Buyer-Broker Agreement California: 7 Details Real Estate Agents Should Review Before Getting Started
If you work with buyers in California, a buyer-broker agreement is no longer just a best practice, since January 1, 2025, it’s been state law. California Assembly Bill 2992 (AB 2992) requires every buyer’s agent in California to have a written representation agreement with their client, and the California Department of Real Estate (DRE) has said it will enforce it. For a broader look at the NAR settlement, nationwide buyer representation changes, and what buyers and agents need to know, explore our general guide to buyer-broker agreements.
But even a signed agreement can create problems if important details are missing or incorrect. It could lead to disputes over the compensation you negotiated, damage the client relationship, or expose you to disciplinary action for violating California’s real estate licensing law.
This guide walks through the 7 details to review before you get started with any California buyer, what each term means under California law, and the question to ask before you sign.
1. The Two Deadlines: When the Agreement Must Be Signed
California has two deadlines, and you should treat both as real.
- California law (AB 2992): You must sign a written buyer-broker representation agreement as soon as practicable, but no later than the execution of the buyer’s offer to purchase real property. This applies to sales of all property types, single-family, multifamily, office, retail, industrial, though not to leases, rentals, or loan brokerage. California DRE advisory
- NAR settlement / MLS practice: If you’re a REALTOR working with an MLS-listed property, you need a signed agreement before touring the home, including virtual showings. NAR Consumer Guide to Written Buyer Agreements
In practice, that means you should aim for before the first showing, never “we’ll paper it when the offer gets written.” An agreement that exists only in your head, or only in a text thread, does not meet either standard.
Review question
Does my working practice always get the agreement signed before the first showing? If you’ve been relying on “before we write the offer,” that no longer works for MLS showings, and an agreement dated after the showing doesn’t cure the miss.
2. The Three-Month Expiration Cap
This is the detail that surprises the most California agents. Under AB 2992, the agreement must state its expiration date, and that expiration date may not exceed three months from the date the agreement was executed for an individual buyer.
Three months is shorter than many typical search timelines. In practice, this means:
- Long searches will outlive the agreement. Build renewal into your workflow: California form publishers offer written renewal/extension agreements that reset the period (again, up to three months from the renewal date).
- Entity buyers (LLCs, corporations, trusts acquiring property) are treated differently, a retainer period can be negotiated beyond three months, and extended by written modification.
- An agreement with no expiration date at all puts your license at risk: under California Business & Professions Code §10176(f), an exclusive employment agreement without a specified period is grounds for DRE discipline.
Review question
What calendar reminder exists for this agreement’s expiration date? If the answer lives in your inbox or memory, it doesn’t exist.
3. The Required Content Must Be in the Agreement
Review the agreement to confirm it includes all four elements AB 2992 requires:
- The buyer’s agent’s compensation: stated as a specific amount or rate.
- The services the agent will render: search, showings, offer preparation, negotiation, transaction management.
- When the compensation is due: at close of escrow, upon a protected transaction, etc.
- The expiration date: subject to the three-month cap above.
Most current forms, like the C.A.R. Form BRBC (Buyer Representation and Broker Compensation Agreement, non-exclusive unless “exclusive” is checked and initiated), cover these. But older buyer agreements and out-of-state forms may not, and a form missing a required element doesn’t magically become compliant because you already used it.
Review question
Can I point to each of the four required elements in the form I’m using?
4. Compensation Is a Ceiling, Not a Floor
Your agreement must state exactly how you’ll be compensated: a percentage, flat fee, or hourly rate. “Whatever the seller offers” fails the requirement because the amount must be definite.
Two details agents miss:
- The amount you agree to is the maximum you can receive from any source. If you sign for 2.5%, you cannot collect more than that for those brokerage services even if a seller volunteers more.
- Commissions are fully negotiable under California law. The DRE specifically warns against telling buyers there’s a “standard rate.” If you misrepresent commission terms, you’ve created a compliance problem, not just a sales problem.
The buyer doesn’t have to pay you out of pocket; they can request a seller concession in the offer, but the amount still has to live in the written agreement.
Review question
Is the amount specific, understood by the buyer, and dated correctly, and has every later change been papered?
5. When Compensation Is Due and the Exit Clause
DRE’s advisory highlights a trap many agents miss: once signed, the buyer remains financially responsible for compensating their agent unless the agreement contains an “exit” clause or you relieve them of the obligation.
Walk your buyer through the payment reality in plain language:
- The buyer can pay the fee out of pocket at closing.
- The buyer can ask the seller for a concession covering some or all of it — the seller may accept or reject.
- If the seller rejects and the buyer can’t absorb the cost, the buyer can walk away and buy elsewhere, but only if the agreement permits it without financial obligation.
Also note DRE’s advance-fee rule: you can’t charge piecemeal fees (per showing, per offer) before the service is rendered unless your broker has a DRE-reviewed advance fee agreement with a “no objection” letter.
Review question
Does my offer or buyer agreement contain a cancellation/contingency clause if seller concessions are rejected?
6. Exclusivity, Protection Periods, and Termination
Exclusive agreements commit the buyer to work only with your brokerage for the term; Non-exclusive agreements generally allow buyers to work with multiple brokerages. However, agents should review the compensation and protection-period provisions carefully to understand when they may be entitled to payment. Many California agents open new relationships with short-term non-exclusive or single-property agreements, then convert to exclusive once the relationship proves out.
Before signing an exclusive agreement, review:
- The protection period. After termination, does the agreement still entitle you to compensation on homes you already showed? Know the look-back window and keep a dated list of the properties you’ve shown.
- Termination mechanics. Notice required, and whether either party can exit for cause.
- The buyer’s understanding. DRE warns licensees against pressuring buyers into signing without time to review, an exclusive term explained and accepted is durable; one sprung at the front door is a dispute waiting to happen.
Review question
Have I properly documented and delivered the list of shown properties to protect my commission if representation ends?
7. Dual Agency and the Agency Law Disclosure
If you or your brokerage ends up representing both the seller and the buyer on the same property, California requires written disclosure of the dual agency to both parties, and you retain fiduciary duties to both. Your buyer-broker agreement should also permit the buyer to approach the listing agent about dual agency representation without becoming financially obligated to you, DRE explicitly describes this as an option the agreement should preserve.
Separately, make sure the statutory Agency Law Disclosure, the form describing the duties and activities of each agent’s representation, accompanies the relationship and reflects the updated language for the new rules.
Review question
Are the agency relationship disclosures completed in writing for every representation, not just dual agency situations?
A 60-Second California Review Checklist
Before you get started with any new buyer:
- Agreement signed before the first showing (and always before the offer is written)
- All co-buyers named and signed
- All four AB 2992 required elements present (compensation, services, when due, expiration)
- Expiration date present and within three months (or entity-client exception applies)
- Compensation is a specific amount/rate, and treated as the ceiling
- Exit clause and termination terms understood by both sides
- Expiration date loaded into your transaction-tracking calendar for renewal
What Happens If Your Agreement Expires Mid-Transaction?
The most common real-world failure we see: the agreement was fine on day one, the search stretched on, and the three-month window closed while everyone was focused on contingencies. If escrow is still open and the agreement expires, the brokerage’s right to compensation can be challenged. Renew before it lapses, and track the expiration date alongside your contingency and closing deadlines.
That’s exactly why Trackxi gives agents and transaction coordinators visibility into missing, expiring, and expired buyer agreements, alongside signed documents, contingency dates, and closing tasks in one timeline.
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Spend less time chasing paperwork and deadlines. Let Trackxi help you keep transactions organized.
Frequently Asked Questions About Buyer-Broker Agreement California
Since January 1, 2025, California law (AB 2992) requires buyer's agents to have a signed written representation agreement no later than the execution of the buyer's offer, and as soon as practicable before that. Realtors must also have it signed before touring any MLS-listed property, per the NAR settlement practice changes.
For individual buyers, the expiration date cannot exceed three months from execution. Entity buyers can negotiate longer retainer periods. Individual agreements can be renewed in writing for additional three-month periods.
No. Any modification to the compensation agreement must be in writing and agreed to by both parties. Informal changes through email or text do not satisfy the requirement.
It's negotiated in the agreement and the offer: the buyer can pay directly, request a seller concession, or a combination. The amount agreed in the buyer-broker agreement is the maximum the agent may receive from any source for that representation.
Not under an exclusive agreement without consequence, check the termination and protection-period terms. Non-exclusive agreements allow it, with compensation owed only to the agent who procures the purchase.
If the agreement lapses mid-search or mid-transaction, your right to compensation can be challenged. Renew in writing before the expiration date and keep executed agreements in the transaction file where your TC and broker can see them.
