Buyer Agreements in California: What to Expect Before Your First Showing

If you're starting a home search, one of the first things your agent will ask you to sign is a buyer agreement. Here's why, and how to make sure it works for you.

What changed

Since August 17, 2024, buyers working with an agent who belongs to an MLS sign a written agreement before touring a home together. In California, this is usually the C.A.R. Buyer Representation and Broker Compensation Agreement. The change came from the national settlement involving the National Association of REALTORS®.

At the same time, sellers can no longer advertise offers of buyer-agent compensation on the MLS. Compensation is now worked out directly and in writing.

What the agreement covers

• What your agent will do for you during the search, offer and escrow
• How your agent is paid, stated as a clear amount or percentage, never open-ended
• How long it lasts and how it can be ended
• Where it applies, such as a specific area, property type or even a single home

What's negotiable

Almost all of it. Compensation is always negotiable, and so is the length of the agreement. Many buyers start with a short term or a limited scope while they get to know an agent. Your agent also can't be paid more than the amount in your agreement, even if a seller offers more.

When you make an offer, you can ask the seller to cover your agent's compensation, in full or in part. Many sellers agree, especially when it helps their home sell. Whether they do becomes part of the negotiation.

Questions to ask before you sign

1. How long does the agreement last, and can I cancel early?
2. What happens if the seller agrees to pay your compensation?
3. Does it cover all homes, or only certain areas or properties?
4. What services are included from search to closing?

The bottom line

A good buyer agreement simply puts in writing what you and your agent already expect of each other. I go through every line with my clients before anyone signs, and I'm glad to do the same with you.