California real estate commission: fees and who pays

One recent published figure is 5.08% of the sale price. Clever Real Estate's August 2026 survey of 434 agents nationwide, 50 of them in California, reported an average total commission of 5.08% in California: 2.57% for the listing agent and 2.51% for the buyer's agent. The same survey put the national average at 5.46%.

An average from a survey describes that survey's sample, not a fee schedule for your sale. Fifty agents is a small sample, other surveys report different figures, and the number combines two separately negotiated fees. It is not a legal rate, a recommended rate, or my fee. Before using any published number, check its date, location, sample size, and what it includes.

For a decision you can act on, request written proposals for the same property and services. Compare the listing brokerage's fee, any proposed buyer-broker contribution, and other selling costs separately. A lower percentage alone does not tell you which proposal fits your needs.

Realtor fees are the brokerage compensation set in your written agreements; there is no statewide fee schedule. For a seller, the total usually has two parts that should be compared separately: the listing brokerage's fee under the listing agreement, and any amount you agree to contribute toward the buyer's broker in the purchase negotiation.

Convert each part into dollars at your expected sale price. At a hypothetical $800,000 price, each percentage point is $8,000. Then add escrow, title, transfer taxes, repairs or credits, and loan payoff to see what you would keep. A fee quoted as a percentage tells you little until it is expressed as dollars alongside the services it buys.

The seller pays the listing brokerage under the listing agreement. The buyer's broker is paid under the buyer-broker agreement; that amount may be covered in whole or part by a seller contribution if one is negotiated, or paid by the buyer. Each obligation follows the written agreement, not custom.

Brokerage compensation is commonly paid through escrow at closing, as instructed in the agreements and escrow documents. Ask when payment is due if a sale does not close, and ask your lender whether any buyer-paid amount affects your loan or cash to close.

California has no legally mandated commission percentage. Each brokerage can propose its own fees, and clients can discuss the terms before agreeing to them. An advertised average does not determine what you owe.

State law puts this in the contract itself. Business and Professions Code section 10147.5 requires a printed listing agreement for a home of one to four units to state, in bold type immediately before the compensation terms: "The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker." Buyer agreements carry a matching notice, and the statute bars a preprinted rate in the form.

What a brokerage charges reflects the services it provides, the property, the market, and the agreement reached with the client. Because rates are negotiable, they are worth discussing directly and in writing before you sign a listing or representation agreement.

Following a national settlement involving the National Association of REALTORS®, practice changes took effect in August 2024 that affect how compensation is handled. Two are especially relevant to California consumers.

Under the NAR practice changes, offers of buyer-broker compensation are no longer communicated through the MLS. MLS participants working with a buyer generally need a written agreement before touring a home together, including a live virtual tour. Attending an open house independently does not itself trigger that requirement.

Compensation itself was not eliminated or capped. Sellers may still agree to contribute toward a buyer's broker compensation, and that can be negotiated within the purchase agreement or through other permitted means. What changed is where and how those offers are communicated, and how clearly the buyer's own arrangement is documented.

California's AB 2992 took effect January 1, 2025. The DRE explains that a buyer and buyer's agent must enter into a buyer-broker representation agreement as soon as practicable and no later than execution of the buyer's purchase offer. This state requirement is separate from the earlier touring requirement under applicable MLS rules.

The agreement addresses compensation, services, when payment is due, and expiration. Ask your broker to explain the duration, renewal requirements, and any exception that applies to your circumstances before you sign.

For a percentage fee, multiply the sale price by the agreed percentage divided by 100. At a hypothetical $800,000 sale price, each percentage point equals $8,000. This is arithmetic to compare proposals, not a suggested commission rate or an estimate of the statewide average.

Calculate each separately agreed fee only once. Then subtract loan payoff and the other transaction costs to estimate proceeds. For a flat fee, use the actual written amount and check which services or expenses are additional.

Ask each brokerage for an itemized proposal using the same expected sale price and scope of services. Record the listing fee, any separately negotiated buyer-broker contribution, additional marketing expenses, and other closing costs. Compare the dollars and services together before deciding.

For a hypothetical $800,000 sale, a 2% listing fee is $16,000 and a 2.5% listing fee is $20,000: a $4,000 difference. If the first proposal also includes a separate $5,000 marketing expense, those two items total $21,000 versus $20,000 for the second proposal with no separate marketing expense. These invented terms illustrate why comparing percentages alone can miss costs; they are not our fees, market averages, or complete net proceeds.

The listing agreement sets the total compensation to the listing brokerage, the length of the listing period, and what happens if the property does not sell. Read it as a contract rather than a formality, and ask for anything unclear to be explained in writing.

It is also reasonable to ask how the fee relates to the marketing and services actually delivered, and how the brokerage would handle a buyer who is unrepresented.

California’s AB 2992 requirements took effect January 1, 2025. A buyer-broker agreement is required as soon as practicable and no later than the buyer’s offer. DRE’s implementing regulation creates a rebuttable presumption that obtaining it before an in-person or virtual showing is practicable. Review the agreement with your broker before arranging a tour.

Because buyers now sign a written representation agreement up front, it is important to read what it says about compensation, duration, and scope. The agreement will state what the buyer's agent is to be paid and how that amount is satisfied.

In practice, a seller contribution may cover some or all of that amount, but that is negotiated on the specific transaction and is not guaranteed. Understanding the arrangement before you tour homes avoids a difficult conversation at the offer stage.

Read your buyer-broker agreement alongside the purchase offer. A seller contribution does not automatically erase the buyer's agreed obligation. Ask your broker how each payment is credited and ask your lender which charges or credits your loan permits.

For an arithmetic example, suppose the written buyer-broker fee is $16,000 and the seller agrees to pay $10,000 toward that same fee. The difference is $6,000. Whether the buyer owes that difference depends on the agreements and any documented adjustment. These are hypothetical dollar amounts, not quoted fees or a promise of seller payment.

California DRE's Real Estate Advertising Guidelines explain that a licensee may rebate compensation to a party in the transaction. This statewide guidance applies to Los Angeles as well as Orange County and the Inland Empire. A rebate is a negotiated reduction in compensation; it is not a benefit every broker offers.

For a financed purchase, the lender must be told about the rebate or gift, and its rules may restrict or prohibit it. Agree on the amount and treatment with the broker, lender, and escrow holder before counting it toward cash to close. A broker rebate and a seller closing-cost credit come from different parties; do not add both for the same dollar amount.

Before you sign a listing or buyer agreement, look up the agent and the brokerage on the California Department of Real Estate's public license lookup. Search by name or license number and confirm the license is active, the license type, the responsible broker, and whether any disciplinary action is listed. Every California licensee must show a DRE license number on advertising; mine is in the footer of this page.

If you believe a licensee acted improperly, the DRE's Enforcement Section investigates written complaints from the public. You can file through the DRE's online complaint system or with form RE 519 sent to a district office. The DRE notes that it is not a court: it cannot order refunds, cancel contracts, or award damages, so speak with an attorney about a money dispute.

Commission works the same way in Torrance, Redondo Beach, Long Beach, and the rest of Los Angeles County: it is negotiated in writing, and no local rate is set by law. What differs by city is the rest of the net sheet. Redondo Beach adds a city transfer tax to the county's $1.10 per $1,000, San Pedro sales fall under City of Los Angeles rates, and several South Bay cities require the seller to order a city report before the sale.

Our South Bay commission guide walks through comparing written proposals for a local sale, and the transfer tax and pre-sale report guides cover the city-specific lines a statewide article cannot.

Broker compensation is one part of a California sale. Sellers also encounter escrow and title charges, county and in some cases city transfer taxes, required reports, repairs negotiated during escrow, payoff of existing liens, and prorated property taxes.

A net sheet prepared for your specific property and price gives a far more useful picture than a commission percentage alone.