Written Buyer Agreements in San Diego: What to Know Before You Tour a Home

Since August 17, 2024, an agent who is a participant in a multiple listing service and who works with a buyer must have a written agreement with that buyer before touring a home, in person or by live video. The agreement has to state the agent's compensation in a way that can be determined objectively, and it must say that commissions are not set by law and are fully negotiable.

What changed

The National Association of REALTORS published a guide to written buyer agreements on May 31, 2024, and it says the requirement took effect on August 17, 2024. It applies to an MLS participant working with a buyer, and it covers in-person tours and live virtual tours. The rule comes from the association's settlement and its practice changes, so it is a rule for members and participating brokers, not a general statement about how every agent works.

For a San Diego buyer, the practical effect is simple. If you want to tour homes with an agent who participates in the MLS, expect to be asked to sign an agreement first. That is a good reason to understand what you are signing, and to compare agents the way I describe in working with a REALTOR.

What the agreement must say

• The amount or rate of any compensation from any source, or how it will be determined, must be specified and conspicuously disclosed.
• The amount must be objectively ascertainable and cannot be open-ended. The guide's example of a prohibited term is "whatever amount the seller is offering to the buyer."
• The agent may not receive compensation from any source that exceeds the agreed amount or rate.
• It must conspicuously disclose that broker commissions are not set by law and are fully negotiable.
• It must include any provisions required by law.

What you can negotiate

The guide lists several terms that are open for discussion, and it says the association's policy does not dictate the relationship type, term, services or the type or amount of compensation.

• Duration, including whether the agreement extends automatically until closing once a purchase contract is accepted.
• Termination, with or without cause, by either you or the agent.
• A carryover period, during which compensation may be owed if you sign a purchase agreement within an agreed time after terminating.
• A retainer fee, and whether it is part of the total compensation, credited against it or refundable.
• The type of representation, as permitted by state law.
• How conflicts of interest are handled, such as representing other buyers on the same property or dual agency.
• Dispute resolution, such as mediation or arbitration.

Questions to ask before you sign

The guide does not publish a list of buyer questions, but its provisions point to them:

1. What will I pay, from what source and how is it calculated? Is the amount fixed?
2. What services will you provide?
3. How long does this last, and how can either of us end it?
4. Is there a carryover period?
5. Is any retainer refundable or credited?
6. What type of representation is this, and how are conflicts of interest handled?
7. Does the agreement require arbitration or waive a jury trial?

I am not an attorney, and a written agreement is a legal contract, so ask a lawyer if you need advice about its terms. My role is to explain the process in plain words.

How it fits the home buying process

The agreement comes at the start. After it, the usual steps are getting a lender's approval, searching, writing an offer and moving through contingencies and closing, as I describe in the home buying process. Your lender will ask about your money early, and a mortgage rate lock comes later, which I explain in my rate lock guide.

If you are selling a home and buying again, plan the order of events. My guide to home equity and HELOCs covers one source of funds, and my wire fraud guide covers the step where money actually moves.

My advice for San Diego buyers

1. Ask for the agreement ahead of time so you can read it before the first tour.
2. Make sure the compensation is stated as a specific amount or rate.
3. Ask what happens if the relationship does not work out and how it can be ended.
4. Ask about the carryover period and any retainer before you sign.
5. Keep a copy and ask your agent to walk you through each section.

A note on advice

I am a REALTOR®, not a lender, attorney, tax professional or financial advisor, so this guide is general information. Your lender can tell you what you qualify for, and a CPA or attorney can answer tax and legal questions.

Related guides

• Home Equity in San Diego: What It Is and How a HELOC or Home Equity Loan Works
• Working With a REALTOR in San Diego: What to Expect and How to Check a License
• Wire Fraud at Closing in San Diego: How to Protect Your Down Payment
• Mortgage Rate Locks in San Diego: How They Work and What Can Still Change
• What Are the Steps to Buying a Home in San Diego?
• How to Get Preapproved for a Mortgage in San Diego: What Lenders Check and What the Letter Means

Frequently asked questions

Do I have to sign a written agreement before touring a home?

Since August 17, 2024, National Association of REALTORS practice rules require an MLS participant working with a buyer to sign a written agreement before touring a home.

What must the agreement say about compensation?

It must state the amount or rate, or how it is determined, in an objectively ascertainable way, and it cannot be open-ended.

Are agent commissions set by law?

No. The agreement must conspicuously disclose that broker commissions are not set by law and are fully negotiable.

What can I negotiate in a buyer agreement?

You can negotiate duration, termination, any carryover period, a retainer, the type of representation, how conflicts are handled and dispute resolution.

Does this apply to virtual tours?

Yes. The requirement covers in-person tours and live virtual tours.

About the author

Trevor Landress is a San Diego REALTOR® with Coldwell Banker West (DRE# 02126901). He was born and raised in San Diego and has been licensed since 2021.

Trevor helps homeowners sell, guides first-time buyers through the home buying process and assists investors with their next acquisition. His work includes negotiating offers, analyzing market trends, building pricing strategies and running marketing campaigns for his listings.

He serves clients across San Diego County, from coastal communities like La Jolla, Del Mar and Carlsbad to neighborhoods inland.

Trevor is part of the Campbell Group, a three-generation real estate team, and he and the Campbell Group consistently rank as a top producing team at Coldwell Banker West each month. He writes these guides to help San Diego buyers and sellers navigate an ever-changing market. To talk through your plans, call or text (619) 402-4614 or contact Trevor Landress.

How I help San Diego home buyers

I help buyers sort out their budget, understand their loan options with a lender, search for homes, write and negotiate offers, keep track of inspection and contingency deadlines and stay organized through closing.

How I help San Diego home sellers

I help sellers price their home, prepare it for the market, market it to buyers, review and negotiate offers and manage the steps from an accepted offer to closing.

Rules and official pages

• National Association of REALTORS: Written buyer agreements 101