind.
• Recommend and assist the buyer with negotiation strategies for the best price and terms.
• Disclose all information and research a property’s history and liens so the buyer can make an informed decision.
• Give advice within the scope of the agent’s expertise as a licensed real estate professional.

WRA consumer brochures

The WRA offers several consumer brochures to help real estate consumers understand their Wisconsin real estate transactions:

• The “Why Should a Buyer Choose Buyer Agency?” consumer handout helps real estate consumers understand the role of a buyer’s agent in a Wisconsin real estate transaction.
• The “Buyer Agency” consumer brochure provides a general overview of Wisconsin buyer agency.
• The “Explanation of the WB-36 Buyer Agency Agreement” consumer brochure offers a section-by-section analysis of the WB-36 form used in real estate practice. This brochure is available for consumers in both English and Spanish.

Download these brochures and more on the WRA's consumer brochures webpage.