We Call It A Buyer Agreement

Most buyers are hesitant to sign a buyer agreement because they don’t want to feel restricted or obligated to pay a Realtor. That concern is completely understandable, and this agreement is often misunderstood.

The official name of the document is the Buyer Representation and Broker Compensation Agreement. While the title may sound intimidating, the agreement is designed to protect both you and your Realtor by clearly outlining expectations, responsibilities, and options throughout the home‑buying process.

Rather than limiting you, the agreement creates clarity. It ensures you know what services you are receiving, how your Realtor is working on your behalf, and how compensation is handled—so there are no surprises later. In fact, this agreement is made up of six separate forms combined into one, each serving a specific and important purpose.

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Form #1

Disclosure Regarding Real Estate Agency Relationship

This form explains the different roles Realtors may have in a real estate transaction and how those roles can change.

• The agent representing the homeowner is called the Seller’s Agent. In some cases, that agent may work alongside a co‑agent to help market and sell the property.
• The agent representing the buyer is called the Buyer’s Agent. A Buyer’s Agent works exclusively in the buyer’s best interest, even if their compensation ultimately comes from the seller.

Both Buyer’s Agents and Seller’s Agents owe their clients a fiduciary duty, which means they must act with absolute care, honesty, integrity, and loyalty.

In certain situations, a Realtor may represent both the buyer and the seller. This is known as dual agency. Dual agency can only occur with full disclosure and written consent from both parties. When this relationship is established, an additional form—often referred to as express permission—must be signed. Even in dual agency, the Realtor may not disclose confidential information such as financial details, motivation, or bargaining position without permission.

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Form #2

Buyer Representation and Broker Compensation Agreement

This is the core agreement that outlines how you and your Realtor will work together. It covers several key points:

• The term of the agreement: when representation begins and how long it lasts.
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• Compensation: how your Realtor is compensated, whether by a percentage of the purchase price or a flat fee. 
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• Who pays the compensation.
• Historically, the seller paid both the listing agent and the buyer’s agent. Today, sellers are no longer contractually required to pay the buyer’s agent, which means compensation must be addressed upfront and in writing.

There is an important option within this agreement that allows buyers to indicate they do not have sufficient funds to pay their agent directly and would prefer to request that the seller cover the buyer‑agent compensation as part of the purchase offer. This keeps the process transparent and allows the compensation to be negotiated just like price, repairs, or other terms.

Form #3

Possible Representation of More Than One Buyer or Seller – Disclosure and Consent

This form explains how a real estate brokerage may work with more than one buyer or seller at the same time. A brokerage can represent buyers, sellers, or both, and may do so as a company or through individual agents working under the brokerage license.

In certain situations, the brokerage may represent both the buyer and the seller in the same transaction. This is called dual agency. Dual agency can occur if one agent represents both parties or if different agents from the same brokerage represent the buyer and seller. When this happens, it is fully disclosed so everyone understands how representation works.

Unless a separate confidentiality agreement (C.A.R. NDA) is signed, some basic information about offers may be shared as part of the negotiation process. This form ensures transparency about how representation is handled from the start.

Form #4

Broker Compensation Advisory

This form explains how real estate agents are paid. When a seller lists a property, they agree to compensate their listing broker once the sale successfully closes. The amount of compensation is fully negotiable and is agreed upon in advance in the listing agreement.

There may be situations where a buyer is not represented by an agent, and in those cases, additional compensation terms may apply. California law also allows a brokerage to represent both the buyer and the seller, provided all parties are aware and give consent.

When a buyer hires a real estate agent, the buyer agrees to compensate their broker when escrow closes. However, who ultimately pays that compensation—buyer or seller—can be negotiated as part of the purchase agreement. All compensation terms must be clearly outlined in writing so there is no confusion.

Form #5

Buyer’s Investigation Advisory

This form is designed to help buyers understand the importance of carefully investigating a property before completing a purchase. Think of it as a checklist to help you remember what to look for and to encourage confirming information with the city, county, or other authorities.

During the investigation period, buyers typically hire a professional home inspector to evaluate the property’s overall condition, including major systems such as the roof, plumbing, electrical, and HVAC. Buyers are also encouraged to verify square footage, property boundaries, and zoning.

Additional inspections or reports may include pest inspections, soil conditions, environmental concerns, earthquake risks, and utility services. Buyers should also look into factors that may affect insurance, such as fire or flood zones, and review permits, rental restrictions, solar systems, security features, and neighborhood considerations.

Form #6

California Consumer Privacy Act Advisory, Disclosure, and Notice

This form explains your privacy rights under the California Consumer Privacy Act (CCPA). The law gives California residents certain rights regarding how their personal information is collected, used, and shared by businesses.

During a real estate transaction, your information may be shared with parties involved in facilitating the sale or purchase, such as real estate agents, the Multiple Listing Service (MLS), real estate websites, lenders, service providers, and title and escrow companies. This form helps you understand how your information is handled and what rights you have regarding your personal data.