What Is the NAR Settlement Buyer Agreement and Do I Have to Sign One in California?
Justin Borges, DRE #01940318
8 min read
Updated August 2026
If you are searching for a home in the Los Angeles area and an agent just told you to sign paperwork before they will show you anything, you are not alone in finding that unexpected. Before August 2024, most California buyers toured homes freely without signing a thing. That changed. Understanding why the rule changed and what the agreement actually requires takes less than ten minutes, and it will put you in a much better position at the negotiating table.
The National Association of Realtors reached a $418 million settlement in March 2024, resolving antitrust lawsuits that alleged buyer agent compensation practices artificially inflated commissions across the country. Two major rule changes came with that settlement, effective August 17, 2024. First, any agent showing a buyer a home must have a signed buyer representation agreement before the tour. Second, sellers are no longer required to offer buyer agent compensation through the MLS. These two changes together shifted how buyers and agents do business from day one of the relationship. (NAR, March 2024)
The agreement is not designed to trap you. It is a contract that defines who represents you, what services your agent will provide, what the compensation rate is, and how long the relationship lasts. The key is understanding your options and what you can ask for before you put a signature on anything.
What This Guide Covers
- What was the NAR settlement and why did it happen?
- What is a buyer representation agreement in California?
- Do I have to sign one before touring a home?
- What am I actually committing to when I sign?
- What happens if I find a home on my own after signing?
- Can I negotiate the terms before I sign?
- Who pays the buyer's agent now that the rules have changed?
- Frequently Asked Questions
What Was the NAR Settlement and Why Did It Happen?
For decades, when a home was listed on the MLS, the seller's listing agent would offer a predetermined commission to any buyer's agent who brought a successful buyer. Critics argued this practice made it nearly impossible for buyer agent commissions to be negotiated on their merits, because the compensation was baked into every listing regardless of what the buyer's agent actually did. Several class-action antitrust lawsuits argued that this arrangement artificially inflated buyer agent commissions nationwide.
In March 2024, the National Association of Realtors agreed to a $418 million settlement to resolve those lawsuits. The settlement introduced two binding rule changes that took effect August 17, 2024, for all NAR-affiliated brokerages, which covers the overwhelming majority of agents in California and across the country. (NAR, March 2024)
The Two Rule Changes at a Glance
The practical effect: buyers now enter the process knowing in writing what their agent will do and what it will cost. Sellers no longer have a standard MLS field where they must commit to covering buyer agent compensation before a buyer even appears. Those two changes set the stage for every conversation you will have with an agent from the moment you want to see a property.
"The goal of the settlement was transparency. Buyers were paying for agent services without always knowing it or negotiating it. The new rules force the conversation to happen before the touring begins."
Context — NAR Settlement Implementation, August 2024What Is a Buyer Representation Agreement in California?
In California, the standard buyer representation agreement is the Buyer Representation and Broker Compensation Agreement, known by its initials as the BRBC. This form is published by the California Association of Realtors (C.A.R.) and is the most commonly used document across the state. (C.A.R., 2024)
The BRBC defines several key terms of the buyer-agent relationship. It names the agent and brokerage representing you. It sets the time period during which the agreement is in effect. It describes the services the agent will provide, which can range from property searches to contract preparation to negotiation support. It specifies how the agent will be compensated, whether as a percentage of the purchase price, a flat fee, or another structure. And it includes an exclusivity clause that determines whether you can work with other agents during the agreement period.
What the BRBC Covers
Before the settlement, a buyer might work with an agent informally for weeks before any paperwork was signed. That informal arrangement is now off the table. The agent must have a signed agreement in place before showing you any home, no exceptions. The good news is that signing an agreement does not mean giving up negotiating power. You have significant control over what that agreement says before you put your name on it.
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Search LA Homes on LA Metro Home FinderDo I Have to Sign One Before Touring a Home in California?
Yes. Since August 17, 2024, any agent who is a NAR member must have a signed buyer representation agreement before showing a buyer a property. This is not optional on the agent's end. If an agent walks you through a home without a signed agreement, that agent is violating their membership obligations.
What you control is the type of agreement you sign. The NAR settlement rules do not require a long-term exclusive agreement. They require a written agreement, period. Some agents offer a single-property (limited) agreement that covers only the specific home you are about to tour. Once that showing ends, the agreement expires automatically. You are not committed to that agent for any future searches or any other properties.
The Single-Property Option
Some agents offer a single-property or single-showing agreement in place of a long-term exclusive. This covers one property or one visit only. If you decide you want to continue working with that agent after the showing, you can sign a longer agreement at that point. If you do not, you have no further obligation. Ask specifically whether this option is available before agreeing to sign a longer-term document.
Open houses operate under a slightly different dynamic. A seller's agent hosting an open house can show that specific home to the public without requiring a buyer representation agreement, because the agent is not representing the buyer in that interaction. The requirement kicks in when a buyer's own agent is involved in touring a property on the buyer's behalf.
Have Questions About the Buyer Agreement Before You Sign?
The buyer representation agreement is required before touring homes, but the terms are negotiable. Text us and we will explain exactly what you are agreeing to before you sign anything.
Text Us — We Will Explain ItWhat Am I Actually Committing to When I Sign?
The scope of your commitment depends entirely on which type of agreement you sign. An exclusive long-term agreement and a single-property limited agreement look very different on paper and create very different obligations for you as a buyer.
The comparison below breaks down the two main types of buyer representation agreements you are likely to encounter when searching for a home in the Los Angeles area or anywhere in California. Read through each column carefully before agreeing to any specific agreement structure.
| Feature | Exclusive Long-Term Agreement | Single-Property (Limited) Agreement |
|---|---|---|
| What it covers | All homes you view or purchase during the agreement term | One specific property or one showing only |
| Typical duration | 30 to 90 days (negotiable before signing) | One visit, expires automatically after showing |
| Compensation agreed | Rate applies to any home you buy during the term | Rate applies only if you buy this specific property |
| Can I work with other agents? | Generally no, unless the agreement includes carve-outs | Yes, for any property not covered by this agreement |
| Best for | Committed buyers with an established relationship with this agent | Buyers meeting an agent for the first time or evaluating fit |
| Exit options | Request a mutual cancellation clause when negotiating terms | Expires automatically with no further action required |
Key Takeaway on Commitment
The most important thing to understand is that you are not locked into the terms the agent first presents. The compensation rate, the term length, and the exclusivity scope are all negotiable before you sign. Signing without negotiating is always an option, but so is reading carefully and asking for changes.
Within an exclusive long-term agreement, the two most consequential provisions are the compensation clause and the exclusivity clause. The compensation clause sets the rate your agent receives, and whether that rate comes from the seller through escrow or from you directly. The exclusivity clause determines whether you are locked into this one agent for every property search during the agreement period, or whether there are carve-outs for properties you find independently.
What Happens If I Find a Home on My Own After Signing?
This is the question most buyers do not think to ask until it is already relevant. Say you sign a 60-day exclusive buyer representation agreement with an agent. Three weeks later, you drive past a For Sale by Owner property in Pasadena that is not on the MLS. You call the seller directly. Are you still on the hook to pay your buyer's agent?
The answer depends entirely on what the exclusivity clause in your agreement says. Many standard agreements cover all residential property in the state during the agreement period, which would include properties you find independently. If that is what you signed, your agent may have a claim to compensation even if they played no role in finding the property.
FSBO Scenario: What to Check in Your Agreement
If you are already in an exclusive agreement and you find a property you want to pursue independently, contact your agent and brokerage manager. Most reasonable agents will not pursue compensation for a property they had no hand in finding. However, you should not assume that is the case unless it is in writing. The cleaner solution is to ask for a self-found exclusion before you sign, not after the situation arises.
For buyers in the Los Angeles area who are considering off-market properties, FSBO listings, or developer-direct new construction that does not go through a buyer's agent, this clause is particularly worth reviewing. Those types of transactions are more common in LA than in many other markets, and knowing where you stand before you encounter one will save you a difficult conversation later.
Can I Negotiate the Terms Before I Sign?
Yes, and you should. Every element of the California BRBC is negotiable. The agent presents a proposed agreement, but that proposal is not a take-it-or-leave-it offer. You can ask for changes to the compensation rate, the term length, the exclusivity scope, and the cancellation provisions before you sign anything.
On the compensation rate: common rates in the current Los Angeles market range from roughly 2% to 2.5% of the purchase price, but there is no legally required rate and no MLS-mandated floor. Rates vary by agent, brokerage, and transaction type. If an agent presents a rate that does not work for your situation, it is entirely reasonable to ask whether that rate is negotiable. Some agents will reduce the rate for buyers who have a clear purchase timeline and a strong financial profile. Others offer a flat-fee arrangement for buyers who want to be more hands-on in the search process.
"Buyers who do not ask do not get. The terms in front of you are a starting point, not a final offer."
Buyer Representation Agreements — What Is NegotiableOn the term length: a 90-day exclusive agreement is a significant commitment for a buyer who has not yet seen how an agent performs. A shorter term of 30 days, or a term tied to a specific geographic area or property type, gives you a natural review point before extending the relationship. Ask for the shorter term up front. You can always sign a new agreement to extend it once you have seen the agent in action.
On the exclusivity scope: some agreements can be limited by geography, property type, or price range. If you are primarily looking in specific Los Angeles neighborhoods such as Eagle Rock or Pasadena, you can ask whether the agreement can be limited to those areas so you remain free to work with a different agent in another market if that search expands later.
What You Can Ask to Negotiate
Who Pays the Buyer's Agent Now That the Rules Have Changed?
This is probably the question that generates the most confusion post-settlement. The short version: sellers can still pay buyer agent compensation, they just no longer have to advertise it on the MLS before a buyer even arrives. The longer version involves three distinct scenarios that play out differently depending on the listing and the negotiation.
In the first scenario, which is still the most common in the Los Angeles market, the seller offers buyer agent compensation voluntarily. The offer may be communicated through the listing description, through an agent-to-agent conversation, or through disclosure at the time an offer is written. Buyers working with represented agents in these transactions pay nothing out of pocket for buyer agent services.
Three Compensation Scenarios
In the second scenario, the buyer's agent compensation is negotiated as part of the purchase offer itself. The buyer includes a request for seller-paid buyer agent compensation as a term in their offer. If the seller accepts that term, the compensation flows through escrow at closing, and the buyer does not write a separate check. This approach is common in competitive markets where buyers are motivated to get creative about how agent fees are handled.
In the third scenario, the buyer pays their agent directly. This is the scenario that gets the most attention in media coverage of the settlement, but it is not universally how things play out. For buyers with strong cash positions or large down payments who are purchasing in markets where seller concessions are common, this can be straightforward. For buyers stretching their finances for a down payment, this is a real concern that should be addressed openly with your agent before you begin the search.
A Practical Note for LA Buyers
In the current Los Angeles market, many sellers are still offering buyer agent compensation, particularly on properties that have been sitting on the market for 30 days or more. Buyers who are working with experienced agents in this market are finding that the practical impact of the settlement on their out-of-pocket costs has been less severe than initial coverage suggested. Your specific situation will depend on the property, the seller's motivation, and how your offer is structured.
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Browse LA Homes by PriceQuick Reference: Buyer Agreement Decisions
| Your Situation | What to Ask For |
|---|---|
| Seeing an agent for the first time | Request a single-property agreement covering this showing only. Sign the longer exclusive after you've seen how the agent works. |
| Not sure about your timeline | Ask for a 30-day term instead of 60 or 90 days. A shorter window gives you a natural review point before extending. |
| Looking in multiple cities or areas | Ask whether the exclusivity scope can be limited to specific zip codes or neighborhoods rather than the entire state. |
| Considering off-market or FSBO properties | Ask for a self-found exclusion clause before signing. Without it, you may owe compensation on properties your agent never showed you. |
| Concerned about paying agent fees out of pocket | Ask your agent directly what happens if the seller does not offer compensation. Know the three scenarios before you fall in love with a listing. |
| Unhappy mid-search and want to switch agents | Contact the brokerage manager. Ask for a mutual cancellation. Most brokerage offices will release a buyer rather than force a hostile relationship to continue. |
Frequently Asked Questions
What is the NAR settlement and why does it affect California buyers?
The National Association of Realtors reached a $418 million settlement in March 2024, resolving antitrust lawsuits that alleged buyer agent commissions were artificially inflated through MLS rules. Two changes took effect August 17, 2024: agents must have a signed buyer representation agreement before showing any home, and sellers are no longer required to offer buyer agent compensation through the MLS.
Do I have to sign a buyer agreement before seeing a home in California?
Yes. Since August 17, 2024, any agent who shows you a home must first have a signed buyer representation agreement. The question is not whether you sign, but what type of agreement. A single-property agreement covers one showing only, while an exclusive agreement covers all homes for a set period. You have options.
What is a single-property buyer agreement and how is it different from an exclusive agreement?
A single-property (limited) buyer agreement covers one specific property or one showing only. Once that showing is over, the agreement expires automatically. An exclusive long-term agreement covers all homes you view or purchase during a set period, typically 30 to 90 days. Some agents offer the single-property option for buyers who want to test the relationship before committing longer-term.
What happens if I find a for-sale-by-owner home on my own after signing a buyer agreement?
It depends on the exclusivity clause in your agreement. Some agreements have a self-found exclusion that lets you purchase a home you found independently without owing your agent compensation. Always read the exclusivity section carefully before signing. If the agreement does not include that exclusion, ask for one to be added before you sign.
Can I cancel a buyer representation agreement if I want to switch agents?
Many buyer representation agreements include a mutual cancellation clause. If yours does not, you can request one before signing. If you are already in a disagreement with an agent, contact the brokerage manager directly. Most brokerage offices will release a buyer from an agreement rather than force a hostile relationship to continue.
Who pays the buyer's agent commission if the seller does not offer compensation?
Three common scenarios exist. First, the seller may still voluntarily offer buyer agent compensation even though the MLS no longer requires it. Second, you and your agent can negotiate buyer agent compensation as a term in your purchase offer, which the seller then funds at closing. Third, you pay your agent directly outside of escrow. Which option applies depends on the specific listing and the negotiation.
Is the compensation rate in a California buyer representation agreement negotiable?
Yes. Every term in a California Buyer Representation and Broker Compensation Agreement (BRBC) is negotiable, including the rate, the term length, and the exclusivity scope. Common rates in the current market range from roughly 2% to 2.5% of the purchase price, but there is no fixed or required rate. Ask directly whether the rate can be adjusted before you sign.
Questions About the Buyer Agreement in California?
The NAR settlement changed how buyers and agents work together. You deserve an agent who explains every part of the agreement before you sign — not after.
- Full explanation of the buyer agreement before you commit to anything
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