What’s a fair realtor fee in California? | How much does commission cost? | Who pays realtor fees? | Tips to save on California realtor fees | FAQs
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Realtor fees in California cost an average of 4.91%, which equates to a total commission fee of $37,348 for a typical home in the state. This includes the fees for both the seller’s agent and buyer’s agent, with each realtor earning around half the total commission amount.
Below, we cover what you need to know about realtor fees in California, including what affects realtor fees and who typically pays them. With this information, you’ll know what to expect when selling your home so you can budget accordingly.
But if you’re like many California home sellers, you might think 4.91% is too much to pay a realtor. Luckily, there are lots of ways to save on realtor fees in California.
The best option for most people is to find a realtor through a free service like Clever Real Estate. Clever negotiates 1.5% listing fees with top local agents at trusted brands like Keller Williams and RE/MAX. You’ll get guaranteed full service, but pay a fraction of what California agents typically charge.
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What is a fair realtor commission in California?
A fair realtor commission in California is whatever rate a typical seller with a home like yours would expect to pay in your local market. But what’s most important is that you and your agent agree on a rate you’re both comfortable with.
Most California realtors expect a total commission rate of around the statewide average of 4.91%. But you may be able to persuade your agent that a lower fee is fair if:
- Your home value is higher than the area average
- You’re in a hot market where bidding wars are common
- Your home is in great condition
- There is high demand for properties like yours
- You’re buying a house with the same agent
If you’re looking to save on realtor fees, it’s also possible to find California real estate agents with low commission rates. The top discount brands offer reduced listing fees (as low as 1.5% in California!), but still provide all the expertise and hands-on service you’d expect from an experienced local agent.
How much do realtor fees in California cost?
| Average realtor fee | |
|---|---|
| Listing fee | 2.50% |
| Buyer's agent fee | 2.41% |
| Total California realtor fees | 4.91% |
The average California realtor commission rate is 4.91%, with 2.50% going to the listing agent and the remaining 2.41% going to the buyer’s agent.
California realtor fees usually don’t vary too much from agent to agent — the majority of agents charge rates close to the area average. Our data found that most California sellers end up paying between 4.09%–5.73% in total real estate commission fees.
The table below shows an example of how realtor commission costs would affect a seller’s net profit on an average home in California:
| Category | Amount |
|---|---|
| Sale price | $760,644 |
| Realtor fees | $37,348 |
| Seller closing costs | $6,422 |
| Mortgage payoff | $62,840 |
| Seller net | $668,519 |
The seller typically pays the realtor fees in California. The fees come out of the proceeds of the sale, just like some other closing costs. As long as the sale price covers the realtor fees, the mortgage balance, and other closing costs, the seller doesn’t need to pay out of pocket. The seller also doesn’t owe the agents until the house is sold.
What factors affect realtor fees in California?
Average realtor fees in California are affected by conditions in the local housing market. Key factors include home price trends, the number of active real estate listings, and how quickly houses are selling.
Home price trends
| Median home value | Annual increase | |
|---|---|---|
| California | $769,405 | 8.74% |
| United States | $357,810 | 14.86% |
Source: Zillow. Last updated: December 2022.
Home price trends in the California real estate market have an important impact on realtor fees. Higher home prices often lead to lower realtor fees, and lower home prices often lead to higher fees.
Realtors usually want high value listings and will often lower their rates to get them. Even a relatively low rate on a high value home represents a bigger payday for a realtor than a high rate on a low value home. For example, 2% commission on a $750,000 home is $15,000, compared to 3% commission on a $200,000 home, which is just $6,000.
Whether your house price is above or below the market average can indicate what rate realtors may be willing to offer. Currently, the median home value in California is $760,644. If your home is worth more than that, you may find agents willing to offer you a deal.
How many homes are for sale
| Annual trend | |
|---|---|
| California | up 45.2% |
| United States | up 26.9% |
Source: Realtor.com. Last updated: September 2022.
Housing inventory — i.e., the number of homes for sale — has a significant impact on realtor fees. More listings typically lead to higher realtor fees, and fewer listings typically lead to lower fees.
When inventory is high, the market is cool and sellers have a tougher time finding buyers. In a cool market, realtors aren’t as likely to lower their fees: they have to work harder to sell homes, and they aren’t competing as much with other realtors for listings.
On the other hand, when inventory is high, the market is hot and listings sell quickly. In a hot market, realtors are more likely to lower their fees because they can sell homes easier and they are competing with other realtors for fewer listings.
How quickly homes are selling
| Average days on market* | |
|---|---|
| California | 36 days |
| United States | 43 days |
*12-month rolling average. Source: Realtor.com. Last updated: September 2022.
How long houses take to sell is another factor affecting realtor fees in California. When houses sell quickly, realtors make a faster and easier paycheck, so they are more likely to lower their fees.
When the market is slow and homes take longer to sell, a realtor’s job is harder. In this environment, realtors defend their bottom lines and are less likely to lower their commission rates.
You can find out your local market conditions by talking to a real estate agent. Talking to an agent comes with no risks or obligations. You’ll get valuable information about when it’s a good time to sell and what you can expect to pay in realtor fees.
When evaluating local conditions, also consider how your house stands out from the current market. Even when the overall market is cooling, certain types of homes can be in high demand. For example, when demand for low- to mid-priced homes is dropping, high-value homes can still be popular. In this scenario, if you have a high-value home, you have some leverage to negotiate lower realtor fees.
Across California, homes sell in an average of 36 days, but selling times can vary between markets. For example, the average selling timeline in San Jose is 17 days, but homes in Ukiah average 52 days on the market.
How are realtor fees split in California?
Realtor fees in California are typically split down the middle between the two real estate agents involved in the transaction. On average, the seller’s agent earns 2.50% of the home price and the buyer’s agent earns 2.41%, for a total commission of 4.91%.
The split in realtor commission isn’t set in stone. As the seller, it’s your decision what commission you offer the listing agent and the buyer’s agent. While these rates are negotiable, you’ll still need to find an agent willing to work with your offer.
For example, you can technically offer a low buyer’s agent commission, but there’s a drawback: buyer’s agents won’t have an incentive to show your house to their clients.
When deciding how much real estate commission to offer, keep in mind that realtors often share half their commission with their brokerages. High-performing agents tend to keep a greater percentage of the commission compared to other agents.
The table below breaks down an example of a typical California realtor commission split.
| Category | Percentage |
|---|---|
| Seller's agent take home | 1.25% |
| Seller's agent's broker split | 1.25% (~50% of the seller's agent's commission ) |
| Buyer's agent take home | 1.21% |
| Buyer's agent's broker split | 1.21% (~50% of the buyer's agent's commission ) |
| Total commission | 4.91% |
Who pays realtor commission in California?
The seller almost always pays the realtor fees in California for both the listing agent and the buyer’s agent. However, the seller doesn’t pay upfront, out of pocket, or before the house sells. Instead, realtor fees come out of the sale proceeds at closing.
It may sound odd for the seller to pay the buyer’s agent commission, but this arrangement benefits both the seller and the buyer. As the seller, the amount you offer for a buyer’s agent commission incentivizes buyer’s agents to show your house to their clients. The buyer’s agent commission is essentially a marketing tool for you to generate more interest in your listing.
Plus, many buyers can’t afford to pay the buyer’s agent commission out of pocket. Having the seller pay that fee benefits buyers because it allows them to look for homes without worrying about realtor fees. This arrangement also benefits sellers because it means a bigger pool of potential buyers.
How to save on realtor fees in California
If you’re selling a house in California and want to save on realtor fees, you have a few different options. Most sellers get the lowest rates (and best experience) by working with a full service realtor who charges lower rates, but you could also try to negotiate a lower realtor fee on your own or sell your house by owner.
Find an agent who charges lower rates
Most California home sellers who want to save on realtor fees should work with a local real estate agent who offers full service for a lower rate.
Our top pick is Clever Real Estate, a free service that matches sellers like you with top local agents — and negotiates lower realtor fees on your behalf. (See our full low commission real estate agent rankings for more local options.)
Clever is the best choice for most people because it negotiates 1.5% listing fees with experienced agents from trusted brands like Keller Williams, RE/MAX, and Berkshire Hathaway. You’ll get 100% full service from your agent (guaranteed), but pay a fraction of the 2.50% listing fee that most California agents charge.
Negotiate a lower realtor fee on your own
As a California home seller, you can always try to negotiate realtor commission rates yourself — you don’t have to just accept whatever listing an agent quotes you.
If you want lower realtor fees, you can make your house more appealing. This gives you some negotiating leverage; the easier your house is to sell, the more willing realtors might be to lower their fees. You can talk to a realtor about which features or renovations buyers are looking for, and you can offer to undertake those renovations in exchange for a lower rate.
Offering a full buyer’s agent commission will also entice listing agents to lower their fee. The full buyer’s agent commission will attract more buyers, which will make your listing agent’s job easier.
When negotiating realtor fees, manage your expectations. Many realtors won’t budge on their fees, and those that do are unlikely to lower them by more than 0.25%–0.5%. Usually, your best bet for a lower rate is to work with a brokerage or agent that charges all clients the same low commission.
Sell without a realtor
Selling your home for sale by owner (FSBO) in California lets you avoid paying the listing agent’s fee, effectively halving the cost of commission compared to working with a traditional agent. Most FSBO sellers still end up paying a conventional buyer’s agent fee, around 2.41% on the average California home sale.
While the potential savings from avoiding listing fees look great, there are many risks you’ll encounter when you try to sell your house without a realtor.
FSBO sellers take on a lot more work than regular home sellers. You’ll have to attract buyers, negotiate offers, pay extra fees to list your home on the MLS, and navigate legal paperwork. You’ll also miss out on the local market expertise that top real estate agents provide, which is critical when trying to price your home strategically to get the highest sale price possible.
In fact, research shows that FSBO homes sell for 5.5% less on average than similar properties listed with an agent. So while you may save 3% by cutting out the listing agent’s fee, you could lose more than that if your home sells for less than its full market value.
» MORE: How to sell your house without a realtor in California
FAQs about realtor fees in California
Are realtor fees negotiable in California?
Yes, realtor fees are negotiable in California. But that doesn’t mean all realtors are open to lowering their rates, and those that are willing are unlikely to lower them by much. Usually, a better way to save on realtor fees is to find a brokerage that offers low rates to all clients.
What percentage do most realtors charge in California?
The average total real estate commission in California is 4.91%, split between the listing agent and the buyer’s agent. In California, the average listing fee is 2.5% and the average buyer’s agent commission is 2.41%. But there are ways to pay less. Check out the best low commission real estate brokers that can help you save thousands.
Who pays the realtor commission in California?
The seller pays the realtor commission in California. However, the commission comes out of the proceeds of the sale, so sellers don’t need to pay upfront, out of pocket, or before the house sells. Find out more about who pays the realtor commission.
How much are realtor fees for a home buyer in California?
Home buyers don’t pay realtor fees in California. Instead, the seller covers both the listing agent fee and the buyer’s agent fee as part of the sale proceeds. However, as a buyer you may be eligible for a home buyer rebate. If you get a rebate, you can put that money back in your pocket or toward closing costs after you buy your home.
How much do realtors make on a typical sale in California?
Listing agents in California make around 2.5% commission on a typical sale, while buyer’s agents make around 2.41%. However, agents share part of their commissions with their brokerages, with many brokerages taking around 50%. So on a 2.5% commission, an agent may receive only 1.25%. Given that the median home value in California is $799,311, the typical take-home pay for agents is approximately $10,000. Learn more about how realtor commission works.
How much do realtors earn in California per year?
The average annual salary for realtors in California is $76,440, but salaries vary greatly. About 25% of agents make less than $30,130, while another 25% earn more than $100,910. Learn more about how much real estate agents make.
Methodology
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