Fact Pattern: A buyer and buyer’s agent agree to a 2% compensation using a C.A.R. Buyer Representation and Broker Compensation Agreement (BRBC). During the BRBC representation period, the buyer writes an offer using C.A.R.’s Residential Purchase Agreement (RPA). In the offer, the buyer asks the seller to pay 2.5% to the buyer’s broker. The seller counters the 2.5% coop comp down to 2%. The buyer accepts the seller’s counteroffer.

Multiple Choice Question: What is the seller required to pay the buyer’s broker? Pick the best answer:

A. 2% under the NAR Settlement Agreement.
B. 2% under California law.
C. 2% under the terms of the RPA.
D. Zero. 

Answer: Answer A is a correct statement, but it’s not the best answer. The NAR Settlement Agreement prohibits a buyer’s broker from getting paid more than what is agreed to in the written buyer-broker agreement. In this situation, the BRBC said 2%, so that’s the maximum that the buyer’s broker can receive, as according to the NAR Settlement Agreement. However, an agent’s entitlement to coop comp is not based solely on the NAR Settlement Agreement. Other laws and requirements may also apply to the situation (as further discussed below).

Answer B is also a correct statement, but it’s not the best answer. Starting on January 1, 2025, California now requires a written buyer-broker agreement that includes, among other things, the broker’s compensation (see California Civil Code section 1670.50).

In this situation, it’s true that the BRBC says 2%, which is precisely what the seller ultimately agreed to pay. It’s also true that agents must comply with both the NAR Settlement Agreement and California law. However, other requirements may also apply to this situation (as further discussed below).

Answer C is wrong, and Answer D is the correct answer. In December 2024, C.A.R. revised the RPA concerning coop comp. If a buyer checks the box in paragraph 3G(3) of the RPA to ask the seller to pay a coop comp, the buyer must also make a “Buyer Compensation Affirmation.” That affirmation means that the buyer is vouching for the fact that, at the time the offer is made, the buyer has a valid, written buyer-broker agreement that covers the subject property for compensation of no less than what the buyer is asking the seller to pay (see paragraph 3G(3) of the RPA). If that is untrue, “Seller has no obligation to pay Buyer’s Broker” (see paragraph 18A(2) of the RPA).

In this situation, the buyer-broker agreement says 2%, not 2.5%. The buyer and buyer’s agent could have modified their buyer-broker agreement to 2.5% before writing the offer. They didn’t do that. Hence, the “Buyer Compensation Affirmation” was untrue at the time the buyer’s offer was made. The BRBC at 2% was less than the 2.5% that the buyer asked the seller to pay, regardless of whether the seller ultimately agreed to 2% anyway. The seller has no obligation to pay the coop comp under paragraph 18A(2) of the RPA.

Copyright© 2025 Shared Success Center, LLC (serving HomeServices of America companies). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of March 17, 2025. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.