Legal Question in Real Estate Law in California

That's substantially what the law provides in the absence of an agreement - look at Code of Civil Procedure section 1284.2 (which is a part of the Civil Arbitration Act, CCP 1280 et seq.).

Third try. If you want the buyer to use mediation then just say that in the contract. Do not beat around the bush causing ambiguous language. Who do you anticipate will breach the contract? If you plan on doing so then put down what you want for your protection; but if you plan on breaching do not make the sale.

You may want the buyer to use mediation, but you should understand the difference between mediation and arbitration. Arbitration is binding, in which a neutral third party makes an award. The law allows the party who wins arbitration to file a petition with the court, to enforce the award as a judgment. The arbitrator's decision cannot be reversed on appeal, even if the arbitrator did not follow the law.

Mediation is simply a conference with a neutral third party, who attempts to help the parties settle the matter. It is not binding. Most agreements that require mediation can only penalize a parties failure to mediate, first, by either causing a forfeiture of the right to recover costs, or in some cases (in the case of Common Interest Developments) by making the lawsuit subject to a demurrer until mediation is completed. But they cannot bar litigation. Only a properly worded arbitration clause can prevent arbitration, which you may or may not want.