{"id":96643,"date":"2024-09-19T16:22:13","date_gmt":"2024-09-19T23:22:13","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=96643"},"modified":"2024-09-19T16:22:13","modified_gmt":"2024-09-19T23:22:13","slug":"california-real-estate-commissions","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/blog\/california-real-estate-commissions\/","title":{"rendered":"California Real Estate Commissions: What You Can Expect in 2024"},"content":{"rendered":"

Real estate commissions are a key factor to consider when budgeting for buying or selling a <\/span>home in California<\/span><\/a>. In 2024, <\/span>new rules<\/span><\/a> were introduced to increase transparency around these fees, giving buyers and sellers a clearer understanding of costs and enhancing their ability to negotiate. These updates were designed to make the home buying and selling process more straightforward for all parties.<\/span><\/p>\n

Whether you’re navigating the market for the <\/span>first time<\/span><\/a> or you’re an experienced seller, this guide will explain the critical points about real estate commissions in the state.<\/span><\/p>\n

\"Santa<\/p>\n

Current state of the California housing market<\/span><\/h2>\n

Before we get into California real estate commissions, it\u2019s useful to understand the current <\/span>housing market<\/span><\/a>.\u00a0<\/span><\/p>\n\n\n\n\n\n
Median Home Sale Price<\/b><\/td>\n$818,100<\/span><\/td>\n<\/tr>\n
Housing Supply<\/b><\/td>\n98,013 (+21.7% YoY)<\/span><\/td>\n<\/tr>\n
Homes Sold Above List Price<\/b><\/td>\n42.2% (-6.3 pts YoY)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Understanding real estate commissions in California<\/span><\/h2>\n

What are real estate commissions?<\/span><\/h3>\n

Real estate commissions<\/span><\/a> are payments made by the homebuyer or seller to agents upon the successful sale of a property. These fees are typically calculated as a percentage of the final sale price and are paid at <\/span>closing<\/span><\/a> as compensation for the agent’s role throughout the transaction.<\/span><\/p>\n

Who pays the commission?<\/span><\/h3>\n

Historically, the seller would cover both the listing <\/span>agent\u2019s fee<\/span><\/a> and the buyer\u2019s agent\u2019s fee. However, new rules effective August 17, 2024, now <\/span>require<\/span><\/a> buyers to agree to their agent\u2019s fee in writing before beginning property tours.<\/span><\/p>\n

Although buyers can still ask the seller to cover the buyer’s agent’s fee, the new rules make the amount flexible and entirely negotiable. Sellers are no longer automatically expected to shoulder the buyer’s agent\u2019s costs.<\/span><\/p>\n

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Average real estate commission rates in California<\/span><\/h2>\n

Commission rates in California can differ significantly depending on the details of the transaction, market conditions, and agreements between the buyer, seller, and their agents. While there are common expectations, these fees are negotiable, allowing both parties to find terms that suit their needs.<\/span><\/p>\n

Several factors\u2014such as the property\u2019s location, current market conditions, and the range of services provided by the agent\u2014can influence the final commission. This gives buyers and sellers the freedom to adjust fees based on their unique situations. Below is an example of standard commission rates for <\/span>major cities in California<\/span><\/a>, based on median home prices:<\/span><\/p>\n\n\n\n\n\n\n
City<\/b><\/td>\nMedian Home Sale Price<\/b><\/td>\n1.5% Real Estate Commission<\/b><\/td>\n3% Real Estate Commission<\/b><\/td>\n5% Real Estate Commission<\/b><\/td>\n<\/tr>\n
Los Angeles<\/span><\/a><\/td>\n$1,003,500<\/span><\/td>\n$15,052<\/span><\/td>\n$30,105<\/span><\/td>\n$50,175<\/span><\/td>\n<\/tr>\n
San Diego<\/span><\/a><\/td>\n$971,750<\/span><\/td>\n$14,576<\/span><\/td>\n$29,152<\/span><\/td>\n$48,588<\/span><\/td>\n<\/tr>\n
San Jose<\/span><\/a><\/td>\n$1,379,250<\/span><\/td>\n$20,689<\/span><\/td>\n$41,378<\/span><\/td>\n$68,962<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

At Redfin, we’re committed to offering excellent value. For sellers, we offer <\/span>listing fees starting as low as 1%<\/span><\/a>*, while our competitive fees for buyers, varying by location, are designed to help your offer stand out, increasing your chances of success in California\u2019s market.<\/span><\/p>\n

Can you negotiate real estate commissions in California?\u00a0<\/span><\/h2>\n

Yes, you can! In the U.S., there are no fixed commission rates, giving agents the flexibility to negotiate fees. The specifics of the transaction, the services you require, and your relationship with the agent can all play a role in determining commission rates in California.<\/span><\/p>\n

When negotiating, it\u2019s important to assess the services provided by the agent, such as marketing strategies and their expertise in the local market. These factors can influence how much the agent charges. Additionally, <\/span>dual agency<\/span><\/a> situations\u2014where one agent represents both the buyer and seller\u2014can provide more room for negotiation.<\/span><\/p>\n

Tips for a successful negotiation<\/span><\/h3>\n