The Buyer-Representation Agreement After the NAR Settlement

What changed with the 2024 NAR settlement, in plain terms

The 2024 NAR settlement (NAR is the National Association of Realtors, the largest trade group for real-estate agents in the country) changed two everyday practices for buyers. First, a buyer now typically signs a written agreement with an agent before that agent shows them homes listed on the MLS: that agreement is the buyer-representation agreement. Second, the way a buyer's agent gets paid is 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, while after the settlement it is treated as a separately negotiated term, decided per transaction rather than assumed.

A note on timing: the NAR settlement practice changes took effect in August 2024, and California added its own statutory rules with AB 2992 (Civil Code §1670.50), effective January 1, 2025. Details can still differ by brokerage, so 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?

Buyer-agent compensation is now negotiated per transaction: you and your agent agree on it in the buyer-representation agreement. A seller may still offer to cover some, all, or none of that amount (that option did not disappear), but it is no longer 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 setting out how the agent represents you and how they are paid. In California, the standard form is the C.A.R. (California Association of Realtors) Buyer Representation and Broker Compensation Agreement (BRBC), which brokers have required since August 17, 2024. Most agreements cover the same handful of points: scope, duration, compensation, exclusivity, and termination provisions.

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. In California, AB 2992 (Civil Code §1670.50, effective January 1, 2025) caps a buyer-representation agreement at three months from the date it is signed. It can be renewed, but only in writing, and each renewal is capped at three months as well. The law also requires the agreement to be signed no later than when you sign an offer. That cap works in your favor: you are never locked in for the six- or twelve-month terms older agreements sometimes carried.

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 in your purchase contract. Read the scope, duration, compensation, and exclusivity sections together, because they affect one another.

Clauses worth reading carefully

None of this is an accusation about agents; these are simply the clauses where details matter most and where it is reasonable to ask questions before signing: how compensation is defined, the duration and renewal terms, the reach of exclusivity, the gap scenario, and how termination and exit work.

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; in California that can be no more than three months under AB 2992. Automatic renewals are void under California law: a renewal has to be a new written agreement, and each renewal is capped at three months too.

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, with the option to extend later. 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. If you are still deciding which agent to sign with in the first place, my guide to choosing a Russian-speaking Bay Area agent covers the verification checklist I recommend before you commit.

Why representation still has value

A dedicated buyer's agent does real work that is easy to underestimate. 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.

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