Buyer Representation Agreement (AB 2992)
Reviewed by Jimi (James) Allyn · Founder, Verity NHD · 37-year real estate professional
Since January 1, 2025, a written buyer representation agreement must be in place as soon as practicable and before an offer is written, with compensation stated in writing.
What it is
AB 2992 added Civil Code section 1670.50, effective January 1, 2025, and it changed how buyer-side representation begins in California. A licensee representing a buyer in a residential transaction must enter into a written representation agreement with that buyer as soon as practicable, and in any event no later than the execution of the buyer's offer to purchase.
The agreement must state the compensation arrangement in writing — the amount or rate, and how it is to be paid. Compensation remains fully negotiable between the buyer and the licensee; the statute governs documentation, not price.
The agreement must state the services to be provided, the compensation and when it is due, and the terms on which it may be terminated. The agency disclosure required by Civil Code section 2079.14 is delivered first.
The maximum term is three months from the date the agreement is made. That cap does not apply to an agreement with a corporation, limited liability company, or partnership. There is no automatic renewal: each renewal must be in writing, signed, and may not itself exceed three months. An agreement that violates section 1670.50 is void and unenforceable.
DRE regulation 10 CCR section 2906.1 puts numbers on the term: "three months" means 90 calendar days beginning the day after the last party signs, and a renewal must be dated and signed before the original expires.
Business and Professions Code section 10147.5, which requires that a listing or agreement for compensation include a specified notice about negotiability of compensation, is the related cross-reference on the seller side.
This page is general information, not legal advice — confirm current C.A.R. form revisions.
Who signs it
The buyer and the licensee representing the buyer. Where more than one buyer will be on the offer, each should sign. The agency relationship disclosure is delivered alongside — logically before — so the buyer understands the relationship they are entering.
An amendment changing compensation, term, or scope should be in writing and signed. If a buyer wants to see a property before committing to representation, address that within the current C.A.R. form structure rather than proceeding on a verbal understanding.
When it's due
As soon as practicable in the relationship, and no later than the execution of the buyer's offer. In practice that means before you write. The safest habit is to complete the agency disclosure and the representation agreement at the start of the working relationship, not at the moment an offer is due.
Watch the term. The cap is three months — 90 calendar days beginning the day after the last signature — so a longer buyer search requires a written, signed renewal dated before the original expires. Nothing renews on its own, and an expired agreement at the moment an offer is written recreates exactly the problem the statute addresses.
If it's missed
Writing an offer without a signed representation agreement is a statutory violation, and the compensation consequence is the one that hurts: a licensee's claim to buyer-side compensation rests on the written agreement. An agreement that violates section 1670.50 — signed too late, running past three months, renewed automatically — is void and unenforceable, which means there is nothing left to sue on.
Add DRE exposure, and add the practical mess of a buyer who never agreed in writing to a compensation arrangement now disputing it after a successful closing. This is the newest requirement in the library and also the one where compliance is entirely within your control — it is a form, signed early.
Common mistakes
Signing it with the offer. "No later than" the offer means before, not stapled to it.
Leaving compensation blank or "to be determined." The amount or rate must be stated.
Letting the term lapse. Track the expiration and extend in writing.
Treating one signature as covering all co-buyers. Get every buyer.
Assuming the seller's offer of compensation is the agreement. Your agreement with your buyer is a separate document, and it controls what your buyer owes.
Statute
- Cal. Civ. Code § 1670.50 (AB 2992, operative Jan. 1, 2025)
- AB 2992 (2023–2024 Reg. Sess.) — bill text and history
- Cal. Bus. & Prof. Code § 10147.5 (compensation negotiability notice)
This page is general information, not legal advice. Confirm current forms with C.A.R. and the DRE.