What’s a Buyer Broker Agreement in California?

What is a buyer-broker agreement?

A buyer-broker agreement is a formal contract between a homebuyer and their real estate agent. The document clearly outlines the responsibilities of both parties, including:

• The agent’s specific duties, such as finding homes that meet your needs, scheduling property tours, and negotiating with sellers on your behalf.
• The buyer’s obligation to work exclusively with the Realtor and compensate them for their professional services, typically through a commission.

This signed and legally binding agreement ensures that both the agent and the buyer clearly understand their roles and expectations throughout the process of finding and buying a home.

What is in the new buyer-broker agreements?

The new buyer-broker agreements clarify the working relationship between homebuyers and their real estate agents. Some key elements of the home-shopping contracts are:

• Exclusive agent representation: Your buyer-broker agreement may contain a clause stating that you, as the buyer, agree to work only with the signing agent during a specified time period. You can negotiate the timeframe and terms. In some cases, an agent might offer you a preliminary, nonexclusive home-touring agreement followed by a more traditional buyer-agent contract.
• What the agent will do for you: The buyer-broker agreement outlines your real estate agent’s duties and responsibilities. These will be spelled out, from touring properties and submitting purchase offers to negotiating with sellers and, hopefully, closing the deal for you.
• Commission terms: You will also be informed of how and when your agent will be compensated, including whether the Realtor fees are negotiable.
• Duration of the agreement: The start and end dates of the buyer-broker agreement.
• Required cancellation process: The contract terms will also include the process for terminating the agreement. This may include a specified dollar amount the homebuyer must pay if the cancellation terms are not properly followed.

Other buyer-broker agreement considerations

Dual agency: If you agree to allow representation on both sides of the transaction, your buyer’s agent becomes a dual agent. With dual agency, you agree to view properties that your Realtor has listed with their seller clients. In short, your agent will represent both you and the seller. Due to the potential for conflict of interest, dual agency is not legal in eight states.

Nonexclusive: If you find an agent willing to offer a nonexclusive agreement, this means you can work with other Realtors to purchase a home. A nonexclusive buyer-broker agreement doesn’t lock you into a long-term commitment. You may find this option in preliminary property touring agreements as agents strive to provide peace of mind to hesitant buyers navigating the new NAR rules.

How does this impact California homebuyers?

California has some of the country’s most overvalued housing markets, including Los Angeles, San Diego, San Francisco, and San Jose. In addition, the California Association of Realtors (CAR) predicts that the state’s median home price will increase by 4.6% to $909,400 in 2025. Since the new NAR rules shift commission responsibilities to buyers, this adds an additional cash-up-front burden for California home shoppers.

• Written agreements are mandatory before property tours: You must sign a buyer-broker agreement before touring homes with an agent.
• Commission payments are your responsibility: As the buyer in a post-NAR settlement era, it’s now your responsibility to pay your own agent fees.

One possible solution to relieve the added financial burden is to ask your agent to negotiate with sellers and request they pay your buyer agent commission. Historically, sellers almost always paid for both the buyer and seller Realtor fees, so this seller concession is not unheard of, nor is it restricted by the NAR settlement.

Can you sign a 1-day buyer-broker agreement?

Because the new NAR settlement rules require homebuyers to sign an agreement upfront — before touring homes — most agents are offering flexible contract terms. Reputable agents strive to put their clients at ease rather than pressure them to lock into a long-term contract. To avoid the risk of having a buyer go to a competing Realtor, many agents will accommodate a one-property or one-day touring agreement.

How long are buyers willing to commit to a broker agreement?

In a survey of more than 750 top-rated agents throughout the country, HomeLight found that Realtors are adjusting their buyer-broker agreements (or preliminary property touring agreements) to fit whatever timeframe their clients want. According to the survey, here is what homebuyers are asking for:

• Multi-month agreement: 42%
• Per-property, one-showing agreement: 21%
• Month-long agreement: 11%
• Week-long agreement: 7%
• One-day (24-hour) agreement: 5%
• Weekend (2- or 3-day) agreement: 4%
• Other lengths of time: 10%

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Key benefits of a buyer-broker agreement

While the upfront buyer-broker agreement requirement may feel like an extra step, the written contracts offer several advantages:

• Improved transparency: From day one, you and your real estate agent will have a clearer understanding of your respective responsibilities.
• Commitment: The agreement can create a sense of mutual dedication to the home-buying process, which can improve trust and communication.
• More negotiation control: You can have more influence over how your agent’s fees are handled, creating room for financial creativity and flexibility.

FAQ about buyer broker agreements in California

Do I need to sign an agreement just to attend an open house?
No, most buyer-broker agreements only apply to private home showings with your agent. Open house events are typically open to the public. Unless this is specifically addressed in your contract, you should be able to attend without signing a broker agreement. However, open house guidelines from local Realtor associations are evolving and can vary by region or brokerage. Proceed with informed caution. If you already signed an exclusive contract with a buyer’s agent, and you attend an open house and ultimately decide to buy the home, you may be required to pay your agent, even if they did not find the open house property.

Are all buyer-broker agreements the same?
No, these agreements can vary between agents and brokerages. Also, depending on what you negotiate with your agent, your agreement may have unique terms. For example, one agreement might be for a single day or weekend of touring properties, while another might be written as a multi-month contract. Review the terms of your buyer-broker agreement carefully and ask questions before making a commitment.

What red flags might I look for in a buyer-broker agreement?
When considering a buyer-broker agreement, watch out for:

• Long durations that lock you in for an extended period
• Non-negotiable commission rates
• Vague or obscure cancellation terms
• Excessive or unrealistic penalties for terminating the agreement

Why have real estate buyer-broker agreements changed?
The NAR rule changes were implemented to promote more transparency and make certain homebuyers understand their new responsibility for negotiating and paying their own Realtor fees. The goal is to reduce confusion during home sale transactions.

Do the new rules control how much commission I have to pay?
No, the new NAR rules do not dictate commission amounts. This was true with buyer-broker agreements even before the NAR settlement agreement. Realtor fees have always been negotiable.

What amount of Realtor fees can I expect to pay as a homebuyer?
As noted above, you can negotiate with your agent to determine how much you pay in commissions. A recent HomeLight survey found that a typical buyer commission cost range falls between 2.5% and 3%. However, you can also seek out discount commission agents or brokerages. You may also be able to negotiate a lower rate for a less complicated transaction, such as a property sale between two family members. Below is a table showing examples of various commission percentages on a typical $800,000 California home purchase.

Commission examples on $800,000 California home

Bottom line: Buyer-broker agreements in California

The new buyer-broker agreement requirement in California is part of a nationwide effort to increase transparency in real estate transactions. While it may feel like an added burden in the home-shopping process, the agreement can empower buyers by clarifying responsibilities. The contract also helps buyers know what to expect and provides more control over financial arrangements.

As you look for an agent, remember that reputable Realtors dedicate significant time and effort to helping their clients, especially in competitive California markets. A skilled agent will be well worth their compensation. At the same time, agents also recognize that they need to earn your trust and your business. With this in mind, most seasoned California agents are offering flexible ways to comply with the new NAR settlement rules.

If you’re buying a home in California, take the time to understand the agreement and discuss it with your agent. If you’re concerned about the additional expense of paying your buyer agent’s commission, ask your agent if they can negotiate this expense with the home seller. But keep in mind that this may put your offer at a disadvantage in a competitive market.

Looking for an expert agent you can trust? HomeLight can connect you with performance-proven buyer’s agents in your California market. We analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. If your goal is to buy before you sell in California, visit this link for HomeLight’s modern solution. Watch this short video to learn more.

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