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As part of the National Association of REALTORS® Settlement agreement related to broker commissions, as of August 17, buyers nationwide are required to sign a written buyer broker representation agreement after they have selected a real estate professional they want to work with. On Sept. 24, Gov. Gavin Newsom signed AB 2992 (Nguyen), a California Association of REALTORS®-sponsored bill limiting buyer broker representation agreementsto three months. The new law, which takes effect on Jan. 1, 2025, makes California one of 28 states requiring homebuyers to have such an agreement with their agents.

The new law will strengthen protections for California consumers, according to C.A.R. President Melanie Barker. “By mandating buyer broker representation agreements, consumers will have more choice and more clarity about the services they are getting from the REALTOR® they choose to help them through a complex transaction.”

The Silicon Valley Association of REALTORS® shares one of several consumer guides NAR has produced on different topics related to the new rules. Here’s what you need to know about negotiating an agreement with an agent who is a REALTOR® whom you have selected:

When will I be able to negotiate? Written buyer agreements are required for many real estate professionals before you tour a home with them, either in-person or a live virtual tour. These agreements help ensure both you and your agent are clear about roles, responsibilities, and agent compensation. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement. Learn more about written buyer agreements here, and learn more about open houses and tours here.

What can I negotiate? Agreements with your agent are negotiable, including terms about the services your agent will provide, how much your agent will be paid, how long your agreement will last, and more. You and your agent will work together to reach an acceptable agreement that allows you to get the value and services you need in the homebuying process, while also enabling your agent to pursue fair compensation for their work. Remember: compensation is fully negotiable and not set by law. You should consult an attorney if you have any questions or concerns regarding an agreement.

How is my agent compensated? Agent compensation can take many forms, such as a flat fee, a percentage of the purchase price, or an hourly fee. Agents cannot agree to an open-ended amount or range of compensation such as “the agent’s compensation will be whatever amount the seller is offering” or “between X and Y percent.” You can also ask the seller to offer compensation to your agent, which can be sought in the purchase agreement. More info can be found in our offers of compensation guide here.

What types of services can my agent provide? Agents may offer many types of services such as finding and showing you homes that meet your criteria, accompanying you to showings, sharing their analysis of available properties, negotiating on your behalf, and more. For more, read about the179 Ways Agents Who Are REALTORS® Are Worth Every Penny.

How do I start the conversation? You may want to talk to a few agents to find the best match to help you on your homebuying journey. Start by asking questions about the options available to you. If you are working with a REALTORÒ, they are bound by a Code of Ethics to have open and transparent conversations with you about your options. You can read more about REALTORS’® duty to put client interests above their own here.

What if we can’t agree? You don’t have to sign an agreement that you don’t agree with, and you or the agent can walk away from a negotiation at any time. Keep looking for the right fit – another agent may be able to better meet your needs.

Can we change the terms of the agreement after we make it? Yes. You and your agent can mutually agree to change the terms of your agreement. But your agreement and/or state law may govern when it can be changed or terminated. Read your agreement closely and speak with your agent if you would like to change or exit your agreement. Practices may vary based on state and local law. Consult your real estate professional and/or consult an attorney for details about state law where you are purchasing a home.

Please visit facts.realtor for more information and resources.