Legal Question in Real Estate Law in California

It depends upon why the buyer is asking for mediation/arbitration, but generally 4 years if it is for breach of contract and either 2 or 3 years for fraud.

Your question involves the so-called "statutes of limitations" and it's a pretty tricky area of the law, with loopholes and exceptions and interpretations that make application to a particular proposed lawsuit rather difficult, even for experienced lawyers. However, here are a couple basics:

Suits over problems in the sale of a house can involve issues of fraud, for which the limitations period is three years from the date the fraud is discovered, or with reasonable diligence should have been discovered. This type of suit would arise, for example, when the sellers failed to disclose a known problem affecting value of the property.

Home-sale problems may also involve issues of breach of contract; the statute of limitations here is four years, measured from the date of the breach, not the date of the contract (assuming the contract is in writing). Also, the limit for breach of a fiduciary duty by a broker is four years.

Here, your question is about mediation or arbitration, not lawsuits, but I believe a formal demand for arbitration would carry the same time limit as the filing of a lawsuit (the statute of limitations on a lawsuit relates to the date it is filed, not the date it is served). Mediation is not governed directly by statutes of limitations, but anyone contemplating doing arbitration or a lawsuit if a mediation fails must allow plenty of time for the mediation to take place and still beat the statutory deadline if the mediation fails. A party ot a mediation has little incentive to settle if he knows he can't be sued.

In a few instances, there might be even longer limitations periods, e.g., I believe there is a ten year period for certain latent defects in design and construction.