California's Buyer-Broker Agreement: What It Is and What to Check Before You Sign

A San Francisco homebuyer and real estate professional reviewing an agreement at a table

A buyer-broker agreement is a written contract between a homebuyer and the real estate broker or agent representing them. It sets out the representation, services, compensation, and duration of the working relationship.

Buyers in San Francisco and Daly City may be asked to sign one before touring a home with an agent. The agreement is not a commitment to buy a particular property. It is a contract about the buyer-agent relationship, so its terms deserve a careful review before signing.

Why written agreements became part of the process

Two industry changes contributed to the current practice.

The National Association of REALTORS® settlement led to changes in participating MLSs. Effective August 17, 2024, MLS participants working with a buyer generally must have a written agreement in place before touring a home together. This is an MLS participation requirement, not a nationwide law. The National Association of REALTORS® overview explains the agreement requirements and which terms buyers and agents can negotiate.

California added a separate state requirement through AB 2992, effective January 1, 2025. The law requires a buyer-broker representation agreement as soon as practicable, and no later than when the buyer executes an offer to purchase real property. California regulations also create a rebuttable presumption that it is practicable to obtain the signed agreement before a buyer’s agent shows a property in person or virtually. The precise requirements can depend on the circumstances and the agent’s role. Buyers can review the California Department of Real Estate’s advisory and AB 2992.

These requirements apply in different ways to licensed agents, MLS participants, and specific buyer-agent relationships. Ask the agent to explain which requirements apply to your situation.

A buyer and agent reviewing a blank agreement and taking notes

What the agreement should clarify

Read the complete agreement, including any attached disclosures or addenda. Check the following terms before signing.

1. Scope of representation

Look for a clear description of the properties, locations, and transactions covered. The agreement may apply broadly or be limited to a particular property, area, or period. Confirm that the scope matches what you discussed.

Ask whether the agreement covers only purchase representation or also other services. If you are considering San Francisco and Daly City, confirm whether both locations are included.

2. Compensation and how it is negotiated

The agreement should state the compensation amount or rate, or explain how it will be calculated. It should also say when compensation is due. These terms are negotiable. Commission rates and broker fees are not set by law.

Ask:

  • What is the agreed fee or rate?
  • When would I owe it?
  • Could I owe compensation if the seller does not contribute?
  • Can the amount be paid in part by the seller, if the seller agrees?
  • Does the agreement limit what the agent can receive from all sources?

A seller may or may not agree to pay some or all of the buyer agent’s compensation. Any seller contribution must be negotiated and documented as part of the transaction. Under the applicable MLS rules, offers of buyer-agent compensation can no longer be advertised in the MLS. They may still be discussed or negotiated outside the MLS, subject to the agreement and applicable rules.

Do not rely on an assumed “standard” fee. Confirm the actual terms in writing.

3. Duration and exclusivity

Check the start and end dates. California agreements with an individual buyer generally may not exceed three months, and they cannot renew automatically. Any renewal must be in writing and signed.

Check whether the agreement is exclusive or non-exclusive. An exclusive agreement may limit your ability to work with another buyer’s agent during the term. If you are not ready for a longer commitment, ask whether a shorter or non-exclusive agreement is available. A limited agreement for an initial tour may also be an option, depending on the agent’s policies and the specific terms.

A buyer and agent discussing representation outside a Bay Area home

4. Services included

The agreement should describe what the agent will do. Services may include locating properties, arranging tours, advising on offer terms, preparing or presenting offers, and assisting through the transaction. Confirm what is included and whether any services are excluded or subject to separate terms.

If you expect help reviewing disclosures, coordinating inspections, or managing deadlines, ask how those responsibilities are handled. The agreement should reflect the services you expect.

5. Cancellation and what happens afterward

Review how either party can end the agreement, whether notice must be given in writing, and when cancellation takes effect. Check for any fees or other obligations that could remain after termination.

Look for a “carryover” or protection period. Such a term may address whether compensation could still be owed if you buy a property the agent introduced to you during the agreement, even after the agreement ends. Ask which situations it covers and how long it lasts.

Do not assume that ending the working relationship automatically ends every obligation. The written terms control.

What this means for San Francisco and Daly City buyers

For buyers looking in San Francisco and Daly City, including ZIP codes 94014 and 94015, the agreement is a chance to set expectations before scheduling private tours or preparing an offer.

  • You can negotiate the fee. Compensation is not fixed by law.
  • You can discuss the agreement’s length and scope. Ask whether a short-term, property-specific, or non-exclusive arrangement fits your needs.
  • A seller may or may not contribute to your agent’s compensation. Any contribution must be agreed to; it is not guaranteed.
  • Compensation offers cannot be advertised in the MLS under the relevant MLS rules. That does not prevent separate negotiation outside the MLS.
  • The agreement concerns representation. It does not require you to buy a particular home.

If you are attending an open house without your own agent, the situation may differ from a private tour arranged by an agent representing you. Ask who the agent represents and what any document would require before signing.

A clear agreement supports informed decisions

A written agreement makes the representation and costs clear up front. That is its practical value. Review the terms, ask questions, and request changes if the agreement does not reflect what you discussed.

Bill Wagner is happy to walk buyers through an agreement before they sign anything. Learn more about Bill’s approach to real estate or contact Bill with questions about buying in San Francisco or Daly City.

This article is general information, not legal advice. Rules may apply differently based on the agent’s role, MLS participation, and the buyer’s circumstances. Consult your agent or an attorney about questions concerning a specific agreement.