Starting January 1, 2025, California has updated the rules around how buyers and their agents work together. You should always be in a written agreement with your Real Estate Agent. If you’re thinking about buying real estate, here’s what you need to know about the new requirements.
What You Need to Know About California’s New Buyer Representation Agreement Law (Effective January 1, 2025)
What’s Changing?
The new law requires that a buyer representation agreement be signed between a buyer and their real estate agent:
As soon as practicable, but
No later than when the buyer submits an offer to purchase a property.
This means buyers can no longer make an offer without first having a signed agreement with their agent.
What Types of Properties Are Covered?
This law applies broadly to most types of real estate in California, including:
Homes with 1–4 units (including condos, townhomes, and co-ops)
Larger residential buildings (5+ units)
Commercial property
Vacant land
Manufactured or mobile homes (when sold through a licensed real estate agent)
Not covered:
Leases and rental agreements
Sales of state or federal land
Loan brokering services
What Must the Agreement Include?
Every buyer representation agreement must clearly spell out:
Broker’s compensation (how and when the agent is paid)
Services provided to the buyer
When compensation is due
How the contract ends
Time Limits and Renewals
Agreements with individual buyers can last no more than 3 months at a time.
Agreements with corporations, LLCs, or partnerships may have different terms.
Renewals must be in writing, signed, and dated — and cannot exceed 3 months.
Agreements cannot auto-renew.
Other Key Requirements
Agency Disclosure: Buyers must receive the standard agency disclosure form before signing (C.A.R. Form AD).
Negotiability Notice: All agreements must state that commission rates are not fixed by law and are fully negotiable.
Enforcement: Agreements made in violation of these rules are void and unenforceable. Agents who don’t follow the law may also face licensing violations.
Why This Matters for Buyers
This new law is designed to make the buyer-agent relationship more transparent. Before you make an offer, you’ll know:
What your agent will do for you
How long you’ll be working together
How your agent will be compensated
It ensures everyone is on the same page before moving forward with a purchase.
Final Thoughts
Buying real estate is a big decision, and these new rules are meant to protect both buyers and agents by putting expectations in writing upfront.
Remember: This blog post is educational, not legal advice. If you’re preparing to buy in 2025, talk with your agent about how this new requirement fits into your buying strategy.