If you have started shopping for a home in the Bay Area, you have probably run into two phrases that did not come up a few years ago: "the NAR settlement" and "do I have to sign something before I can tour a house?" The short answer is that the way buyers and their agents work together changed in 2024, and a written agreement now usually comes earlier in the process than it used to. This page explains, in plain terms, what that agreement is, what is inside it, and what is worth reading closely before you sign. It is general education, not legal advice, and it defers every question about specific contract language to a real-estate attorney.
What changed with the 2024 NAR settlement, in plain terms
NAR is the National Association of Realtors, the largest trade group for real-estate agents in the country. A legal settlement involving NAR, which took effect in 2024, changed two everyday practices for home buyers.
First, a buyer now typically signs a written agreement with an agent before that agent shows them homes listed on the MLS (the Multiple Listing Service, the shared database agents use to list and find properties for sale). That agreement is the buyer-representation agreement.
Second, the way a buyer's agent gets paid is now handled differently. Under the older pattern, buyer-agent compensation was generally presumed to come from the listing side and was not something most buyers thought about or negotiated. After the settlement, that compensation is treated as a separately negotiated term, decided per transaction rather than assumed.
One important caveat: the exact terms and effective dates tied to the settlement are still evolving, and details can differ by brokerage and by region. Treat anything you read online, including this page, as a starting point, and confirm the current rules with your own agent or a real-estate attorney before you rely on them.
Who pays the buyer's agent now
This is the part that causes the most confusion, so here is the careful version.
A seller may still offer to cover some or all of the buyer agent's compensation. That option did not disappear. What changed is that it is now a negotiable term rather than a given. Whether a seller offers anything toward your agent's pay, and how much, is decided deal by deal.
Because of that, there can be a gap. You and your agent agree, in your buyer-representation agreement, on what your agent will be paid. Separately, the seller in a given transaction may offer some amount, all of it, or none of it toward that figure. If the seller's offer does not cover the full amount you agreed to, you may be responsible for the difference. How that is handled depends entirely on what your agreement says and on the terms of the specific purchase.
There is no single rate or customary figure to quote here, and you should be cautious of anyone who tells you there is. Compensation is individually negotiated in every transaction. The right number for your situation is the one you and your agent agree to in writing, with a clear understanding of what happens if the seller covers less than that.
What is inside a buyer-representation agreement
A buyer-representation agreement (also called a buyer-broker agreement) is a written contract between you and a brokerage that sets out how the agent will represent you and how they will be paid. Most versions cover the same handful of points.
Scope. This defines what the agreement applies to. The scope can be narrow, such as a single named property or a short tour, or broad, covering your full home search across the area. A narrow scope commits you to less.
Duration. This is how long the agreement lasts. Terms vary widely, from a short single-property or two-week window up to six or twelve months. A longer term is a longer commitment.
Compensation. This is the amount your agent will be paid and how it is calculated, along with how any seller contribution is applied against it.
Exclusivity. Exclusivity means you commit to working with that one agent for the homes the agreement covers. Under an exclusive agreement, the agent may be owed their compensation even if you buy through a different channel within the term. A non-exclusive agreement leaves you free to work with more than one agent. Whether an agreement is exclusive is something to confirm before signing, not after.
You will also see termination provisions, which describe how either side can end the agreement. These often interact with a contingency, a condition that has to be met before something happens. Read the scope, duration, compensation, and exclusivity sections together, because they affect one another.
Clauses worth reading carefully
None of what follows is an accusation about agents. These are simply the parts of the document where the details matter most, and where it is reasonable to ask questions before you sign.
How compensation is defined. Look at the exact amount or formula, and at how a seller's contribution is credited against it. The goal is to understand, before you tour homes, what you might owe in a transaction where the seller covers less than the agreed figure.
The duration and term. Confirm how long you are committing to and whether the term renews automatically.
Exclusivity and its reach. Check which homes and which channels the exclusivity covers, and for how long after the agreement ends.
The gap scenario. Find the language that says what happens if the seller's offered compensation does not cover the amount you agreed to pay your agent. This is the clause most buyers overlook, and it is the one most likely to surprise you later.
Termination and exit. Understand how you can end the agreement if the relationship is not working, and what, if anything, you owe on the way out.
If a compensation structure looks unusual to you, or if any clause is hard to follow, that is a good reason to slow down and have a real-estate attorney explain it. You are allowed to ask for time to read.
How to negotiate scope and duration
You have more room to shape this agreement than many buyers assume, and the two easiest levers are scope and duration.
Starting with a shorter term, or with a single-property scope, is a lower-commitment way to begin. It lets you see how an agent works before you sign on for a longer search. You can also ask directly about the termination terms: how you would exit, on what notice, and with what obligations. These are normal questions, and a good agent will walk through them with you rather than rush you past them.
Why representation still has value
It would be a mistake to read all of this as a reason to go it alone. A dedicated buyer's agent does real work that is easy to underestimate until you are in the middle of a transaction.
They run comparables, or "comps," the recent sale prices of similar nearby homes, so your offer is grounded in what the market actually supports. They coordinate inspections and help you make sense of the seller's disclosures, the documents that spell out what is known about a property's condition and history. Our companion explainer on reading disclosures in the Bay Area goes deeper on that step. A good agent also manages your contingencies and deadlines so a condition does not lapse by accident, and advocates for you in negotiation, where experience and a steady read on the local market are worth a great deal. The broader picture lives in our buyer-guide hub.
A note from me
If you want me to walk you through an agreement clause by clause before you sign, send me a message. Having guided many Bay Area buyers, I tend to favor a shorter initial term with the option to extend, and flexible scope, so you are never locked into more than you are ready for. I will explain every line, including the compensation and exit terms, and I will tell you plainly when a question belongs with an attorney rather than with me. There is no pressure and no rush. You can reach me at lilyagaripova@gmail.com or (415) 910-3958.
FAQ
Do I really have to sign something before touring a home?
In most cases now, yes: a written buyer-representation agreement is typically signed before an agent shows you homes listed on the MLS. The exact requirements can differ by brokerage and are still evolving, so confirm what applies in your situation. You can ask to start with a short-term or single-property agreement rather than a long, broad one.
Who pays my agent now?
It is negotiated per transaction. A seller may still offer to cover some or all of your agent's compensation, but that is no longer a given, and if the seller offers less than the amount you agreed to, you may be responsible for the difference. The exact arrangement depends on your agreement and on the specific deal.
Can I negotiate the length of the agreement?
Often, yes. Many buyers ask for a shorter term, or a single-property scope, as a lower-commitment way to start, with the option to extend later. The terms are set between you and the brokerage, so it is reasonable to discuss duration before you sign.
What if the seller will not cover my agent's compensation?
Then the gap between what the seller offers and what you agreed to pay your agent may fall to you, depending on what your agreement says. This is exactly the clause to read closely and ask about before signing. A real-estate attorney can explain how the specific language would apply to you.
Can I still buy a for-sale-by-owner (FSBO) home if I have signed an agreement?
It depends on the agreement's scope and exit terms. A for-sale-by-owner home (one the owner is selling without a listing agent) may or may not fall within what your agreement covers, and the compensation terms can differ. Ask your agent and, if needed, an attorney how your particular agreement treats FSBO properties before you tour one.
Is this article legal advice?
No. It is general educational information and does not interpret any specific contract. Buyer-representation agreements are binding contracts whose terms vary, so have a California real-estate attorney review any agreement before you sign.
