California's New Buyer Agent Rules: What San Diego Homeowners Need to Know (2025)
TL;DR
- New law effective January 1, 2025: California AB 2992 requires buyer agents to sign written agreements before submitting offers, shifting fee negotiations from sellers to buyers.
- Sellers can decline concessions: You're not required to pay buyer agent fees if requested - you can accept, decline, or negotiate based on your needs.
- Cash buyers bypass complexity: Direct sales to cash home buyers eliminate buyer agent negotiations, representation agreements, and associated fees entirely.
- Traditional sales may take longer: New agreement requirements could extend timelines beyond the current 30-60 day average as buyers negotiate representation terms.
If you're planning to sell your San Diego home in 2025, the rules of the game just changed. Starting January 1, California Assembly Bill 2992 requires all buyer's agents to sign written representation agreements with their clients before submitting purchase offers. Combined with the National Association of Realtors settlement that ended mandatory commission-sharing, these changes reshape how homes get bought and sold across San Diego County.
For sellers, this means buyers may now negotiate agent fees separately, request you cover those costs as concessions, or choose to proceed without representation entirely. Understanding these shifts helps you make smarter decisions about how to sell your property—and whether working with a San Diego cash home buyer might save you time, money, and complexity.
What AB 2992 Changes for California Real Estate Transactions
Assembly Bill 2992, signed by Governor Newsom on September 24, 2024, establishes a clear mandate: buyer's agents must obtain signed representation agreements with their clients "as soon as practicable, but no later than the execution of the buyer's offer to purchase real property." This differs from industry settlement practices implemented in August 2024, which required agreements before property tours.
Required Agreement Components
According to the California Department of Real Estate, every buyer-broker agreement must now include four critical elements:
- Compensation amount – The exact fee the buyer's agent will receive
- Services to be rendered – A clear description of what the agent will do
- Payment timing – When compensation becomes due
- Expiration date – Cannot exceed three months from execution
The DRE emphasizes that these requirements shift responsibility from sellers to buyers: "Buyers' agents must negotiate their compensation directly with their buyer clients." This marks a fundamental departure from the traditional model where sellers and listing agents determined buyer agent compensation through MLS listings.
Payment Options for Buyers
Once a buyer signs a representation agreement, they have several choices for covering their agent's fees:
- Pay out-of-pocket – Direct payment to their agent from personal funds
- Request seller concessions – Ask you, the seller, to cover some or all agent costs as part of the purchase price (you can accept or decline)
- Walk away – Abandon the property if fees are too high and work with their agent on another home
- Proceed without representation – Make an offer without an agent, or explore dual agency if the agreement permits
How the NAR Settlement Changed Commission Structures
California's new law didn't emerge in a vacuum. In March 2024, the National Association of Realtors agreed to pay $418 million to settle antitrust lawsuits alleging the organization conspired to keep agent commissions artificially high. The settlement banned "offers of compensation" to buyer's agents in MLS databases—a practice that previously allowed sellers to advertise how much they'd pay buyer agents.
San Diego Market Impact
For San Diego homeowners, the financial implications are significant. With the median home price at $802,500 in early 2024, a traditional 6% commission meant sellers paid approximately $48,150. If commissions drop to 4% under the new system, that figure falls to roughly $32,100—a potential savings of $16,050 per transaction.
Norm Miller, a real estate professor at the University of San Diego, suggested these changes could motivate more inventory by encouraging sellers who were previously discouraged by high commission costs. "Part-time, mediocre type agents" may find it harder to justify their fees when buyers must negotiate compensation directly, he noted in comments to the San Diego Union-Tribune. For homeowners wondering about cash vs traditional sale timelines and costs, these commission changes make the comparison even more relevant.
The local market context matters: San Diego County had roughly 23,000 real estate agents in January 2024, yet only 1,678 homes sold that month—tied for the lowest monthly sales on record. This oversupply of agents competing for limited transactions may create downward pressure on commission rates.
Why These Changes Favor Cash Home Buyers
The new buyer representation requirements create friction in traditional transactions. Buyers must now negotiate and commit to agent fees before making offers, potentially delaying decisions or complicating deals. Sellers may face requests for larger concessions to cover these costs, reducing their net proceeds.
Cash buyers who purchase directly from homeowners eliminate this entire layer of complexity. Here's how:
No Buyer Agent Means No Agreement Requirements
When you sell to a professional cash home buyer in San Diego, there's no buyer's agent involved. The cash buyer evaluates your property directly, makes an offer, and closes the transaction—often within 7-14 days. You avoid negotiating over who pays buyer agent fees because those fees simply don't exist in the deal structure.
Simplified Closing Process
Traditional sales now involve:
- Your listing agent's commission
- Potential buyer agent commission (either paid by you as a concession or by the buyer)
- Financing contingencies and appraisal requirements
- Extended timelines for loan approval
- Risk of deals falling through if buyers can't secure financing
Cash transactions eliminate all buyer-side financing and representation complications. You receive a straightforward offer based on your property's condition and market value, then close on a timeline that works for you.
Transparent Pricing Without Hidden Costs
Under the new AB 2992 requirements, buyers may ask you to cover agent fees ranging from 2-3% of the purchase price. On an $800,000 San Diego home, that's $16,000-$24,000 you might need to concede beyond your listing agent's commission.
Cash buyers provide all-in offers. The price you're quoted accounts for the as-is condition of your property without expecting you to subsidize anyone else's representation costs. This transparency helps you make informed decisions about whether to accept an offer.
When Selling to a Cash Buyer Makes Sense
The new buyer agent rules don't make cash sales the right choice for every San Diego homeowner, but they strengthen the value proposition in specific situations:
Time-Sensitive Sales
If you're facing foreclosure, relocating for work, going through a divorce, or settling an estate, waiting for buyers to negotiate agent agreements and secure financing adds unwanted delays. Cash buyers close in days, not months.
Properties Needing Repairs
Traditional buyers often require sellers to complete repairs identified during inspections. Their agents may now push for additional concessions to cover representation fees on top of repair costs. Cash buyers purchase as-is, eliminating repair negotiations entirely.
Inherited Properties
Inheriting a San Diego home often means dealing with a property you don't want to maintain, pay taxes on, or update for market sale. The new agent rules add another layer of complexity to an already stressful situation. Cash sales provide a clean exit without the hassle of listings, showings, and commission negotiations.
Financial Distress
Homeowners behind on mortgage payments or struggling with property tax debt need certainty, not contingent offers that might collapse if buyers can't agree on agent fees or qualify for loans. Cash transactions close reliably, providing the funds you need to resolve financial obligations.
Red Flags to Watch in the New Buyer Agreement Era
The California Department of Real Estate issued consumer warnings about potential issues arising from the new representation requirements. Sellers should watch for these red flags when reviewing offers. If you have questions about navigating these changes, our frequently asked questions page covers common concerns about cash home sales in San Diego.
- Vague concession requests – Buyers asking for "standard" or unspecified amounts to cover agent fees
- Last-minute fee negotiations – Agents introducing new compensation demands after initial offer acceptance
- Dual agency without disclosure – Situations where one agent represents both parties without clear written agreement
- Unlicensed representatives – Always verify agent credentials through the DRE's Public License Lookup
Cash buyers operating without buyer agents eliminate most of these concerns by removing the representation layer entirely from the transaction.
Quick Facts: San Diego Real Estate Market Changes
| Fact Category | Details |
|---|---|
| AB 2992 Effective Date | January 1, 2025 |
| Agreement Requirement | Signed before buyer's offer execution |
| Maximum Agreement Duration | 3 months from execution date |
| San Diego Median Home Price (Jan 2024) | $802,500 |
| Traditional 6% Commission Cost | ~$48,150 |
| Potential 4% Commission Cost | ~$32,100 (savings of $16,050) |
| San Diego County Active Agents (Jan 2024) | ~23,000 agents |
| Homes Sold (Jan 2024) | 1,678 (record low) |
Data Sources: California Department of Real Estate (AB 2992 requirements), San Diego Union-Tribune (January 2024 market data), National Association of Realtors Settlement (commission structure changes)
Frequently Asked Questions
Do I have to pay a buyer's agent commission if they ask for it as a concession?
No. Under the new rules, buyers may request you cover their agent's fees as part of the purchase price, but you're free to accept or decline. The California DRE confirms that sellers can reject concession requests, and buyers must then either pay their agent directly, walk away from the property, or proceed without representation. This negotiating point is entirely voluntary on your part.
How does selling to a cash buyer avoid these new buyer agent complications?
Cash home buyers in San Diego typically purchase properties directly without representation from buyer's agents. Since there's no buyer agent involved, there's no representation agreement to negotiate and no fees for you to consider covering as concessions. The cash buyer makes an all-in offer based on your property's value, and you close the transaction without any buyer-side commission negotiations.
Will AB 2992 lower home prices in San Diego?
The impact remains uncertain. Real estate professor Norm Miller suggested lower overall commission costs might encourage more sellers to list properties, potentially increasing inventory and reducing prices over time. However, San Diego's limited housing supply and strong demand could offset commission-related price effects. Cash buyers offer market-based prices regardless of commission structures, since they don't involve buyer agents in their transactions.
What happens if a buyer shows up without a signed representation agreement after January 1, 2025?
Buyers have the option to proceed without agent representation, which is perfectly legal. They can make offers directly to you or your listing agent, negotiate terms themselves, and hire a real estate attorney for contract review if desired. This approach eliminates buyer agent fees entirely but places more responsibility on the buyer to navigate the transaction. For sellers, it can simplify negotiations by removing an additional party from the deal.
Can I still list my home traditionally and also consider cash offers?
Yes. Many San Diego homeowners list their properties with agents while simultaneously entertaining cash offers from professional buyers. This dual approach lets you test the traditional market while keeping a fast-close option available if you need it. Cash buyers often provide backup offers that close quickly if your listed sale falls through due to financing issues, inspection problems, or buyer agent fee disputes.
How long does a typical cash sale take compared to a traditional sale under the new rules?
Traditional sales in San Diego average 30-60 days from listing to closing, though the new buyer agent agreement requirements may extend timelines as buyers negotiate representation terms. Cash sales typically close in 7-14 days since they skip financing approval, appraisals, and buyer agent negotiations. If you're facing a time-sensitive situation like foreclosure, estate settlement, or relocation, this speed difference can be crucial.
Making the Right Choice for Your San Diego Property
California's new buyer representation requirements create both opportunities and challenges for San Diego homeowners. If you have time, your home is in excellent condition, and you're comfortable navigating potential buyer agent fee negotiations, a traditional listing may still maximize your sale price.
But if you value speed, certainty, and simplicity—or if your property needs repairs, you're facing financial pressure, or you simply want to avoid the complexity of commission negotiations—working with a professional San Diego cash home buyer offers a clear alternative.
The new rules took effect to protect consumers and increase transparency. Understanding how they work helps you make informed decisions about the best path forward for your specific situation.
Free consultation • No buyer agent fees • Close in 7-14 days