This is the second episode in our new video series depicting the seismic shift in the representation of buyers in 2025, cementing long-standing public policy.

This series will dramatize:

  • the origin of the “same-percentage, same-split” industry custom being unwound by recent legislation;
  • the contents of the newly mandated buyer representation agreement;
  • critical rules surrounding retainer periods, and how buyer representation is extended or modified; and
  • your practical use of the buyer representation forms as depicted through various sample transactions and scenarios.

Why this episode matters to your practice: Understanding the decades-long evolution of buyer representation in California is key to properly entering into a buyer representation agreement in the new paradigm.

The pre-1980s MLS environment

In everyday practice, a sales agent who works with a buyer is commonly referred to as the buyer agent. The employment document for the broker is a buyer representation agreement when representing buyer-clients who are individuals. [See RPI Form 103.1]

Editor’s note – When representing buyer-clients who are entities, the entity variation of the buyer representation agreement is used. [See RPI Form 103.2]

In prior years, “selling agent” was the misleading term used to refer to the agent working for the buyer.

Not today.

The broker the buyer employs is the buyer agent. Further, the transaction agent is the agent of the broker. The broker is the agent the buyer employs.

Historically, and incorrectly, the broker and their agent who represented a buyer were — but no longer are — referred to as subagents.

The misnomer was a product of the pre-1980s multiple listing service (MLS) environment controlled by a trade union. Their concept was that all brokers and their agents who were members of a trade union’s MLS system were automatically agents of the seller.

Thus, MLS subscribers working directly with a buyer were metaphorically said to be subagents employed by the seller to sell a property, when listed in the MLS working through the seller broker and their agent.

The MLS subscriber who produced the buyer was artificially viewed as appointed by the seller agent to act on behalf of the seller by virtue of the MLS subscription and the authority granted by a subagency provision in the listing agreement of the day.

Unlike today’s separate representation of buyers and sellers, the buyer of a property published in the MLS was deemed isolated and without representation – unable to employ an MLS member.

In practice, no broker member of an MLS had the ability to represent a buyer as it was a sellers-only club.

Purchase agreements the union published classified all brokers and their agents involved in an MLS transaction to be the employees of the seller.

No one at the time was employed in writing by the buyers. It was an “industry trade standard” that directly led to dual agency declarations by the courts and seller liabilities for buyer claims.

But that was a misconception and is no longer the case in California.

Buyer representation today

Legislation effective January 1, 2025 requires a buyer agent — not the seller agent unless acting as a dual agent — to enter into a written employment agreement when their buyer-client seeks their assistance to acquire an interest in any type of real estate. [See RPI Forms 103.1 and 103.2]

The buyer representation agreement provides upfront disclosure of the brokerage fee to be earned by the buyer agent for acquisition services. Further, the writing establishes the buyer will pay the fee, unless pushed to the seller for payment. In either circumstance, the fees are always included in the total purchase price the buyer is to pay to acquire property.

The written buyer representation agreement is entered into by the buyer agent:

  • as soon as practicable (ASAP) after determining the agent will represent the prospective buyer-client; and
  • always before the buyer signs an offer the agent will submit to acquire an interest in a property. [Calif. Civil Code §1670.50(a)]

Related article:

Buyer Representation Agreements: The end of the “gold standard”