Real estate commissions are a key factor to consider when budgeting for buying or selling a home in California. In 2024, new rules were introduced to increase transparency around these fees, giving buyers and sellers a clearer understanding of costs and enhancing their ability to negotiate. These updates were designed to make the home buying and selling process more straightforward for all parties.
Whether you’re navigating the market for the first time or you’re an experienced seller, this guide will explain the critical points about real estate commissions in the state.
Current state of the California housing market
Before we get into California real estate commissions, it’s useful to understand the current housing market.
| Median Home Sale Price | $818,100 |
| Housing Supply | 98,013 (+21.7% YoY) |
| Homes Sold Above List Price | 42.2% (-6.3 pts YoY) |
Understanding real estate commissions in California
What are real estate commissions?
Real estate commissions are payments made by the homebuyer or seller to agents upon the successful sale of a property. These fees are typically calculated as a percentage of the final sale price and are paid at closing as compensation for the agent’s role throughout the transaction.
Who pays the commission?
Historically, the seller would cover both the listing agent’s fee and the buyer’s agent’s fee. However, new rules effective August 17, 2024, now require buyers to agree to their agent’s fee in writing before beginning property tours.
Although buyers can still ask the seller to cover the buyer’s agent’s fee, the new rules make the amount flexible and entirely negotiable. Sellers are no longer automatically expected to shoulder the buyer’s agent’s costs.
Average real estate commission rates in California
Commission rates in California can differ significantly depending on the details of the transaction, market conditions, and agreements between the buyer, seller, and their agents. While there are common expectations, these fees are negotiable, allowing both parties to find terms that suit their needs.
Several factors—such as the property’s location, current market conditions, and the range of services provided by the agent—can influence the final commission. This gives buyers and sellers the freedom to adjust fees based on their unique situations. Below is an example of standard commission rates for major cities in California, based on median home prices:
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Los Angeles | $1,003,500 | $15,052 | $30,105 | $50,175 |
| San Diego | $971,750 | $14,576 | $29,152 | $48,588 |
| San Jose | $1,379,250 | $20,689 | $41,378 | $68,962 |
At Redfin, we’re committed to offering excellent value. For sellers, we offer listing fees starting as low as 1%*, while our competitive fees for buyers, varying by location, are designed to help your offer stand out, increasing your chances of success in California’s market.
Can you negotiate real estate commissions in California?
Yes, you can! In the U.S., there are no fixed commission rates, giving agents the flexibility to negotiate fees. The specifics of the transaction, the services you require, and your relationship with the agent can all play a role in determining commission rates in California.
When negotiating, it’s important to assess the services provided by the agent, such as marketing strategies and their expertise in the local market. These factors can influence how much the agent charges. Additionally, dual agency situations—where one agent represents both the buyer and seller—can provide more room for negotiation.
Tips for a successful negotiation
- Interview several agents to compare fees and services.
- Suggest a performance-based fee structure that rewards agents for a quicker sale or higher selling price.
- Highlight your property’s desirability if it’s in a popular area to encourage agents to consider a lower commission.
California real estate commission FAQs
What are the changes to real estate commission? Two major updates took place: buyers are now required to agree to their agent’s fee before starting home tours, and in many areas, buyer agent commission amounts are no longer listed on the MLS. Learn more about the real estate commission changes here.
How do the changes impact buyers in California? Buyers now need to sign an agreement that outlines their agent’s fee before beginning to tour homes. Even so, they can still negotiate with sellers during the offer process to cover the agent’s fee.
How do the changes impact sellers in California? Sellers can still work with their listing agent to decide if and how much they will contribute toward the buyer’s agent commission. Sellers should prepare to negotiate these costs with prospective buyers.
How do you find a real estate agent in California? When you’re ready to buy or sell a home in California, partnering with a Redfin agent will ensure you receive expert guidance at every step of the process.
How can you avoid fees? One way to bypass real estate commission fees is by selling your home through the For Sale By Owner (FSBO) method. However, this approach requires you to handle every aspect of the sale, from marketing to managing paperwork, which can be time-consuming and challenging without professional support.
*Listing fee subject to change, minimums apply. Any buyer’s agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.
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