How are buyer's agents paid in California now?

Start with the buyer representation agreement

The buyer-broker representation agreement establishes the services the brokerage will provide, its compensation, when payment is due and the terms for ending the relationship.

Compensation is negotiable. Depending on what the brokerage offers and the parties agree to, it may be a percentage of the purchase price, a flat fee or another clearly defined arrangement.

For agents subject to the NAR settlement rules, compensation must be specific and objectively calculable. It cannot simply say “whatever the seller offers,” and the brokerage cannot collect more than the compensation agreed to with the buyer.

Ask what services are included and how the fee relates to the representation you will receive.

The seller can still pay some or all of the fee

The changes did not prohibit sellers from paying buyer-agent compensation.

Possible arrangements include:

• Seller payment: The seller agrees to pay an amount toward the buyer brokerage’s compensation.
• Listing brokerage payment: The listing brokerage agrees to share compensation, with the seller’s required written authorization.
• Buyer payment: The buyer pays the compensation required under the representation agreement.
• Combined payment: An agreed seller or listing-brokerage payment covers part of the fee, and the buyer pays an applicable remaining balance.

A seller contribution can be requested as part of the purchase negotiations. The seller can accept, reject or counter that request.

The amount you agree to pay your brokerage and the amount a seller agrees to contribute are separate negotiations. Make sure the documents explain how third-party payments reduce your obligation.

Understand what happens if the seller pays less

Suppose your agreement establishes a $20,000 brokerage fee, and the seller agrees to contribute $15,000 toward it. If your agreement makes you responsible for the balance, you would need to account for the remaining $5,000 unless another written arrangement is reached.

This is an illustration, not a suggested or standard fee.

Before committing to a purchase, confirm your potential responsibility and discuss any needed changes with your agent. Do not assume the brokerage will automatically reduce its fee or that you can add the difference to your mortgage. Your lender should confirm how the proposed arrangement affects financing and cash needed to close.

Expect the agreement before buyer-agent showings

California law requires a buyer-broker representation agreement as soon as practicable and no later than signing the buyer’s purchase offer.

Regulations effective January 1, 2026 establish a rebuttable presumption that obtaining the agreement before an agent shows property to their buyer is practicable. Agents covered by the NAR settlement rules also generally must have the written agreement before touring a home with a buyer.

Simply attending an open house on your own does not require you to hire the hosting agent. A listing agent showing the property solely on the seller’s behalf is not automatically acting as your buyer’s agent.

Review the duration and cancellation terms

For individual buyers, California generally limits the agreement to three months, defined by current regulations as 90 calendar days. Shorter terms can be negotiated. The statutory term limit has exceptions for agreements with corporations, LLCs and partnerships.

Agreements cannot renew automatically. Renewals must meet the applicable written-signature and timing requirements.

Also review exclusivity, geographic or property limits, cancellation provisions and any circumstances in which compensation could remain due after termination or expiration. Finding a home yourself or contacting the listing agent does not automatically cancel an existing compensation obligation.

Know when payment becomes due

Many purchase transactions provide for brokerage compensation to be disbursed through escrow at closing. However, your agreement controls when compensation is earned and payable.

Ask whether any fee could become due if the purchase does not close, you cancel the agreement or you later buy a property introduced during the agreement’s term.

An agent should explain these provisions before you sign, including any additional fees.

Questions to ask before signing

• What services will you provide for the agreed compensation?
• What is the exact fee or method of calculating it?
• How will seller or listing-brokerage payments reduce what I owe?
• What happens if the seller declines to contribute?
• Is the agreement exclusive, and which properties does it cover?
• How long does it last, and how can I end it?
• Could I owe compensation if the purchase does not close?
• Will all negotiated changes be documented in writing?

You should know the services you are hiring, the compensation you have agreed to and the amount you may need to pay yourself before proceeding.