Read it as a blog
Watch it as a video
subscribe to the Ivy Group’s newsletter
In this episode, we take a closer look at how California real estate is being reshaped in 2025. The state’s new law, AB 2992, requires written Buyer Broker Agreements before any offer can be made on real property. At the same time, the MLS system—long a central hub for listing practices—is undergoing major changes in response to the Burnett v. NAR settlement. Together, these developments bring fresh rules around commissions and disclosures that every broker, landlord, tenant, buyer, and seller needs to understand.
Effective January 1, 2025, Buyer Broker Agreements must now:
Be signed before offers are submitted.
Apply to all real property types—residential, commercial, and land, as well as leases longer than one year.
Be capped at three months without auto-renewal, unless the client is an entity like a corporation or LLC.
Spell out commissions, services provided, due dates for payments, and termination conditions.
Failure to comply makes the agreement void and exposes brokers to disciplinary risks. Clear disclosures and formal agreements are now non-negotiable.
The MLS has historically required sellers to set aside buyer broker commissions—often standard rates of 5–6%—and to join the system for visibility. The Burnett v. National Association of Realtors lawsuit alleged that these rules inflated commissions and restricted choice. The settlement that followed changed the game:
No more required upfront commission offers on MLS listings.
Broker compensation details are no longer displayed.
Brokers and agents no longer have to join the MLS to do business.
California’s AB 2992 is the state’s response—ensuring that clients get full transparency through agreements and disclosures rather than hidden MLS practices.
Be upfront about commissions early in the client conversation.
Provide clear disclosures in writing before moving forward.
Adjust to a system where the MLS no longer sets the baseline for compensation.
The elimination of “standard” commission expectations puts responsibility on brokers to initiate real, sometimes uncomfortable discussions about fees. But those conversations—when handled early—build trust. Sellers and landlords now have more options: they can choose whether to cover both sides’ commissions or limit compensation to their own broker. Buyers and tenants must also weigh the costs directly.
Transparency is key. Clients aren’t just chasing lower costs; they want clarity and results. A strong broker explains how commissions align with strategy, exposure, and negotiations in the market.
At The Ivy Group, we’ve always emphasized disclosures and client-first transparency. For us, adapting to AB 2992 and the new MLS environment isn’t a major shift—it’s simply codifying practices we already follow. When we propose representation, we lay out commission structures, options, and risks. We know that clarity today prevents disputes tomorrow.
Even with industry adjustments, one principle stands: clients who are informed, aligned, and well-served achieve better outcomes, whether selling, buying, or leasing.
The combination of AB 2992 and the changes to the MLS marks a turning point in California real estate. Written Buyer Broker Agreements, transparent commissions, and mandatory disclosures are all designed to give clients more visibility and choice. For brokers, staying current with the law isn’t just about compliance—it’s about building stronger, more trusting relationships in a competitive market.
Stay tuned by subscribing to the Ivy Group’s newsletter https://theivygroup.substack.com/
When you need to sell, buy, or lease a commercial property, or simply want to have an investment consultation, the Ivy Group is ready to help you reach your goals with more than 100 years of combined experience and expertise in real estate, investment, technology and engineering. Contact us with your next real estate needs:https://theivygroup.com/contact-us/
📌 Copyright © 2025 by Tim Vi Tran, SIOR, CCIM. All rights reserved.
Download
