Tennessee guide

Buyer Representation Agreement in Tennessee: Post-NAR Settlement Requirements

Q: Do I really have to sign a contract just to tour a house in Tennessee?

Yes. Since August 17, 2024, the NAR settlement requires a signed written buyer representation agreement before an agent who's a REALTOR can take you on any tour, including the first one. Tennessee law already required this kind of agreement once you became a client of an agent, so the rule isn't new to the state, it just got tighter on timing.

Q: Can the agreement just say 'somewhere between 2% and 3%'?

No. The NAR settlement rules ban vague or open-ended compensation language. The agreement has to lock in a specific number — a flat dollar amount or a specific percentage — before you sign.

In Tennessee, before an agent can tour a home with you, you have to sign a written buyer representation agreement that spells out exactly what you'll pay them.

TL;DR

In Tennessee, before an agent can tour a home with you, you have to sign a written buyer representation agreement that spells out exactly what you'll pay them. The amount has to be a specific number or percentage you both agree on, not a blank or a range, and it's always negotiable. If the seller covers some or all of your agent's fee, your out-of-pocket goes down by that much; if they cover none, you owe the full amount yourself unless you negotiate a credit at closing.

Before you start — 8 things to know

In Tennessee, you'll sign a written buyer representation agreement with your agent before they can take you on a single home tour, including the first one. This rule kicked in August 17, 2024 as part of the settlement that changed how buyer-agent relationships work nationwide.
The agreement has to list a specific dollar amount or percentage your agent will be paid. Blanks, ranges (like '2-3%'), or vague language are not allowed — the number has to be filled in and agreed to before you sign.
Your agent's compensation is always negotiable. No law sets the rate, and the buyer representation agreement itself has to say so in writing before you sign.
The buyer representation agreement also has to spell out how long it lasts and which areas or types of properties it covers. That way you're not accidentally locked into one agent statewide for a year when you only wanted help on a single Nashville condo search.
Tennessee law has long required that a true client relationship with an agent be put in writing, separate from the federal settlement rules. That's why the new national requirement didn't create much friction in Tennessee — state law was already pointing in the same direction.
If the home you buy in Tennessee offers cooperating compensation to your agent that matches or beats what you agreed to pay, you owe nothing extra out of pocket for your agent's fee. If it's less, you owe the gap; if there's none offered, you owe the full amount yourself.
You can ask the seller to chip in toward your agent's fee as a concession written into the purchase contract. If the seller agrees, the credit is applied at closing and lowers what you'd otherwise pay your agent directly.
Read the compensation section out loud before signing. Buyers who don't fully understand the fee terms upfront are the ones who get blindsided at the closing table — and by then the agreement is binding.

The timeline — step by step

You contact a Tennessee agent and have an initial buyer consultation. The agent walks you through how they get paid, what services they provide, and how long they'd want to be your exclusive agent.
You and the agent negotiate the specific compensation — a dollar amount or percentage — that you'll pay them. You also agree on the term length, geographic area, and property type the agreement will cover.
You sign the written buyer representation agreement (in Tennessee, most agents use the Tennessee REALTORS Exclusive Buyer Representation Agreement). This must happen before the agent takes you on your first home tour, whether in person or virtually through the .
Your agent starts showing you homes and representing you as a client. Under Tennessee law, that client-level relationship is what the written agreement officially documents.
When you find a home you want to make an offer on, you check what cooperating compensation (if any) the seller is offering to a buyer's agent. You compare that to what you agreed to pay your agent in the representation agreement.
If there's a gap between the seller's offer and your agent's fee, you can ask the seller for a concession in the purchase contract to cover the difference at closing. The seller can say yes, no, or counter.
At closing, your agent's compensation is paid according to the terms you agreed to — partly by the seller's cooperating compensation, partly by a concession if you negotiated one, and partly out of your own pocket if anything is still owed.

Common questions

Do I really have to sign a contract just to tour a house in Tennessee?

Yes. Since August 17, 2024, the settlement requires a signed written buyer representation agreement before an agent who's a REALTOR can take you on any tour, including the first one. Tennessee law already required this kind of agreement once you became a client of an agent, so the rule isn't new to the state, it just got tighter on timing.

Is the agent's commission set by law in Tennessee?

No. There's no law that sets buyer-agent commission rates, and the agreement itself has to state that compensation is negotiable. The exact percentage or dollar amount is something you and the agent decide together before you sign.

What happens if the seller isn't offering to pay my agent?

Then you owe whatever you agreed to pay your agent in your representation agreement, out of your own pocket. You can try to negotiate a seller concession in the purchase contract that's applied at closing to cover some or all of your agent's fee, but the seller doesn't have to agree.

Can the agreement just say 'somewhere between 2% and 3%'?

No. The settlement rules ban vague or open-ended compensation language. The agreement has to lock in a specific number — a flat dollar amount or a specific percentage — before you sign.

How long am I locked in to one agent?

Only as long as the agreement says. The term length, along with the geographic area and the type of property it covers, has to be written into the agreement. If you only want help looking in one Tennessee city for 30 days, you can negotiate it that way before signing.

What's the difference between being an agent's 'client' and just a 'customer' in Tennessee?

Tennessee law treats them differently. A client gets full representation and the agent's full duties, but that relationship has to be documented in writing — that's exactly what the buyer representation agreement does. A customer gets only basic, limited services and no representation.

Can I negotiate the fee down or change it before signing?

Yes. Every part of the agreement, including the compensation, the length, and the area it covers, is negotiable before you sign. Once you sign, though, the terms are binding, so it's much easier to push back at the consultation than at the closing table.

Glossary

2 terms

NAR — National Association of Realtors: The national trade group for real-estate agents. The 2024 NAR settlement is the legal deal that changed how buyer's agents get paid.
MLS — Multiple Listing Service: The shared database agents use to list and find homes for sale. Most homes you'll see online started here.

Sources

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