R
eal estate commissions are a crucial factor to consider when buying or selling a home in California. To increase transparency and give buyers and sellers a clearer understanding of costs, new rules were introduced in 2024. These updates aim to make the home buying and selling process more straightforward for all parties.

    Before diving into real estate commissions, it's essential to understand the current California housing market. As of now, the median home sale price is $818,100, with a housing supply of 98,013 units (+21.7% YoY). Homes sold above list price account for 42.2% (-6.3 pts YoY).

    Real estate commissions are payments made by buyers or sellers to agents upon successful property sales. These fees are typically calculated as a percentage of the final sale price and are paid at closing as compensation for the agent's role throughout the transaction.

    Historically, sellers covered both listing and buyer's agent fees. However, new rules require buyers to agree to their agent's fee in writing before starting property tours. Although buyers can still ask sellers to cover the buyer's agent fee, the amount is now negotiable.

    Commission rates in California vary depending on market conditions, agreements between parties, and services provided by agents. While there are common expectations, these fees are negotiable, allowing both parties to find terms that suit their needs. For example, in major cities like Los Angeles, San Diego, and San Jose, commission rates can range from 1.5% to 3% of the median home sale price.

    At Redfin, we offer competitive fees for sellers starting at 1%* and flexible fees for buyers designed to help their offers stand out in California's market.

    You can negotiate real estate commissions in California by assessing the services provided by agents, such as marketing strategies and local expertise. Dual agency situations can also provide more room for negotiation. Tips for a successful negotiation include interviewing multiple agents, suggesting performance-based fee structures, and highlighting your property's desirability.

    The recent changes to real estate commission rules require buyers to agree to their agent's fee before starting home tours and no longer list buyer agent commission amounts on the MLS in many areas. This impacts buyers by requiring them to sign an agreement outlining their agent's fee before touring homes, while sellers can still negotiate these costs with prospective buyers.

    To find a real estate agent in California, partnering with a Redfin agent will ensure you receive expert guidance throughout the process. One way to avoid fees is by selling your home through the For Sale By Owner (FSBO) method, but this approach requires handling every aspect of the sale, which can be time-consuming and challenging without professional support.

    *Listing fee subject to change, minimums apply. Any buyer's agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.