Imagine you sell your California home for $786,400 and save $47,184 in commissions. Good news—you can! What’s more is, it’s all up to you!
But how? Firstly, you can now choose to only pay half the agent commission. Even better, you can opt for the best Flat Fee MLS California company and avoid burdensome real estate commissions!
What Is Real Estate Commission?
It is a percentage of your home’s sale price that you pay your agent. The average real estate commission rates can reach 6%, but they’re open to negotiation.
The listing agent and the buyer’s agent equally split these real estate agent fees in California between themselves. That is, you pay a 3% commission to each of them.
What’s the Average Real Estate Commission in CA?
A typical real estate commission in California varies based on several aspects, such as:
- Property type
- Market conditions
- Fair Market Value (FMV) of the home
- Agreement signed with the listing/buyer agent
Imagine you sell your California home for $786,400. Here’s how much you can save with a For Sale By Owner Listing Service like Houzeo:
| Service Provider | Fee | Commission Due | Savings |
| Listing + Buyer’s Agent Commission | 6% | $47,184 | $0 |
| Listing Agent Commission | 3% | $23,592 | $23,592 |
| Houzeo’s Flat Fee | $249 | $8,113* | $39,071 |
» Home Worth Calculator: Find your home’s true value now!
Regional Real Estate Commissions in California
Real estate agent commission in California can vary depending on your location. Real Estate commissions in Fresno, Clovis or Bakersfield or might have a low realtor commission rate. This is because of less competition among agents.
However, real estate commissions in Sacramento, Beverly Hills, or other affluent cities may be higher. The luxury properties there require high-end staging and marketing.
Who Pays the Realtor Fees in California?
After the NAR Settlement, now you pay the real estate commissions in California—irrespective of whether you’re buying or selling. Here’s how to compensate the Realtors in California according to the new real estate commission rules:
1. Listing Agent Fees: Who’s Paying?
If you are a home seller, you pay the listing agent commission. It is generally 3% of your home’s selling price and is included in the estimated closing costs for seller. Your listing agent and broker further divide this commission between them.
2. Buyer Agent Commission: Who Covers the Cost?
Sellers, buyers, or both—it depends on various factors! Real estate buyers agent commission can be paid in 3 ways:
- Sellers Cover the Buyer’s Agent Commission: You can choose to pay 6% real estate commission—3% to your listing agent and 3% to the buyer’s agent. But, you or your agent will have to personally contact the buyer’s agent to make this offer.
- Buyers Pay Their Own Agent: The buyer can choose to (or you can ask them to) compensate their agent. Buyers’ agents generally make their client sign an agreement. It clearly states the commission amount the buyer has to pay.
- Sellers and Buyers Negotiate a Deal: The buyer can make a higher bid and request you to offer a concession. In this case, money above the concessional rate will go to the buyer’s agent.
Do the New Rules Benefit Home Sellers?
Yes! Post the NAR settlement, the new real estate commission rules favor home sellers in 3 interesting ways:
1. Negotiable Buyer’s Agent Commission
You can now choose to offer the buyer’s agent commission. You can negotiate the percentage you’d like to offer. However, note that you can no longer advertise or offer it on the MLS.
That’s almost like choosing to shop at a local market in Santa Monica. You decide which stall you want to visit and which fresh produce you want to buy. And then, you engage in a one-to-one bargaining with the farmer to get the best deal!
2. Paperwork for More Transparency
Firstly, the commission is negotiated. Then, the amount is put on paper and the parties sign it. Buyers and sellers both sign agreements with their respective agents.
Isn’t it exactly how it happens in Hollywood? Nobody finalizes a deal without a contract. After all, everyone must know what they sign up for!
3. Equal Responsibility of Sellers and Buyers
Buyers will have to either directly compensate their agents or request sellers to do so. Either way, there will be more scope for sellers to cut their costs.
That’s somewhat like hosting a family dinner at In-N-Out. Sometimes, the you pay for it all and sometimes your cousin chips in. There are times you have to request the cousin to spilt the bill too!
NAR in a Nutshell!
Understand the NAR Settlement with our video.
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How to Save on the California Real Estate Commissions?
There are different ways to help you cut on the traditional Realtor commissions, like:
1. List for a Flat Rate
It is possible to list on the CA MLS without Realtor within 48 hours. You just need to find a good Flat Fee MLS listing service in California.
Think how you’d feel if you get a Disneyland FastPass. You’d have a smooth experience and get VIP treatment, won’t you? Similarly, if you choose to list for a flat fee, hefty commissions won’t play the spoilsport in your home-selling experience!
💵 List for Flat Fee: Calculate your savings now!
2. Sell “FSBO”
For Sale By Owner websites in California can help you avoid real estate commissions in California. They let you review contracts, schedule showings, and sell your home online. Some of these websites help with paperwork and negotiation too.
Imagine you decide to furnish a Victorian home in San Francisco yourself. After some homework, you’d realize that it’s not as difficult as you thought. Moreover, you’d save thousands on interior designer fees. That’s how going FSBO would work too!
➡️ Relevant Reading: How to sell a house by owner in California
3. Choose a Discount Real Estate Broker
You can get all traditional Realtors services at discounted rates (1% to 1.5%) with California’s discount real estate brokers. Most of them offer full-service Realtor benefits too.
Imagine you love an expensive designer outfit at a luxury boutique. What if you find a similar outfit at a fraction of the price at an outlet mall in Palm Springs? That’s how you’d feel when you skip traditional Realtors and list with a discount broker!
4. Sell to an iBuyer or Cash Buyer
You can get cash offers for homes which are generally as high as 80% of your home’s FMV. They can help you sell your home fast for cash in California.
Cash buyers work like shoppers purchasing overripe avocados at a farmer’s market. They’d buy what the farmer sells but not pay the right price for it.
What Should You Know Before Paying Realtor Commission?
From commission negotiation to knowledge of the services provided—you need to be an aware home seller. Here are some key tips to help you avoid the common commission-related mistakes:
- Negotiate the Commission: Don’t assume the 5-6% commission is final. You can ask for lower fees or explore discount brokers as well.
- Higher Commission Doesn’t Mean a Faster Sale: Higher commissions don’t make agents work harder. Your pricing strategy and marketing efforts in the current housing market in California matter more.
- Understand the Services Included: Some agents might offer fewer services for the same standard commission. Finalize your rate of commission after you clarify what their package includes (e.g., home staging, photography, marketing).
- Check Client Reviews: Don’t go for the agent charging the lowest commission as it might lead to a cheaper or slower sale. Always check for their experience and client reviews.
- Consider Offering the Buyer’s Agent Commission: If you don’t offer the buyer’s agent commission, it can limit your exposure to buyers. This is because some agents won’t show homes without compensation.
- Understand the Commission Split: If you offer a 6% commission, it is for the listing agent as well as the buyer’s agent. It rarely happens that one agent gets the whole 6%.
How To Avoid High Commissions with Houzeo?
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is the best FSBO websites in California.
Why Pay More When You Don’t Have To?
You can navigate real estate commissions in California like you choose wine in Napa. You can want to pay for the premium vineyard tours and expensive wine. But, you can also prefer to visit the local markets to find a great bottle without a hefty price tag!
With the new Realtor commission rules in place, it’s your time to learn how to negotiate real estate commissions. You can also opt for Flat Fee MLS Listing services like Houzeo and eliminate the 3% listing agent fee.
