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 California 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:
- Negotiable Buyer’s Agent Commission: You can now choose to offer the buyer’s agent commission. However, note that you can no longer offer it via the MLS.
- 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.
- 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.
NAR in a Nutshell!
Understand the NAR Settlement with our video.
Like, share and subscribe!
How to Save on the California Real Estate Commissions?
There are different ways to help you cut on the traditional Realtor commissions, like:
- 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.
- Sell “FSBO”: CA For Sale By Owner websites let you review contracts, schedule showings, and sell your home online. Some of these websites help with paperwork and negotiation too.
- List for a Flat Rate: You can list on the CA MLS without Realtor within 48 hours if you find a good Flat Fee MLS listing service in California.
- 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.
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?
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.
With Houzeo, your home can be on the MLS within 2 days. You will also get 24/7 customer support. Your listing will also receive maximum exposure via top real estate websites like Zillow, Trulia, Redfin, and more.
