Buyer-Broker Agreements in California: AB 2992 and the NAR Settlement
In California, a buyer’s agent must have a signed, written buyer-broker representation agreement with you no later than the moment you sign an offer, and the agreement can’t last longer than three months. That is state law under AB 2992, now Civil Code section 1670.50, in effect since January 1, 2025. Separately, agents who are Realtors or who work through an MLS have had to get a signed agreement before you tour a home, in person or virtually, since the NAR settlement practice changes took effect on August 17, 2024.
The two rules overlap but aren’t the same, and neither sets what your agent is paid. This guide explains what each requires, what the agreement has to say, how a buyer’s agent can be paid, how to end an agreement, and the questions worth asking before you sign. It fits into the larger home-buying process at the very first step: the first showing.
Two rules, two deadlines
California’s Department of Real Estate (DRE) points out that the state law and the national settlement set different timing. In practice, if your agent is a Realtor or uses the MLS, the earlier deadline (before touring) is the one you’ll meet.
| Question | AB 2992 (Civil Code 1670.50) | NAR settlement practice changes |
|---|---|---|
| Who it binds | California licensees who represent buyers | Realtors and MLS participants working with buyers |
| When to sign | As soon as practicable, and no later than when the buyer signs an offer | Before touring a home, in person or virtually |
| Effective | January 1, 2025 | August 17, 2024 |
| Length | No more than three months; no automatic renewal | No national cap; state law applies |
| Compensation | Must be a stated term of the agreement | Must be objectively ascertainable, not open-ended, and is the most the agent can receive from any source |
| Who enforces | DRE | Associations and MLSs; DRE says it does not enforce the settlement |
DRE’s adopted regulations narrow the gap. Under 10 CCR 2906.2, it is presumed practicable for a buyer’s agent to get the signed agreement before showing you a property, in person or virtually. The presumption can be rebutted, but it means “I’ll send it when we write an offer” is no longer the normal practice.
What a California buyer agreement has to say
Civil Code 1670.50 lists terms the agreement must include, at a minimum:
- The broker’s compensation, stated in the agreement rather than left to the listing side.
- The services the agent will provide.
- When compensation is due, for example at close of escrow.
- How the contract terminates, including an expiration date no more than three months after it’s signed.
Before you sign, the agent must also give you the agency disclosure form required by Civil Code 2079.14, which explains what a buyer’s agent, a seller’s agent and a dual agent each owe you.
The three-month limit, precisely
DRE’s regulation (10 CCR 2906.1) defines “three months” as 90 calendar days, starting the day after the last party signs, unless you agree on a later start date. The agreement can’t renew itself. A renewal must be in writing, dated and signed before the original expires, and it is capped at three months too. An agreement that breaks these rules is void and unenforceable under the statute.
One exception: the three-month cap doesn’t apply when the buyer is a corporation, limited liability company or partnership. An investor buying through an LLC may see a longer term, so read it closely.
Who pays the buyer’s agent in California
Under a buyer agreement, you are the one who owes your agent the compensation you agreed to. That doesn’t mean you always write the check. DRE lists the options a buyer has when a seller isn’t offering to cover the fee:
- Ask the seller to pay some or all of it as part of your offer, for example as a seller concession.
- Pay your agent yourself, out of pocket at closing.
- Walk away and look for a property where the terms work.
- Buy without representation, if your agreement allows it.
Since August 17, 2024, offers of buyer-broker compensation can’t be published in the MLS, so a buyer’s agent learns what a seller will contribute by asking, and your offer is where you request it. A listing broker may also agree to share part of its fee. If you plan to ask for a credit, our guide to seller concessions in California explains how credits are written and how lender limits can cap them. Diamond may refer you to partners we work with; you’re free to choose any provider.
The “from any source” cap
The amount in your agreement is the most your agent can be paid for that representation, whoever pays it. A hypothetical example: if your agreement says 2% and a seller is willing to contribute the equivalent of 2.5%, your agent can still receive only 2%. The other 0.5% is something to negotiate in your offer, such as a lower price or a credit toward your costs, within what your lender allows.
Commissions are not set by law. DRE says they are “fully negotiable under California law” and warns that an agent who describes a “standard” rate is misrepresenting the law. NAR’s consumer guide lists $0, a flat fee, a percentage or an hourly rate as possible structures.
For how the fee fits with escrow, title and other charges, see who pays closing costs in California.
Touring, open houses and virtual showings
You don’t need to sign anything to walk into an open house on your own or to ask an agent about their services, according to NAR’s consumer guide. DRE’s regulation adds that a seller’s agent who is acting only for the seller is not acting as a buyer’s agent when showing the property, including at an open house.
A “virtual showing” counts as touring. DRE defines it as a live or recorded digital walk-through conducted at your direction when you’re not physically there. Out-of-area buyers who want an agent to walk a house on video should expect to sign first.
If you contact the listing agent directly and want them to represent you as well, that is dual agency. It must be disclosed to both sides in writing, and DRE notes your own buyer agreement may need to allow it without leaving you owing two agents.
Term, scope and how an agreement ends
NAR’s guide says you can negotiate the services, the compensation and the length of the agreement, and that agreements can be changed by mutual consent. The points that most often matter later:
- Exclusive or not. Ask whether the agreement makes this agent your only representative for the term, or whether you may work with others.
- Scope. An agreement can be written for a specific property, a set of towns or a property type. A buyer looking at both a Sonoma County home and a Marin rental, for example, may want that spelled out.
- Cancellation. Read how either side can end it early and how much notice is needed.
- Tail provisions. Ask whether you would owe anything if, after the agreement ends, you buy a home the agent showed you.
If an agent asks for a fee before providing services, DRE says advance fees require the broker to submit an advance fee agreement to the department and receive a “no objection” letter first. Fees collected after a service is performed are a different matter.
Questions to ask before you sign
- What exactly are you charging, and how is it calculated: a flat fee, a percentage, or something else?
- What happens if the seller agrees to pay less than that, or nothing?
- When is the fee due, and is it owed if escrow fails or I cancel?
- What services are included: showings, market analysis, offer drafting, negotiating repairs, attending inspections?
- Is the agreement exclusive, and what area or property types does it cover?
- When does it expire, and how can I end it before then?
- Would you ever act as a dual agent, and how would that work under this agreement?
- Will you look up your license with me? DRE’s public license lookup shows status and any discipline.
DRE’s own red flags are vague or hidden fees, pressure to sign quickly, verbal promises that aren’t in the document and undisclosed dual agency. Our list of tips for choosing a real estate agent covers the rest of the interview.
How the agreement fits with the rest of your purchase
The buyer agreement is the first contract in a purchase, and it shapes the others. The compensation request goes into your offer on the California residential purchase agreement, alongside price, deposit and contingencies. The seller’s side has a mirror document, the listing agreement, which sets what the seller pays its own broker and whether the seller is offering anything toward a buyer’s broker.
First-time buyers can see where it sits in the full sequence in our first-time homebuyer’s guide for California.
How Diamond handles buyer agreements
We go through the agreement with you before the first tour, in person or on a call, and leave the compensation, term and scope blank until you’ve agreed to them. Compensation is written as a defined amount, the term stays within the three-month limit, and if you want the seller to cover some or all of the fee, we write that request into each offer so you can see it.
Our buyer representation covers the counties we serve, with local pages for Sonoma County buyers and Marin County buyers.
Questions people ask
Do I have to sign a buyer agreement to see a house in California?
To tour with a Realtor or MLS agent, yes: the NAR settlement practice changes require a signed agreement before touring, in person or virtually. State law requires one no later than when you sign an offer. Walking into an open house on your own doesn’t require one.
How long does a buyer representation agreement last in California?
No more than three months, which DRE defines as 90 calendar days starting the day after the last party signs. It can’t renew automatically; a renewal must be in writing and signed before it expires. Agreements with corporations, LLCs and partnerships are exempt from the cap.
Who pays the buyer’s agent commission in California?
You owe your agent whatever your agreement says, but you can ask the seller to pay some or all of it in your offer, and a listing broker may share its fee. Whatever is agreed, your agent can’t receive more than the agreement’s amount from all sources combined.
Is there a standard buyer’s agent commission in California?
No. DRE says commissions are fully negotiable under California law and that describing a standard rate misrepresents the law. Compensation can be a flat fee, a percentage, an hourly rate or $0.
Can I cancel a buyer-broker agreement?
Read the agreement’s termination section, which state law requires it to include. Agreements can also be changed or ended by mutual consent. Ask before signing what notice is required and whether anything is owed for homes you were shown.
Does a buyer agreement mean I’ll pay more for a house?
Not necessarily. The agreement sets what your agent is paid; who funds it is negotiated in each offer. A seller can still contribute, and some buyers ask for that instead of a price reduction.
What is AB 2992?
A 2024 California law, effective January 1, 2025, that added Civil Code 1670.50. It requires a written buyer-broker agreement by the time an offer is signed, caps the term at three months and lists the terms the agreement must contain.
This is general information, not legal advice; talk to a California real estate attorney about your situation.
If you’re about to start touring homes, we’ll walk through the agreement line by line before you sign anything. Start on our buyer services page.
Sources & notes
- California Department of Real Estate: Consumer Alert, changes to real estate representation (amended Dec. 12, 2024)
- California Department of Real Estate: Licensee Advisory, changes to buyer representation
- California Department of Real Estate: Adopted regulation text, 10 CCR 2906.1-2906.3 (AB 2992)
- California Department of Real Estate: Notice of modification to proposed AB 2992 regulations (2025)
- California Public Law: Civil Code section 1670.50
- California Public Law: Civil Code section 2079.13 (definitions)
- National Association of Realtors: Consumer guide to written buyer agreements
- National Association of Realtors: Settlement FAQs
Last reviewed October 2026 by Matthew Martinez.
