Real estate commissions are an important factor to consider when budgeting to buy or sell a home in California. In 2024, new rules are introduced to increase transparency about these fees, to give buyers and sellers a clear understanding of costs and to improve their negotiation skills. These updates were designed to make the home buying and selling process more straightforward for all parties.
That you are navigating the market of first of all even if you are an experienced realtor, this guide will explain important points about real estate commissions in the state.
The current state of the California housing market
Before we get into the California housing commissions, it’s helpful to understand the current situation housing market.
| Median Home Sales Price | $818,100 |
| Provision of Housing | 98,013 (+21.7% YOY) |
| Homes Selling Above List Price | 42.2% (-6.3 pts YoY) |
Understanding real estate commissions in California
What are real estate commissions?
Housing commissions are payments made by the home buyer or seller to agents for the successful sale of the property. These fees are usually calculated as a percentage of the final price and are paid accordingly to close as compensation for the agent’s role in all transactions.
Who pays the commission?
Historically, the seller would have combined both listings agent fee and buyer’s agent fees. However, the new rules take effect on August 17, 2024, now need buyers to agree their agent’s fee in writing before starting a tour of the property.
While buyers can still ask the seller to pay a buyer’s agent fee, the new rules make the price flexible and fully negotiable. Sellers are no longer automatically expected to bear the costs of a buyer’s agent.
Real estate commission rates in California
Commission rates in California can vary greatly depending on the details of the transaction, market conditions, and agreements between the buyer, seller, and their agents. Although there are general expectations, these fees are negotiable, allowing both parties to find terms that suit their needs.
Several factors—such as geographic location, current market conditions, and the range of services an agent provides—can influence the final commission. This gives buyers and sellers the freedom to adjust payments based on their unique circumstances. Below is an example of typical commission rates for major cities in Californiabased on median home prices:
| The city | Median Home Sales Price | 1.5% Property 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 providing the best value. For sellers, we offer listing fees start as low as 1%*, while our competitive buyer fees, which vary by location, are designed to help your offer stand out, increasing your chances of success in the California market.
Can you negotiate real estate commissions in California?
Yes, you can! In the US, there are no fixed commission rates, giving agents the power to negotiate fees. The details of the transaction, the services you need, and your relationship with the agent can all play a role in determining commission rates in California.
When negotiating, it is important to evaluate the services provided by the agent, such as sales tactics and their competence in the local market. These factors can influence how much an agent charges. In addition, dual agency situations—where one agent represents both the buyer and the seller—can provide more room for negotiation.
Tips for a successful conversation
- Talk to several agents to compare fees and services.
- Suggest a performance-based fee structure that rewards agents for faster sales or higher sales prices.
- Highlight the desirability of your property if it is in a popular area to encourage agents to consider a lower commission.
California real estate commission FAQs
What are the changes to the real estate commission? Two major revisions have occurred: buyers must now agree to their agent’s fee before starting a home tour, and in many areas, buyer agent commission rates are no longer listed on the MLS. Read more about housing commission changes here.
How do the changes affect California consumers? Buyers now need to sign an agreement detailing their agent’s fee before starting to tour homes. However, they can still negotiate with sellers during the offering process to pay the agent’s fee.
How do the changes affect California retailers? Sellers can still work with their listing agent to determine how much to contribute to the buyer’s agent’s commission. Sellers should be prepared to negotiate these costs with potential buyers.
How to find a real estate agent in California? When you’re ready to buy or sell a home in California, partner with A Redfin agent will ensure that you receive expert guidance at every step of the process.
How can you avoid fees? Another way to avoid real estate commission fees is to sell your home through For Sale By Owner (FSBO) method. However, this approach requires you to handle all aspects of sales, from marketing to paperwork, which can be time-consuming and challenging without professional support.
*Listing fees are subject to change, minimum applicable. Any buyer’s agent fees the seller chooses to cover are not included. The listing fee is increased by 1% of the purchase price if the buyer is not represented. Sell for 1% of listings only if you shop with Redfin within 365 days of closing your Redfin listing. We’ll charge a 1.5% listing fee, and send you a check for the 0.5% difference after you buy your next home with us. Read more here.
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