Real estate commissions are an important factor to consider when budgeting for buying or selling real estate. California HomeIn 2024, New Rules These fees were introduced to provide greater transparency around these fees, giving buyers and sellers a clearer understanding of their costs and increasing their negotiating power. These updates are designed to make the home buying and selling process easier for all parties.
Whether you are navigating the market, first time or if you’re an experienced seller, this guide will teach you the key points regarding real estate commissions in your state.
Current state of California’s housing market
Before we talk about real estate commissions in California, it’s helpful to understand the current situation. Housing market.
| Median home sales price | $818,100 |
| Housing Supply | 98,013 (21.7% increase from the previous year) |
| Homes sold above list price | 42.2% (-6.3 points compared to the previous year) |
Understanding California Real Estate Commissions
What are real estate commissions?
Real Estate Commission These are commissions paid by home buyers or sellers to real estate agents upon successful sale of a property. These commissions are usually calculated as a percentage of the final sale price and are calculated as follows: end As compensation for your role as agent throughout the transaction.
Who pays the fees?
Historically, sellers paid listing fees and Agent Fees Buyer’s agent fees. However, due to new rules that came into effect on August 17, 2024, Need Buyers should agree the agent’s commission in writing before commencing property viewings.
While buyers can still ask sellers to cover the buyer’s agent’s fees, the new rules make the amount flexible and fully negotiable. Sellers are no longer automatically required to cover the buyer’s agent’s costs.
Average Real Estate Commission in California
Commission rates in California vary widely depending on the details of the transaction, market conditions, and the agreements between the buyer, seller, and their agent. While there are common expectations, these fees are negotiable so both sides can find terms that fit their needs.
Several factors can affect the final commission, including the location of the property, current market conditions, and the range of services the agent provides. This gives buyers and sellers the freedom to adjust their commission based on their unique circumstances. Below are some examples of standard commission rates: Major cities in CaliforniaBased on the median home price,
| city | Median home sales price | Real estate commission 1.5% | Real estate commission 3% | Real estate commission 5% |
| 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 are committed to providing great value. Sellers: Listing fees start from 1%* Meanwhile, our competitive buyer fees vary by location and are designed to make your offer stand out and increase your chances of success in the California market.
Can you negotiate real estate commissions in California?
Yes you can. There are no fixed commission rates in the US and agents have the flexibility to negotiate their commission. The details of the transaction, the services required and your relationship with the agent all play a role in determining your commission rate in California.
When negotiating, it is important to evaluate the services an agent offers, such as their marketing strategies and local market expertise. These factors can affect how much an agent charges. Additionally, Dual Agency In situations where one agent represents both the buyer and seller, there is more room for negotiation.
Tips for successful negotiations
- Interview multiple agents and compare rates and services.
- We offer a performance-based fee structure that rewards agents who sell faster or achieve a higher sales price.
- If your property is in a popular area, highlight its appeal and encourage the agent to consider lowering their commission.
California Real Estate Commission Frequently Asked Questions
What are the changes to real estate commissions? Two big changes have been made: buyers must agree to their agent’s commission before they begin touring homes, and in many areas, the amount of the buyer’s agent commission is no longer listed on the MLS. Changes to real estate commissions here.
How does this change affect California buyers? Buyers currently must sign a contract detailing the agent’s commission before they can even view homes. However, it’s possible to negotiate with the seller to cover the agent’s commission during the offer process.
How does this change affect California merchants? Sellers can work with their listing agent to determine how much or whether they will pay in buyer’s agent fees, and sellers should be prepared to negotiate these costs with prospective buyers.
How do I find a real estate agent in California? If you’re ready to buy or sell a home in California, Redfin Agent You can be sure to receive expert guidance at every step of the process.
How can I avoid fees? One way to avoid real estate commission is to sell your home through a real estate agent. For Sale By Owner (FSBO) method. However, this approach requires you to handle every aspect of the sale, from marketing to paperwork, which can be time-consuming and difficult without professional help.
*Listing fees are subject to change and minimums apply. Does not include buyer’s agent fee if seller chooses to cover it. If buyer does not hire an agent, the listing fee will increase by 1% of the sale price. You can only sell with a 1% listing fee if you purchase on Redfin within 365 days of closing on your home you listed on Redfin. We charge a 1.5% listing fee and will pay you the difference of 0.5% by check after you purchase your next home with us. Learn more here.
