Real estate commissions in California: What to expect

Traditionally, when a homeowner hired a real estate agent to handle the sale of their property, they agreed to pay that agent, as well as their eventual buyer’s agent, a commission. This fee typically amounted to between 5 and 6 percent of the home’s selling price, split more or less evenly between each agent.

Due to a recent lawsuit settlement, sellers may no longer be on the hook for buyer’s agent fees. But if you use a real estate agent, he or she will have to be paid somehow. How does that look for California home sellers? Let’s take a look at Realtor fees in the Golden State.

How much are real estate commissions in California?

In California, the current total real estate commission averages 5.11 percent, according to the latest data from Clever Real Estate. This clocks in lower than the national average of 5.49 percent.

That might be because the California housing market is so expensive: The median price of an existing single-family home in the state was about $908,000, in May 2024, per the California Association of Realtors (CAR). For a home sale of this amount, 5.11 percent equates to $46,400 total, or $23,200 per agent.

Chalk it up to the high cost of living in the Golden State. Here’s what the Realtor fees would be in a few major cities across the state, assuming a home’s median sale price per May CAR data and an even split of a 5.11 percent commission:

What’s included in a real estate agent’s commission?

Whether they’re representing the buyer or the seller, most agents do a lot to earn their fee.

“For the seller’s agent, the commission generally includes services like listing and marketing the property, hosting open houses, negotiating with buyers and assisting the seller through the closing process,” says Scott Beloian, broker/owner of Westcoe Realtors in Riverside, California. Listing agents also often prepare a comparative market analysis to determine a competitive price and help the seller review and compare offers.

“For the buyer’s agent,” Beloian says, “the commission covers tasks such as finding suitable properties, setting up property viewings, advising on the [bidding] strategy and guiding the buyer through negotiations and closing.”

Who pays agent commissions in California?

Across the country, including in California, it used to be that commissions for both agents in the transaction were paid by the seller. “This arrangement [meant] that, while buyers [did] not directly pay the commission, the cost [was] typically factored into the home’s final sale price, affecting both parties indirectly,” says Beloian.

Again, however, changes to the way Realtor fees are paid are coming this summer. Under the new rules, sellers may — or may not, depending on the details of their deal — be responsible for paying their own agent directly.

Are California real estate agents worth it?

Although no one is required to use a real estate agent to either buy or sell a home, there can be considerable advantages to doing so. Agents are licensed professionals who are experts in their local markets. Their job is literally to help you meet your real estate goal, whether that’s earning top dollar on your sale or finding you the right new home at the right price.

Selling a home without a listing agent — known as a for sale by owner transaction, or FSBO for short — means you take on all the responsibilities typically managed by an agent yourself. With California’s high home prices, a mistake in negotiations or missed detail on the contract can really cost you.

That said, $23,200 apiece in commissions is a lot to tack onto an already pricey transaction. And there can be disadvantages to using an agent, aside from that cost, as well. For example, if the two of you don’t mesh well in your schedule or communication styles, working together can be a rough road. And most agents juggle multiple clients at once, which means you might not always be their top priority.  But generally speaking, the pros of having an agent on your side should outweigh the cons.

Saving on commission fees

There are ways to save money on fees if the commission is a hurdle you just can’t get past:

• Negotiate the rate: Real estate commissions are often negotiable, and many agents might be willing to lower their rate if you ask. On a high-priced home, even a small rate reduction can make a big difference.
• Choose a discount agent: Think about hiring a low-commission real estate agent — companies like Redfin and Clever often charge closer to 1 or 1.5 percent of your home’s sale price, rather than the traditional 2.5 or 3 percent. You might also explore agents who operate on a flat-fee basis, earning a predetermined amount rather than a percentage of the sale price.
• Sell by owner: When you sell without a listing agent, you don’t have to pay a listing agent’s commission. But you do have to do all the work yourself, and you still might have to pay your buyer’s agent.
• Sell to a cash homebuyer: There are many companies in California that buy houses for cash, closing quickly with no hassle and no Realtors or fees. However, this method will yield a lower sale price compared to a traditional market sale.

Find a trusted California real estate agent

If you’re ready to sell and eager to maximize your profits in the pricey California market, your next step is to find a local real estate agent to team up with. Do your homework first: Start by asking for referrals from family and friends. Look for agents with a thorough knowledge of your specific area and expertise in selling properties similar to yours.

Interview multiple agents and ask targeted questions to help you make an informed choice. The better you click with someone, the smoother your journey is likely to be.