The Buyer Representation Agreement, Explained
If you are buying a home in California, an agent will ask you to sign a buyer representation agreement before doing substantive work on your behalf. Since January 1, 2025, that is not a formality — it is a legal requirement under AB 2992.
Most buyers sign it quickly. It is worth slowing down, because this is the document that fixes what you pay.
What the agreement is for
It is a contract between you and a brokerage. It establishes that the agent represents you, describes the services they will provide, states how and when they are compensated, and sets how long the arrangement lasts.
Before the written requirement, buyers routinely worked with agents on a handshake while the compensation was arranged between brokerages in the listing agreement — a document the buyer never saw. The written agreement moves that conversation to the front, where you can negotiate it.
The compensation clause
This is the clause to read twice. It states the amount your broker is entitled to, usually as a percentage of the purchase price.
It typically works alongside a second provision saying that anything the seller pays toward your agent's compensation is credited against what you owe. The interaction matters: the figure in the compensation clause is effectively a ceiling on what your broker receives. If a seller offers more than that ceiling, the excess does not simply vanish — but where it goes depends on how the rest of your paperwork is written, so ask directly.
Term and cancellation
Check how long the agreement runs and how you get out of it. A representation period measured in months commits you far more than one measured in weeks.
Look for the cancellation terms and whether notice is required. A brokerage confident in its service does not need to trap clients into a long term.
Exclusive versus non-exclusive
An exclusive agreement means that for its duration, this brokerage represents you for qualifying purchases — even on a property you find entirely on your own.
A non-exclusive agreement leaves you free to work with more than one agent. It asks the brokerage to earn the business on each transaction rather than lock it in up front.
What to check before signing
Four questions cover most of the risk:
- What exact percentage or amount am I agreeing to pay?
- If the seller pays more than that, what happens to the difference?
- How long does this run, and how do I cancel?
- Is it exclusive, and does it cover properties I find myself?
The bottom line
A representation agreement is not something to be nervous about — putting terms in writing protects you more than it protects the agent. But it is the moment your commission is decided, so read the compensation clause carefully and ask what happens to any excess.
General information for California home buyers, not legal or tax advice. Every transaction is different — consult an appropriate professional about your own situation.