A buyer broker agreement in California is a written contract between you and a real estate agent that must be signed before the agent can show you properties or collect a commission on your purchase. Assembly Bill 2992, effective January 1, 2025, made these agreements mandatory statewide, capped their length at three months for individual buyers, required specific terms about pay and services, and voided any agreement that breaks those rules.1Department of Real Estate. What Licensees Need to Know – Changes to Buyer Representation and Compensation Compensation is fully negotiable, and the days of assuming the seller will automatically cover your agent’s fee are over.
When You Have to Sign
The statute requires the agreement to be signed “as soon as practicable, but no later than the execution of the buyer’s offer to purchase real property.” The California Department of Real Estate has interpreted “as soon as practicable” to mean before an agent shows you any property, in person or virtually.1Department of Real Estate. What Licensees Need to Know – Changes to Buyer Representation and Compensation
Walking into an open house on your own does not trigger the requirement. The moment an agent accompanies you on a tour, the signed agreement must already be in place.
Exclusive vs. Non-Exclusive Representation
California recognizes two main structures, and the difference decides who owes a commission at closing.
An exclusive right to represent agreement gives one broker the right to represent you for a set period and geographic area. If you buy any property during that period, that broker is owed the fee, even if you found the home at an open house, through a friend, or on your own. The upside is that the broker has every reason to invest serious time in your search.
A non-exclusive agreement lets you work with multiple agents simultaneously. Only the broker who was the “procuring cause” of your purchase, meaning the one whose efforts directly led to the deal, earns the commission. The flexibility is real, but agents working under non-exclusive contracts typically prioritize buyers who have signed exclusive ones.
What the Agreement Must Include
AB 2992 requires every buyer broker agreement to spell out the compensation the agent will receive, the services the agent will provide, when the compensation becomes due, and the date the agreement expires.1Department of Real Estate. What Licensees Need to Know – Changes to Buyer Representation and Compensation The agreement must also carry a disclosure stating that real estate commissions are not fixed by law and are set individually by each broker.2Digital Democracy. AB 2992 – Real Estate Law: Buyer-Broker Representation Agreements
The compensation figure is a ceiling, not a baseline. It represents the maximum your agent can collect from any source for the transaction. If the seller contributes less than that number, you cover the shortfall. If the seller covers the full amount, the agent cannot collect more than the agreement specifies.
Three-Month Cap and No Automatic Renewals
For individual buyers, the initial term cannot exceed three months from the date of signing. The cap does not apply when the buyer is a corporation, limited liability company, or partnership.2Digital Democracy. AB 2992 – Real Estate Law: Buyer-Broker Representation Agreements
The agreement cannot renew automatically. Continuing with the same agent requires a new written renewal, dated and signed by both of you. Any agreement that violates the duration or renewal rules is void and unenforceable, meaning the broker has no right to collect under it.2Digital Democracy. AB 2992 – Real Estate Law: Buyer-Broker Representation Agreements
Most agreements also include a protected period, sometimes called a safety clause, that extends the broker’s right to a commission for a window after the contract expires. It covers only properties the broker introduced to you during the original term. If you buy one of those specific homes during the protected period, the broker is still owed the fee. These windows typically run 30 to 90 days and are negotiable.
How You Pay the Commission
Compensation is always negotiable. The agreement can state it as a percentage of the purchase price, a flat dollar amount, or an hourly rate, but it must be a specific figure or formula rather than an open-ended range.
Sellers used to cover the buyer’s agent commission by default, routed through the listing broker. That arrangement is still possible, but it is no longer automatic. Sellers can offer buyer-agent compensation, decline to offer any, or negotiate it inside the purchase contract. Whatever the seller does not pay, you do. On a $900,000 home, a 2.5% fee comes to $22,500, and you should weigh the proposed number against the services the agent is actually providing. You can counter.
What Your Broker Owes You
Signing creates an agency relationship that puts fiduciary obligations on your broker. Under California Civil Code Section 2079.16, an agent acting exclusively for a buyer owes a fiduciary duty of utmost care, integrity, honesty, and loyalty in all dealings with the buyer.3California Legislative Information. California Civil Code CIV 2079.16
Beyond that core duty, your agent owes you:
- Reasonable skill and care in researching properties, preparing paperwork, and meeting deadlines.
- Honest and fair dealing with everyone involved in the transaction.
- Disclosure of all material facts the agent knows that could affect a property’s value or desirability, as long as those facts aren’t already known to you or easily observable.3California Legislative Information. California Civil Code CIV 2079.16
- Confidentiality about information you share, such as the top price you’d pay or your financial situation.
These duties are not reduced by other provisions in the agency disclosure statutes. A broker who fails to meet them may be in breach of the agreement and in violation of state law.4California Legislative Information. California Civil Code 2079.24
What You Owe the Broker
Under an exclusive agreement, you must work solely with your contracted broker for property purchases within the terms specified. Going around your agent to buy through another broker, or directly from a seller, does not erase the first agent’s claim to compensation.
You are also expected to act in good faith: cooperate with the search, give honest financial and personal information, and tell your agent about properties you come across on your own. Finding a home independently, keeping quiet about it, and buying it is the exact fact pattern that produces disputes.
Dual Agency
Dual agency is when the same agent or brokerage represents both the buyer and the seller in a transaction. California allows it, but only with written disclosure and consent from both parties before the dual representation begins. The agent must explain that their ability to advocate for either side is limited and that confidential information from one party cannot be shared with the other.
In practice, a dual agent cannot tell the seller you’d pay more than your offer or tell you the seller would take less. The loyalty duty you’d normally have exclusively is now split. If your agent discloses a potential dual agency situation, you can decline and seek separate representation, though that may mean walking away from the particular property.
Changing or Ending the Agreement Early
Any change to the commission rate, services, geographic scope, or term has to be in writing and signed by both parties. Verbal modifications don’t hold up.
Ending the contract early depends on the circumstances:
- A mutual written release signed by both of you is the cleanest exit and dissolves all obligations.
- If your broker fails to perform the fiduciary duties, misrepresents material facts, or neglects the services the agreement promised, you may have grounds to terminate for cause. Document missed appointments, failures to present offers, and undisclosed conflicts.
- Walking away without cause does not void the contract. Depending on its terms, you could still owe compensation or a cancellation fee. The fee amount is negotiated, not set by statute.
The protected period survives termination. If you buy a property your broker introduced during the term, their claim stands until the protected window closes.
If You’re Buying with a VA Loan
Veterans using VA home loans face a specific rule. Under VA Circular 26-24-14, the VA authorized a temporary variance letting veterans pay reasonable and customary buyer-broker charges, but only in areas where listing brokers are prohibited from setting buyer-broker compensation through MLS postings or where buyer-broker compensation cannot be established by or flow through the listing broker.5U.S. Department of Veterans Affairs. VA Circular 26-24-14
Several conditions apply. Buyer-broker fees cannot be rolled into the loan and must be paid at closing from the veteran’s own funds. The lender has to confirm the veteran has enough liquid assets to cover these charges along with other closing costs. The signed buyer broker agreement must be in the loan file and uploaded with the appraisal request.5U.S. Department of Veterans Affairs. VA Circular 26-24-14 Veterans can still negotiate for the seller to cover the fee as a concession, and if the seller agrees, that payment does not count toward the VA’s seller concession cap.