Imagine you sell your California home for $786,400 and save $39,071 in commissions. Sounds too good to be true? Well, it’s not! Thanks to the NAR Settlement, you can now choose to pay only half the agent commission.
This also means you have to pay real estate commissions whether you are a seller or a buyer. However, you can opt for the best Flat Fee MLS California company and avoid burdensome Realtor fees!
What Is Real Estate Commission?
It is a percentage of your home’s sale price that you pay as Realtor fees. 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 California?
You would pay $47,184 as 6% standard real estate commission for a house priced $786,400 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
» 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 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?
As per the new real estate commission laws, it now depends on how you negotiate. Here’s how Realtors in California are compensated now:
1. Listing Agent Fees: Who Pays?
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 closing costs for seller. Your listing agent and broker further divide this commission between them.
2. Buyer Agent Commission: Who Covers the Cost?
Who pays the broker fee when buying a house depends on various factors. Real estate buyer’s 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. However, you or your agent will have to personally contact the buyer’s agent to make this offer.
- Buyers Pay Their Own Agents: The buyer can choose to (or you can ask them to) compensate their agent. Buyers’ agents generally make their clients sign an agreement. It clearly states the commission amount the buyer has to pay.
- Sellers and Buyers Negotiate a Deal: In a buyer’s market, buyers can bid higher and request you to offer a concession. The amount above the concessional rate goes to the buyer’s agent.
Do the New Rules Benefit Home Sellers?
Yes! Post the NAR Settlement of August 2024, 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. Moreover, you can negotiate the amount you’d like to offer. That’s like shopping and bargaining at a local market in Santa Monica! But, simply note that you can no longer advertise or offer it on the MLS.
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. Remember, if it’s not on paper, it’s not happening—just like Hollywood contracts!
3. Equal Responsibility of Sellers and Buyers
Buyers will have to either directly compensate their agents or request you to do so. Either way, there will be more scope for you to cut your costs. It’s like having a date at In-N-Out—you either pay for it all or you go Dutch!
How to Save on California Real Estate Commissions?
There are different ways to help you cut on the traditional commission for Realtors, like:
1. List for a Flat Rate
It is possible to list on the CA MLS without a Realtor within 48 hours. That’s almost like having a Disneyland FastPass—you get a smooth selling experience with VIP treatment! Simply remember to find a good Flat Fee MLS listing service in California.
💵 Savings with Flat Fee: Calculate your home savings now. Don’t let hefty Realtor fees play the spoilsport in your home-selling experience!
2. Sell ‘FSBO‘
Going FSBO is like taking up a DIY project. For Sale By Owner websites in California can help you avoid real estate commissions in the Golden State. You can review contracts, schedule showings, and sell your home online. Some websites help with paperwork and negotiation too.
➡️ Go FSBO: How to sell a house by owner in California
3. Choose a Discount Real Estate Broker
You can get all traditional Realtor services at discounted rates (1% to 1.5%) with California’s discount real estate brokers. Most of them offer full-service Realtor benefits too. This is like finding a designer outfit at a fraction of the original price at a mall in Palm Springs.
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. That’s more like customers buying overripe avocados at half price. With cash home buyers, you can sell your home fast for cash in California.
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 common commission-related mistakes:
- Negotiate the Commission: Don’t assume the 5% to 6% commission is final. You can ask for lower fees or explore discount brokers as well.
- Higher Commission Doesn’t Mean a Faster Sale: An agent may not be able to find you the best deal simply because you’re giving them a hefty fee. You’ll also need to share your listing on social media platforms to get your home to stand out in the current California housing market.
- 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 a 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 Realtor Fees With Houzeo?
Houzeo helps you avoid paying high real estate commissions with its flat fee listing plans. Here’s how you can get started:
How Much Do You Pay With Houzeo?
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 |
➡️ Is It a Buyer’s or Seller’s Market in California? Check the latest housing market shifts in California and negotiate accordingly.
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is the best FSBO website 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 pay for the premium vineyard tours and expensive wine. But you can also visit the local markets to find a great bottle without a hefty price tag!
With the new Realtor commission rules in place, it’s important to know 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.
